Avoid These Common Errors on the W-2 Form

Mistakes on Form W-2 and W-3 can result in a no-match letter from Social Security or other notifications, as well as fines. Carefully review your W-2s before you present them to your employees, and look out for these common errors.

Incorrect Format

• Using the wrong kind of paper. You can purchase the official W-2/W-3 paper from an office supply store, select an acceptable substitute as listed in IRS Pub. 1141, or choose electronic filing. 
• Downloading the W-2 or W-3 form and printing directly from the IRS site. The W-2/W-3 form is displayed on the IRS site for information only.
• Using ink that is too light to be read by SSA scanners. Use black ink in 12-point Courier font. Other ink colors cannot be read by the machines.
• Handwriting your forms. The SSA scanners must be able to read the font.
• Using an outdated W-2 form. The form changes from year to year. For reporting 2011 wages, use the 2011 form and instructions.
• Using dollar signs ($) in the money fields.
• Omitting the decimal point and cents from numerical entries. The amounts must be expressed like this: 00000.00.

Incorrect or Missing Business Information

• Using incorrect or missing (EIN) Employer Identification numbers or digits (federal, state, or local). The federal EIN number is expressed in the following format: XX-XXXXXXX. Use the dash to separate the numbers, which indicates that this is an EIN.

Incorrect or Missing Employee Information

• Using titles, abbreviations, nicknames, or shortened forms of names in the Name Fields. Include the employee’s legal name exactly as it is listed in your records. For example, using “Nick” instead of “Nicholas” may cause the form to be flagged.
• Using the wrong name. Employees may forget to notify you when their name changes. An employee must contact Social Security to go through the official name-change process. Using the wrong name can result in a no-match letter from the SSA.
• Using an incorrect Social Security Number. Double-check the SSN against the W-4 that your employee completed when hired. Look for missing numbers or digits for all employees. The SSN should be expressed in the following format: XXX-XX-XXXX. Be sure to use the dashes, which indicates that this is a SSN.

Improperly Completing Required Fields

• Failing to complete the “Retirement Plan” block of Form W-2.
• Omitting or using incorrect figures for Medicare Wages & Tips.
• Having missing codes or labels in box 12 or 14 (if applicable).
• Using invalid IRS codes for box 12 (if applicable).

Missing Deadlines

• Mailing W-2s late. Postmark employee W-2s by January 31, 2012. This gives employees enough time to check for errors. 
• Forgetting about the W-3. Submit the W-3 Transmittal of Wages and copies of the W-2 to the SSA by Feb. 29, 2012. The deadline for electronically filing the W/2-W-3 with the SSA is April 2, 2012. 

For more information, consult these resources:

Internal Revenue Service
2011 IRS Instructions for Forms W-2 and W-3

Social Security Administration, Business Services Online 
Employer W-2 Filing Instructions & Information

Articles from Patriot Software, Inc.
What is a W-2? 

Reissuing a W-2 to an Employee

Correcting W-2s for Employees

What to Do if an Employee's W-2 Comes Back Undeliverable?

Download our Free W-2/W-3 Checklist

 

This content has been provided by Patriot Software, Inc., developer of online payroll software and other small business software solutions for American employers. For more information, visit www.PatriotSoftware.com.