Form W-2 Wage and Tax Statement: Your Complete Guide for 2021
What the Form Is For
Form W-2, officially called the "Wage and Tax Statement," is the document your employer uses to report your annual wages and the taxes withheld from your paycheck. Every employer who pays you $600 or more during the year—or who withholds any income, Social Security, or Medicare tax from your wages—must provide you with a Form W-2.
Think of it as your official earnings record. It shows not just your gross wages, but also how much federal income tax, Social Security tax, and Medicare tax was taken out throughout the year. State and local taxes are included too if applicable. When you file your tax return, the IRS matches the information on your W-2 against what you report to verify everything adds up correctly.
The form serves multiple purposes: it informs you of your taxable income, helps the Social Security Administration track your earnings for future benefits, and provides documentation for state and local tax authorities. Employees use Copies B, C, and 2 for filing their tax returns and record-keeping, while employers send Copy A to the Social Security Administration (SSA).
When You’d Use It (Late/Amended)
Normal Timeline: Your employer must provide your W-2 to you by January 31, 2022 (for 2021 wages). Employers must also file their copies with the SSA by the same deadline. If you don't receive your W-2 by mid-February, contact your employer first to request it.
What if Your W-2 Is Wrong? Mistakes happen—your name might be misspelled, wages could be incorrect, or tax withholding amounts might not match your records. If you notice an error, immediately contact your employer to request a corrected Form W-2 (called Form W-2c, the "Corrected Wage and Tax Statement"). Your employer should issue the correction and submit it to the SSA.
When Your Employer Won't Cooperate: If your employer refuses to correct an error or you still haven't received a W-2 by late February, you can contact the IRS at 800-829-1040 or visit an IRS Taxpayer Assistance Center. The IRS will contact your employer on your behalf and send you Form 4852 (Substitute for Form W-2), which you can use to estimate your wages and taxes if your employer still doesn't provide the correct W-2 in time for filing.
Amended Returns: If you receive a corrected W-2 after filing your tax return and the information differs from what you reported, you'll need to file Form 1040-X (Amended U.S. Individual Income Tax Return) to fix your tax return.
Key Rules for 2021
Several specific rules and provisions applied to the 2021 Form W-2, including some special COVID-19-related changes:
Filing Requirements: Employers must file a W-2 for any employee from whom they withheld any income, Social Security, or Medicare tax—regardless of the wage amount. They must also file for employees who earned $600 or more even if no taxes were withheld.
COVID-19 Special Provisions: The 2021 tax year included unique provisions related to the pandemic. The American Rescue Plan Act increased the dependent care benefits exclusion from $5,000 to $10,500 for 2021 ($5,250 for married filing separately). Additionally, if your employer deferred collecting the employee portion of Social Security taxes in 2020 under IRS Notice 2020-65, that deferred amount needed to be repaid by December 31, 2021, and reported on your 2021 W-2.
Electronic Filing Threshold: Employers filing 250 or more W-2s must submit them electronically through the SSA's Business Services Online system or approved software. Smaller employers can choose to e-file or use paper forms.
Extensions Are Limited: Unlike many tax forms, extensions to file W-2s with the SSA are not automatic. Employers can request only one 30-day extension using Form 8809, and it's granted only in extraordinary circumstances like natural disasters.
Social Security Wage Base: For 2021, Social Security tax applied to wages up to $142,800. Medicare tax applies to all wages with no cap, and an additional 0.9% Medicare tax applies to wages exceeding $200,000.
Step-by-Step (High Level)
For Employees
- Wait to Receive It: Your employer should provide your W-2 by January 31. Check your mailbox or your employer's online portal if they offer electronic delivery.
- Review for Accuracy: Compare the W-2 against your final paystub of the year. Verify your personal information (name, address, Social Security number) and check that wages and tax withholding amounts match your records.
- Use It to File Your Taxes: Enter the information from your W-2 into your tax return (Form 1040). Box 1 shows your taxable wages, Box 2 shows federal income tax withheld, and Boxes 3-6 show Social Security and Medicare wages and taxes.
- Keep Copies: Retain your W-2 for at least three years after filing your tax return, in case the IRS has questions or you need to verify your Social Security earnings record.
For Employers
- Gather Payroll Information: Compile complete wage and tax information for all employees who meet filing requirements.
- Complete Forms: Fill out W-2s for each employee, ensuring accuracy in all boxes including wages, tips, compensation, and withholding amounts.
