What W-2 reports
Form W-2 shows total wages, tips, and other compensation; federal income tax withheld; Social Security and Medicare wages and taxes; state and local wages and taxes; retirement plan participation; dependent care benefits; and a long list of Box 12 codes for fringe benefits, deferrals, and other items. Recipients use it to file their personal income tax return.
Filing deadline
Employers must furnish Form W-2 to each employee and file Copy A with the Social Security Administration by January 31 of the following year. There is no automatic extension for W-2 filing — only a one-time, single 30-day extension available by filing Form 8809 for hardship reasons.
S-corp owners and reasonable compensation
Owners of S-corporations who provide services to the corporation must pay themselves "reasonable compensation" through W-2 wages before taking distributions. The IRS scrutinizes S-corps that pay zero or token W-2 wages because doing so avoids payroll taxes on what is effectively compensation. Document the reasoning behind the salary set each year.
Common Box 12 codes
Code D is elective deferrals to a 401(k); Code DD is the cost of employer-sponsored health coverage (informational only); Code W is employer and employee HSA contributions; Code S is salary reductions to a SIMPLE retirement account; Code AA is Roth 401(k) contributions; Code BB is Roth 403(b). Mismatches between Box 12 and the corresponding deduction on the personal return are a common audit trigger.
Correcting errors
If you discover a W-2 error after filing, issue Form W-2c and file Form W-3c with the SSA. For income tax errors, employees may need to file Form 1040-X to amend their personal return.
Software vs. paper filing
Most filers use commercial tax software or a tax preparer to handle Form W-2, Wage and Tax Statement — and that is the right call for nearly all small-business returns. The IRS Free File program is open to taxpayers below an annually adjusted income limit and supports most small-business forms. Direct paper filing is technically still an option but is slower, more error-prone, and increasingly relegated to corner-case situations. Whichever path you choose, retain a digital PDF of the as-filed return for at least three years (six if you under-reported income by more than 25%).