Form W-2 (2021) – Paper-Filing Checklist
Purpose and Reporting Requirements
The 2021 Form W-2 reports annual wages, federal/state/local tax withholding, Social Security and Medicare wages and taxes, tips, and employer-sponsored benefits for each employee.
Employers must report employer-sponsored health coverage costs in Box 12 using Code DD for informational purposes only.
This amount remains nontaxable to the employee and does not increase taxable income reported in Box 1. The 2021 tax year maintains the Additional Medicare Tax withholding threshold of $200,000 for single filers.
Employee Identification and Correction Procedures
You must verify employee identification data in boxes a, b, c, e, and f for accuracy before filing.
Confirm that the employee's Social Security number, employer EIN, employer name/address/ZIP, employee name with suffix, and address match your records exactly.
Errors in name or SSN require correction via Form W-2c filed with the Social Security Administration. Instruct employees to request a new Social Security card from SSA if the name or SSN on their card differs from the W-2 reporting.
Wages, Tips, and Compensation Reporting
Enter total wages, tips, and other compensation for 2021 in Box 1. Include all taxable income except properly excluded amounts such as nontaxable combat pay reported under Box 12 Code Q, excludable moving expense reimbursements under Code P, and nontaxable sick pay under Code J.
Report dependent care benefits over $10,500 as taxable income in Box 1, or amounts over $5,250 if the employee files married filing separately. Verify all inclusions and exclusions meet IRS standards for 2021 reporting to ensure accurate processing.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Federal Income Tax and Social Security Reporting
Report total federal income tax withheld during 2021 in Box 2 to allow employees to determine refund eligibility.
Employees who earned from multiple employers in 2021 and had more than the annual maximum in combined Social Security taxes withheld may claim a credit for excess Social Security tax.
Report Social Security wages subject to the 2021 wage base limit of $142,800 in Box 3 and corresponding Social Security tax withheld in Box 4.
Elective deferrals under Codes D, E, F, S, G, and H must be included in Social Security wages unless plan rules or law specify otherwise.
Medicare Wages and Additional Medicare Tax
Enter Medicare wages and tips in Box 5 with no wage base limit applying to these amounts.
Box 6 must reflect both the standard 1.45% Medicare tax and the 0.9% Additional Medicare Tax withheld on Medicare wages exceeding $200,000.
Direct employees to Form 8959 if they must reconcile Additional Medicare Tax liability based on their filing status.
Report allocated tips in Box 8 and Social Security tips reported by the employee in Box 7 to ensure complete wage reporting.
Retirement Plan Contributions
Box 12 Contribution Codes:
- Code D reports 401(k) elective deferrals with a limit of $19,500 for 2021, plus an additional $6,500 catch-up contribution if age 50 or older.
- Code E reports 403(b) deferrals with a limit of $19,500 for 2021, with up to $25,500 possible if the employee qualifies for both the age 50+ catch-up ($6,500) and the 15-year rule catch-up (up to $3,000 additional).
- Code S reports SIMPLE plan deferrals with a limit of $13,500 for 2021, plus an additional $3,000 catch-up if age 50 or older.
- Code AA reports designated Roth 401(k) contributions.
- Code BB reports designated Roth 403(b) contributions.
- Code EE reports designated Roth governmental 457(b) plan contributions.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Health Coverage and Medical Accounts
Report employer HSA contributions in Box 12 using Code W and Archer MSA contributions using Code R for accurate employee tax record keeping.
Use Code DD to report the total cost of employer-sponsored health coverage, including employee and employer portions and Section 125 cafeteria plan contributions.
Clearly communicate to employees that Code DD amounts appear for informational purposes only and remain excluded from taxable income.
The Code DD amount does not affect the employee's tax liability or wages reported in Box 1 under current IRS regulations.
Dependent Care Benefits Exclusion
The American Rescue Plan Act of 2021 permits employers to increase the maximum dependent care benefits exclusion from $5,000 to $10,500 for tax year 2021.
Employees filing married filing separately may exclude up to $5,250 in dependent care benefits under the temporary increased limit.
Report only amounts exceeding these limits as taxable income in Box 1 when completing the employee's wage statement.
The increased exclusion applies only to the 2021 tax year under the temporary provisions of the American Rescue Plan Act.
Retirement Plan Participation Indicator
Check the "Retirement plan" box in Box 13 if the employee participated in a retirement plan subject to deduction limits under IRC Section 219.
This indicator alerts the employee to limitations on deductible traditional IRA contributions based on their participation status in employer-sponsored plans.
Employees must refer to Publication 590 for phase-out thresholds based on modified adjusted gross income when claiming IRA deductions.
The retirement plan checkbox applies when the employee actively participated in employer-sponsored qualified plans during any part of 2021.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Employer-Specific Information Requirements
Complete Box 14 with employer-specific or state-mandated information as required by your jurisdiction to meet all reporting obligations.
Report state disability insurance taxes, union dues, uniform cost reimbursements, health insurance premiums, educational assistance, or nontaxable income allocations.
Railroad employers must report RRTA compensation, Tier 1 and Tier 2 taxes, Medicare tax, and Additional Medicare Tax in Box 14.
Include tips reported by the employee when calculating RRTA compensation for railroad workers to ensure accurate benefit calculations.
State and Local Tax Information
Report the state employer ID number in Box 15 and state wages/tips in Box 16 for state tax reporting purposes.
Enter state income tax withheld in Box 17 according to state jurisdiction requirements to enable employee tax return filing.
Report local wages/tips in Box 18 and local income tax withheld in Box 19 for applicable jurisdictions.
Enter the locality name in Box 20 and verify that state wage base limits and local tax calculations match actual withholding before finalizing entries.
Copy Assembly and Distribution Deadlines
Furnish Copies B, C, and 2 to the employee by January 31, 2022, to meet federal filing requirements.
Send Copy A and Form W-3 to the Social Security Administration by January 31, 2022, for paper filing or electronic filing.
Retain Copy D for your business records for at least four years from the filing date to ensure compliance with IRS record retention requirements.
Do not fold, cut, or staple Copy A when submitting to SSA because these actions interfere with machine reading.
Form Standards and Submission Requirements
Use only official forms obtained from the IRS or downloaded from IRS.gov for SSA submission to ensure proper processing.
Photocopies or versions printed from unauthorized online sources do not meet SSA processing standards and will be rejected upon receipt.
Ensure all copies provided to employees contain identical information to Copy A filed with the SSA to prevent processing delays.
Any differences between employee copies and the SSA-filed copy will delay processing of the employee's tax return and may result in disallowed refund claims.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
