Form W-2: Generating employee Wage and Tax Statements

Form W-2 is used to report wages, tips, and other compensation paid to employees as well as FICA and withheld income taxes. For the 2020 tax year, the deadline to distribute completed forms to employees is January 31, 2021

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What is Form W-2 for?

Form W-2, Wage and Tax Statement is used by employers to report wages, tips, and other compensation paid to employees as well as FICA and withheld income taxes. The IRS requires all employers to file a Form W-2 for each employee (even if the employee is related to the employer) from whom:

  • Income, Social Security, or Medicare tax was withheld
  • Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4, Employee's Withholding Allowance Certificate

Every employer who pays remuneration, including noncash payments of $600 or more for the year (all amounts if any income, social security, or Medicare tax was withheld) for services performed by an employee must file a Form W-2 for each employee. More information about Form W-2 is available from the IRS in About Form W-2, Wage and Tax Statement.

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Important dates

January 1, 2021 2020 W-2s available for self-serve customers to generate in Wave
January 7, 2021 Final day to request corrections to 2020 pay or benefits for entry to be completed before the filing deadline
January 18, 2021 2020 W-2s available in Wave Payroll accounts with tax service
January 31, 2021
Deadline to provide employees with their copy of Form W-2
February 2, 2021

Deadline for self-serve customers to file with the Social Security Administration (Wave files W-2s on behalf of those with tax service)

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Changes for the 2020 tax year

  • Employers are allowed to mask their employees' SSNs on all copies of Form W-2, except for Copy A. This will assist in identity theft protection, and will only allow the last four digits of the SSN to appear on the W-2. W-2s generated in Wave will have masked SSNs as outlined by the IRS: You will see employee SSNs as ***-**-XXXX
  • If you used the FFCRA's Sick or Family Medical Leave as well as the extended leave for your employee(s), you will see this reported in Box 14 with the gross wage totals from each. The employee Social Security deferral will be reported next year after the deferred amounts have been repaid, using a Form W-2c. 

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Steps to take for Form W-2

Tax Service  (Your tax service was set up during or before Q4, 2020)

Wave will:

  • Generate W-2s based on payrolls approved in Wave with a 2020 payday
  • Post W-2s for 2020 on the Tax Forms page by January 18, 2021
  • File W-2s with the Social Security Administration
  • File state copies as required in AZ, GA, IL, IN, MN, NC, VA and WI

Employers need to:

  • Distribute W-2s to their employees
    • If an employee has not been invited to view their paystubs, they will not have any access to their W-2 online through Wave
    • Once forms are posted, employees who have accepted invitations to view their pay stubs online will be able to access their W-2s in Wave
    • Employers can see all employee W-2s in Tax Forms

 

Self-serve  (Tax service not available in your state, or not set up before the end of Q4, 2020)

Employers need to:

  • Generate W-2s
  • Distribute W-2s to their employees
    • If an employee has not been invited to view their paystubs, they will not have any access to their W-2 online through Wave
    • Once forms are generated, employees who have accepted invitations to view their pay stubs online will be able to access their W-2s in Wave
    • Employers can see all employee W-2s in Tax Forms
  • File W-2s with the Social Security Administration and applicable state agencies

Additional details on these steps are provided in the next sections. 

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How to generate and download Form W-2

How to download  (Tax service customers, and previously generated self-serve forms)

Once W-2 forms are generated, they can be downloaded from PayrollTax Forms. 

How to generate (Self service customers only)

  1. Under Payroll > Click Tax Forms
  2. Next to Employees and contractors select the tax year for which you want to generate W-2s
  3. Locate Form W-2 and W-3 package > Under Actions > Click Generate next to W-2 and W-3
  4. On the Review your W-2 & W-3 forms page > complete the W-3 Fields section
  5. Review employee W-2 information in the Employees summary section. If the information in the summary is not correct, update is as outlined in how to correct Form W-2 before procceding
  6. When employee summary information is correct, click Generate W-2 and W-3
  7. W-2 and W-3 generation is complete, and you're brought to the 2020 W-2 and W-3 filing page
  8. Employees who have accepted invitations to view their paystubs in Wave will immediately be able to see their W-2 in the Tax Forms section of their Wave account. You will need to provide employee copies to any employees who haven't set up online access to their pay stubs
  9. Remember to file your W-2s! Learn more in how to file Form W-2

You must have an active or limited access payroll subscription to generate W-2 Forms in Wave. To reactivate, go to Settings > Billing.

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How to correct Form W-2

Tax Service  (Your tax service was set up during or before Q4, 2020)

Contact Support by clicking on the help icon at the bottom of the screen in your Wave account to request a correction.

If the only information that requires correction is the employee address, the IRS does not require a W-2C to be filed. Wave suggests employers follow this IRS guideline in cases where the employee copy address is also incorrect: "Reissue the Form W-2 with the incorrect address to the employee in an envelope showing the correct address or otherwise deliver it to the employee."

 

Self Serve  (Tax service not available in your state, or not set up before the end of Q4, 2020)

If W-2 forms have not been filed with the SSA

  • Updates to employee information (including name and Social Security Number) can be made by opening the W-2 and W-3 package in Tax Forms and discarding the previously generated forms. Correct the employee's information in the employee section, then re-generate your W-2s
  • If the only information that requires correction is the employee address, the IRS does not require a W-2C to be filed. Wave suggests employers follow this IRS guideline in cases where the employee copy address is also incorrect: "Reissue the Form W-2 with the incorrect address to the employee in an envelope showing the correct address or otherwise deliver it to the employee"
  • Contact support if you need to correct information about wages, benefits or taxes reported on Form W-2

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How to file Form W-2

Tax Service  (Your tax service was set up during or before Q4, 2020)

Wave files W-2 Forms with the Social Security Administration (SSA) and supported tax service states on your behalf. 

Self Serve  (Tax service not available in your state, or not set up before the end of Q4, 2020)

Employers are responsible for filing W-2 Forms (wage reports) with the Social Security Administration (SSA). Employers can upload the electronic transmission file produced in Wave Payroll directly to SSA Business Services Online. Wave provides a Social security business services online (SS BSO) registration guide if you need help registering for the first time.

Employers are also responsible for state filing if required. More information is available in Form W-2: State-by-state year end filing guide.

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