Penalties
The following penalties apply to the person or employer required to file Form W-2. The penalties apply to both paper filers and e-filers.
CAUTION: Employers are responsible for ensuring that Forms W-2 are furnished to employees and that
Forms W-2 and W-3 are filed with the SSA correctly and on time, even if the employer contracts with
a third party to perform these acts. The IRS strongly suggests that the employer's address, not the third party's address, be the address on record with the IRS. This will ensure that you remain informed of tax matters involving your business because the IRS will correspond to the employer's address of record if there are any issues with an account. If you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer, go to IRS.gov/ OutsourcingPayrollDuties for helpful information on this topic.
Failure to file correct information returns by the due date.
If you fail to file a correct Form W-2 by the due date and cannot show reasonable cause, you may be subject to a penalty as provided under section 6721. The penalty applies if you:
• Fail to file timely,
• Fail to include all information required to be shown on Form W-2,
• Include incorrect information on Form W-2,
• File on paper forms when you are required to e-file,
• Report an incorrect TIN,
• Fail to report a TIN, or
• Fail to file paper Forms W-2 that are machine readable. The amount of the penalty is based on when you file the correct Form W-2. Penalties are indexed for inflation. The penalty amounts shown below apply to filings due after December 31, 2023. The penalty is:
• $60 per Form W-2 if you correctly file within 30 days of the due date; the maximum penalty is $630,500 per year ($220,500 for small businesses, defined in Small businesses).
• $120 per Form W-2 if you correctly file more than 30 days after the due date but by August 1; the maximum penalty is $1,891,500 per year ($630,500 for small businesses).
• $310 per Form W-2 if you file after August 1, do not file corrections, or do not file required Forms W-2; the maximum penalty is $3,783,000 per year ($1,261,000 for small businesses).
CAUTION: If you do not file corrections and you do not meet any of the exceptions to the penalty, the penalty is $310 per information return. The maximum penalty is $3,783,000 per year ($1,261,000 for small
businesses).
For more information refer to the General Instructions