What are the Penalties to Employers for Late W-2s?


 

W2 Penalty

Every year employers are responsible to  provide W-2 Forms for their Employees by mentioning their wages and tax withheld from the paycheck. This helps employees to file their tax returns.  Employers are supposed to distribute employees copies before February 1,2021 . Failure to do so, or to file your W-2s by the IRS deadline, could result in penalties.


Penalties for Failing to File on Time

The penalty rates are determined by the IRS based on the delay in time to file and the size of the business. 


  • If you fail to file W-2 on time, the IRS can assess a penalty of $50 per W-2 Form if you file the correct form within 30 days of the due date. The maximum penalty is $556,000 per year or $197,500 for small businesses. 


  • If you file after 30 days of the due date or before August 1, the fine increases to $110 per form, with a maximum fine of $1,696,000, or $565,000 if you operate a small business. 


  • Failure to file forms by August 1 results in a fine of $280 per W-2, or $1,130,500 a year for small businesses and $3,392,500 annually for others.






How to Avoid Penalties?

These are some simple ways to avoid penalties:


  • Do your tax filing on time

  • Send employee copies on time

  • Be aware of the right filing method

  • Choose the right Form

  • Fill the entries correctly

  • Always double check TIN

  • Crosscheck all the entries once you fill the form

  • Never miss filing any necessary information


If you find you're unable to prepare the forms by this date, you may request an extension for Form W-2 by writing to the IRS and explaining your reasons for being unable to supply W-2s to your employees by February 1,2021. The IRS is not obligated to grant your request for an extension.


Visit, https://www.taxbandits.com/w2-forms/form-w2-penalty/ to know more.

With TaxBandits, you can easily File your Tax Forms with the IRS. Get started with TaxBandits today and e-file your Tax before February 1, 2021.




Location: United States

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