- Provide to Employees: Furnish Copies B, C, and 2 to employees by January 31, 2022.
- File with SSA: Submit Copy A of all W-2s along with Form W-3 (Transmittal of Wage and Tax Statements) to the Social Security Administration by January 31, 2022.
- File State Copies: Send Copy 1 to state or local tax authorities as required by your jurisdiction.
Common Mistakes and How to Avoid Them
Employer Mistakes
- Wrong Employee SSN or EIN: Double-check Social Security numbers against employees' Social Security cards. One transposed digit can cause major processing delays.
- Missing Decimal Points: Always include cents in wage amounts (e.g., $45,000.00, not $45,000).
- Incorrect Box 12 Codes: Using the wrong code for retirement contributions or other benefits causes confusion. Consult the official instructions for proper codes.
- Filing Late: Late filing triggers escalating penalties. Mark your calendar for the January 31 deadline.
- Using Downloaded Copy A: Never print Copy A from IRS.gov and mail it—the SSA accepts only official red-ink versions or electronic submissions.
Employee Mistakes
- Not Keeping Records: Always save your W-2s. You'll need them if the IRS audits you or if Social Security questions your earnings record.
- Ignoring Errors: Don't file your tax return with an incorrect W-2. Contact your employer immediately to get a corrected version.
- Mismatching Information: Ensure the SSN and name on your W-2 match exactly what's on your Social Security card and tax return.
Prevention Tips
Employers should use payroll software that auto-calculates tax withholding, verify SSNs early in the year through the SSA's verification service, and file electronically to reduce errors. Employees should compare every paystub to their year-end W-2 and report discrepancies immediately.
What Happens After You File
For Employees
Once you file your tax return using your W-2, the IRS compares the income and withholding you reported against what your employer submitted. If everything matches and you're owed a refund, you'll typically receive it within 21 days for e-filed returns. If there are discrepancies, the IRS may send you a notice requesting clarification or additional documentation.
Your W-2 information also goes to the Social Security Administration, which credits your earnings toward your future Social Security and Medicare benefits. This is why accurate W-2 reporting matters for your long-term financial security.
For Employers
After filing W-2s with the SSA, you'll receive confirmation of acceptance (or rejection if there are errors). The SSA shares W-2 data with the IRS, which uses it to verify individual tax returns. If you made errors, you must file Form W-2c to correct them as soon as possible.
Penalties: Missing the deadline or filing incorrect information triggers penalties. For 2021 returns filed in 2022, penalties range from $60 to $280 per form depending on how late you file, with annual maximums reaching over $3 million for large businesses. Intentional disregard of filing requirements carries even steeper penalties.
FAQs
1. What if I lose my W-2?
First, ask your employer for a duplicate copy. If your employer can't or won't provide one, you can request a wage and income transcript from the IRS by visiting IRS.gov or calling 800-908-9946. This transcript shows wage information the SSA received from your employer.
2. Can I file my taxes without my W-2?
You should wait for your W-2 if possible. If it's late February and you still haven't received it despite contacting your employer and the IRS, you can use Form 4852 to estimate your wages and taxes based on your last paystub. However, this may delay your refund while the IRS verifies the information.
3. Do I need to file a W-2 if I only worked part-time or made very little money?
If you received a W-2, you should generally file a tax return. Even if your income was low enough that you don't owe taxes, filing may get you a refund of withheld taxes or make you eligible for refundable credits like the Earned Income Tax Credit.
4. What's the difference between Box 1 and Boxes 3 and 5 on my W-2?
Box 1 shows wages subject to federal income tax. Boxes 3 and 5 show wages subject to Social Security and Medicare taxes. These amounts can differ if you have pre-tax deductions like 401(k) contributions or health insurance premiums, which reduce Box 1 but not Boxes 3 and 5.
5. My employer went out of business. How do I get my W-2?
Check your mail first—employers must issue W-2s even when closing. If you don't receive it, contact the IRS at 800-829-1040 after February 14. The IRS will help you obtain the information you need or provide Form 4852 for filing.
6. Can my employer email me my W-2?
Yes, but only if you specifically consent to receive it electronically. Employers must meet strict requirements for electronic delivery, including security measures and confirmation that you can access the document. You can always request a paper copy.
7. What if I worked for multiple employers in 2021?
You'll receive a separate W-2 from each employer. When filing your tax return, you'll report the information from all W-2s combined. Keep all copies for your records.
