Who Is Responsible For Incorrect W-2?

Mistakes on your W-2 form are not as uncommon as you might expect. In one moment, you’re trying to check your tax documents while getting ready to submit them. Then, something seems off. It can be quite frustrating. This is especially when you have a tax deadline you’re working against.

However, the good news is that there are certain steps you can take to get this issue corrected. First, understand the problems. Then, you need to figure out ways that you can fix them.

When you receive the wrong information on your W-2, delays in your filing process are not the only thing you may face. It can also lead to potential tax implications.

This article allows you to understand who is responsible for incorrect W-2. You'll then know what to do if you find out that you have an incorrect W-2.

What Is a W-2?

A W-2 form is a document that an employer is required to provide to their employees each year. It outlines how much money you earned and how much was taken out for taxes in a year. You usually need this form when it's time to file your federal and state tax returns. Your W-2 ensures that you are able to report your income accurately.

A W-2 shows key work info, such as your total wages, bonuses, and other earnings. It also includes all of your deductions. It can be your federal income tax, Social Security, and Medicare.

Who Is Responsible for Incorrect W-2 Form?

When it comes to asking who is responsible for incorrect W-2 form, it is entirely up to your employer. Employers must share your work information with you. They also need to provide it to the SSA, which is required by law. They'll need to submit an accurate summary of your earnings and tax withholdings for the year. They should do it before January 31.

Therefore, if you find out that you have an incorrect W-2, it is not up to you to fix it. It is totally up to your employer. Once you find this mistake, they're expected to correct it immediately. They'll need to issue a W-2c form. After this, they’ll send it to you and the SSA.

Common Errors That Could Make Your W-2 Incorrect

Some of the errors that could lead to an incorrect W-2 include:

Excess Contributions to a Health Savings Account (HSA)

This could happen if you or your employer adds excess money to your HSA than is required. This could cause an error on your W-2 form. These extra contributions are not supposed to be taxed. However, if your form exceeds the limit, your employer has two choices.

First, they can ask the bank to send back the extra funds. The other option is for them to correct your W-2 and send it as taxable income.

Wrong or Missing Name or Social Security Number

Your W-2 form can have simple mistakes. For example, you might misspell your name or use the wrong Social Security number. If you don't fix these errors, it could end up causing major problems with your tax processing. Employers are required to fix these errors by issuing a corrected W-2. If you’ve changed your name, like after getting married, let your employer know.

Incorrect Address or Employer Info

Mistakes in your address or employer's details don't always need a W-2 correction form. But you should try to correct them if they're likely to cause confusion. To fix this incorrect W-2 error for your address, your employer can simply reissue the W-2. They can also mail it to the correct location.

If the mistake is with your employer's name or address, you need a different process. They'll need to fix this using a separate form, which is the Form 8822-B.

Wrong Tax Year or Employer ID Number (EIN)

This mistake can lead to delays or penalties for you. To fix this, your employer should submit a corrected W-2 and W-3 form showing the wrong info. Then, they must file new corrected forms that show the correct details and the actual amounts. They'll need to send you copies of the corrected forms.

What Should You Do if You Receive an Incorrect W-2?

Don't ignore any error because even the smallest one can cause issues with your tax return. This further leads to penalties that you face. If you received an incorrect W-2, we have listed the steps to take in this situation:

• Double-check the Details: Start by carefully reviewing your W-2 form. Try to compare it with your final pay stub for the year. Errors that lead to erroneous W-2 forms can happen. They may be caused by last-minute tax changes or pre-tax benefits. This is normal, which is why you must review it thoroughly.

• Contact Your Employer Right Away: Now that you’ve checked, you can confirm there’s an error. Your next step is to reach out to your employer. To do this, it's best that you go through the HR or the payroll department. Let them know what the issue is and ask for a corrected W-2 form, which is the W-2c. Ideally, they should send this to you before the end of February.

• Don't File Until You Get the Corrected Form: Don't file your taxes until you receive the updated W-2c. When you file with incorrect information, it can end up delaying your return. It can also cause discrepancies or even lead to an audit.

• File for an Extension If Needed: If your corrected W-2 is delayed, you can file for an extension with Form 4868. This helps you avoid penalties if you file your taxes late while waiting for the corrected form.

• Keep Records of All Communication: Make sure you keep a record and document every step. Keep records of emails with your employer. Try to also save copies of the original forms and corrected ones, too. You can also include any follow-ups. This helps if you need to show the IRS what you did to resolve the issue.

• Contact the IRS if the issue isn't fixed: Reach out if your employer doesn't send the corrected form or if you're worried about misreporting. You can reach out to them directly or visit a Taxpayer Assistance Center. The IRS would then step in and request that your employer fix the issue within 10 days. 

Penalties for Incorrect W-2s

Making sure your W-2s are accurate is not just good practice; it is also required by law. The IRS takes errors on W-2 forms seriously, and erroneous W-2 can lead to financial penalties.

Penalties for incorrect filing:

• If you find and fix the mistake within 30 days of the original deadline, the fine is $60 for every W-2 form. The maximum is $664,500 per year and $232,500 for small businesses.

• If you fix the issue after 30 days but before August 1, the fine increases to $130 for each form. The maximum is $1,993,500 per year and $664,500 for small businesses.

• If you make the correction after August 1, or you don't make it at all, the penalty is $330 for each form. The maximum is $3,987,000 and $1,329,000 for smaller businesses.

If the IRS finds out your employer made a mistake on purpose or didn’t file completely, it’s a bigger issue. You could face a $630 fine per incorrect form. Employers who don't give employees their W-2s by January 31 could pay a fine of $310 per employee.

Final Thoughts

It is completely normal for errors to happen. When you plan well and take the right steps, you can avoid mistakes that lead to an incorrect W-2 form. One thing to do is to work with professionals. They offer support that simplifies the filing process and helps you avoid mistakes. You can also try to update employee details as soon as the changes occur. Try to stay organized and always keep your records updated throughout the year.

Avoid costly mistakes and ensure compliance with our W-2 form generator. When it comes to tax documents, accuracy is highly necessary. Our tool is here to help you get it right. Create your accurate W-2s with us today!