Remote Work Glossary
- Results for "undefined"
Table of Contents
What is Form W-2?
Who Needs a W-2?
When is the W-2 Deadline for 2025?
What are the Penalties for Missing the W-2 Deadline?
Do Employers Have to File W-2s Online?
What Does Each Box on Form W-2 Mean?
Upcoming Changes: Draft 2026 Form W-2
Key Takeaways
Stay Ahead of W-2 Compliance with Deel
What is Form W-2
Form W-2 (Wage and Tax Statement) is the federal tax form employers use to report wages and withholdings for their employees in the United States.
Employees need this form to file their personal income tax returns.
This guide provides accurate information on:
- The purpose of Form W-2 and who receives it
- Filing deadlines and penalties for the 2025 tax year
- The meaning of each box on a W-2
- Current electronic filing requirements
- Upcoming changes for the 2026 tax year based on the new "One Big Beautiful Bill Act" (OBBBA)
What is Form W-2?
Form W-2 is a federal tax document that reports:
- Employee wages, salaries, and tips
- Federal, state, and local income tax withheld
- Social Security and Medicare contributions
- Certain employee benefits (e.g., 401(k) contributions)
Employees use the information on their W-2 to complete their tax returns Employers are required to provide a W-2 to each of their employees. Independent contractors, however, do not receive a W-2; they receive a Form 1099-NEC
See also: 24 Business Tax Forms Every US Employer Should Know
Who Needs a W-2?
- W-2 Employees: To accurately file their tax returns
- Employers: To report wages and withholdings to the IRS and the Social Security Administration (SSA)
- Statutory employees: Certain contractors who are treated as employees for tax withholding purposes
Deel Payroll - US
When is the W-2 Deadline for 2025?
For the 2025 tax year, employers must furnish copies of Form W-2 to their employees and file Copy A with the SSA by February 2, 2026. This deadline is extended to the next business day because January 31, 2026, falls on a Saturday.
Employers must also file Form W-3, which summarizes all the W-2s they have issued.
What are the Penalties for Missing the W-2 Deadline?
If W-2s are filed late or incorrectly, the IRS may impose penalties. These penalties are adjusted for inflation and are applied per form. The penalty amounts for the 2026 filing season (for the 2025 tax year) are:
| Filing Status | Penalty per Form | Maximum Penalty (Large Businesses) |
|---|---|---|
| Within 30 days of deadline | $60 | $683,000 |
| After 30 days but by August 1 | $130 | $2,049,000 |
| After August 1 or not filed | $340 | $4,098,500 |
| Intentional Disregard of Filing | $680 | No maximum penalty |
Employers must also issue Form W-2c if any corrections are needed after the initial filing.
Do Employers Have to File W-2s Online?
Yes. Starting with the 2023 tax year, the IRS and the Treasury Department implemented new electronic filing requirements. Employers must now e-file if they are submitting 10 or more information returns in a calendar year. This aggregate number includes all types of forms, such as W-2s, 1099s, and others.
Employers with fewer than 10 forms in total can still file by mail, but electronic filing is strongly encouraged. E-filing is done through the SSA’s Business Services Online (BSO) portal.
What Does Each Box on Form W-2 Mean?
Here is a quick reference for the most common W-2 boxes:
| Box | What It Shows |
|---|---|
| 1 | Taxable wages, salaries, tips, and other compensation. |
| 2 | The total amount of federal income tax withheld from your paychecks. |
| 3 | Wages subject to Social Security tax. This amount is capped annually. |
| 4 | The total amount of Social Security tax withheld. |
| 5 | Wages subject to Medicare tax. There is no wage limit for Medicare. |
| 6 | The total amount of Medicare tax withheld. This includes the regular 1.45% and the 0.9% Additional Medicare Tax on wages over $200,000. |
| 7 | Tips you reported to your employer that are subject to Social Security tax. |
| 10 | Dependent care benefits. |
| 11 | Non-qualified deferred compensation. |
| 12 | Used for various special codes (e.g., 401(k) contributions under Code D). |
| 13 | Checkboxes to indicate if you are a statutory employee, participated in a retirement plan, or received sick pay. |
| 14 | Other information, such as union dues, state disability insurance taxes, or health insurance premiums. |
| 15–20 | State and local wages and taxes withheld. |
Upcoming Changes: Draft 2026 Form W-2
The IRS has released draft versions of the 2026 W-2 and W-2c forms to incorporate new provisions from the "One Big Beautiful Bill Act" (OBBBA), which became law in 2025. These drafts are informational only and should not be filed. The new law introduces tax exclusions for tips and overtime pay.
Key changes on the draft 2026 Form:
New Box 12 codes:
- TA – Employer contributions to a "Trump account" (a new type of savings account for children)
- TP – Total amount of qualified tips (eligible for the new tax exclusion)
- TT – Total amount of qualified overtime compensation (eligible for the new tax exclusion)
Box 14 is split into two parts:
- 14a – Other (for reporting items like union dues, health premiums, etc.)
- 14b – Treasury tipped occupation code (used to track qualified tips)
These provisions and reporting changes are effective for the 2025 tax year (which is filed in 2026). The IRS has stated it will provide further guidance to employers on how to report this information, as the standard 2025 W-2 form may not have dedicated boxes for these new exclusions.
Key Takeaways
- W-2s for the 2025 tax year must be filed by February 2, 2026\
- The e-filing threshold for information returns is now 10 or more forms in tota
- Late filing penalties can be substantial and increase with time
- New tax provisions under the OBBBA for tips and overtime pay will affect the 2025 tax returns you file in 2026. The IRS has provided draft 2026 forms with new reporting codes for this purpose
Stay Ahead of W-2 Compliance with Deel
Managing W-2 reporting, filing deadlines, and ever-changing IRS requirements doesn’t have to be stressful.
Deel Payroll - US helps you run payroll across all 50 states with built-in compliance, automated tax filings, and employee self-service access to their forms. For businesses looking for a full HR partner, Deel PEO combines payroll, benefits, and compliance under one platform—so you can focus on growing your team while we handle the complexity.
Make tax season simple, accurate, and stress-free. Explore Deel’s payroll solutions today.
Want to learn how it all works? Book a demo today to find out.
Disclaimer: This article is meant to be informative and help you better understand the W-2 form. It is not a replacement for proper tax advice. Request the help of an accountant or other tax professional.