Changes To Form W-2 Reporting For Employers In 2017

Tax forms and the deadlines for filing those tax forms sometimes undergo change. Employers who provide Form W-2 statements to employees may be subject to new requirements on how the Form W-2 is prepared and when it must be filed.

A Form W-2 must be provided to any employee who earned $600 or more during the tax year. Even if an employee earned less than $600, they must receive Form W-2 if you withheld any income tax, Social Security tax, or Medicare tax. The deadline for providing Form W-2 statements to employees remains unchanged, but the deadline for filing Form-W-2 copies with the Social Security Administration (SSA) has changed.

Filing deadline change

The due date for filing Form W-2 with the SSA is now January 31. There is no longer a difference between the filing deadline for e-filing versus that of mailing paper forms. An extension in the filing date can be requested, but the IRS grants extensions only for extraordinary circumstances. The due date of January 31 now coincides with the deadline for providing your employees with their copy of Form W-2.

Verification code testing

Another trend in payroll processing that is developing is the inclusion of a verification code on Form W-2. The IRS is testing the effectiveness of using a verification code to reduce fraud and identity theft due to falsified W-2 forms. In the 2016 filing season, the verification code was included only on W-2 forms completed by several large payroll providers.

For the 2017 filing season, the IRS is expanding the verification code program to include additional payroll processors. About 20 percent of all W-2 forms issued for the 2017 filing season are expected to include verification codes. A verification code may eventually be required on all W-2 forms issued, which would require a slight redesign of Form W-2.

Form W-2 layout

Form W-2 does not currently contain a specific space for a verification code. However, it includes an unlabeled entry box that the payroll providers are using for now to report the verification code. If the verification code becomes a permanent requirement, a redesign of Form W-2 is likely to include a specific box designated for the verification code.

Since the deadline for providing W-2 forms to employees remains January 31st, meeting the same deadline for filing with the SSA only requires additional work effort in January. If your business uses a payroll service provider that is in the testing program, advise your employees to enter the verification code when filing their tax returns. Contact an accountant for more advice on the Form W-2 changes.