How to Fill Out W-2 Forms for Your Employees

Every January, you prepare Form W-2 for each employee you paid during the prior tax year. Your employees use it to file their tax returns. The IRS and Social Security Administration use it to verify wages and withholding.

The W-2 reports what you already know: wages paid and taxes withheld. If you've been running payroll all year, every figure on the form is already in your payroll records.

You need to know what information to gather, how to fill out the critical boxes, when to file with the SSA, and how to distribute copies to your employees by the January 31 deadline.

SurePayroll By Paychex builds W-2s from your payroll records throughout the year, so January filing is a review, not a rebuild.

What is Form W-2 and who needs one  

Form W-2, also known as the Wage and Tax Statement, is the annual form you issue to every employee from whom you withheld federal income tax, Social Security tax, or Medicare tax during the tax year, regardless of how much you paid them.  

Form W-2 is one of nearly 4.6 billion information returns the IRS processes each year — along with 1099s and other documents your business may file.

Independent contractors get a different form. You issue Form 1099-NEC to each contractor you paid $2,000 or more in 2026. The split is straightforward: W-2s are for employees where you withheld taxes. 1099-NECs are for contractors who handle their own.

If your team is a mix, you prepare both. Both are due January 31, but they have different reporting rules.

Need to fill out a 1099-NEC? Use the information your independent contractor filled out in Form W-9 to complete and submit Form 1099-NEC.

What information you need to gather before you start

Pull your year-end totals from your payroll reports.  

Each employee's form needs the same figures: total wages, federal income tax withheld, Social Security wages, Social Security tax withheld, Medicare wages, and Medicare tax withheld. Your payroll software or payroll service already tracks these line items by employee, with totals updating each pay period.

You also need each employee's name, Social Security number (SSN), and current address. Confirm SSNs against your Form W-2 records and verify any address changes from the past year. A wrong SSN, misspelled employee's name, or incorrect address can trigger a rejected wage report from the SSA or a delayed delivery to the employee.

If you withheld state income tax or local income tax, pull those totals. Enter those in the state-and-local section of the form along with your state tax ID number.

Cross-check your year-end wage and tax withholding totals against the four quarterly Form 941 returns you filed during the year. Your Form 941 totals (lines 2 through 5d) should reconcile with your aggregate W-2 totals across all employees, plus or minus standard fourth-quarter adjustments.

This work is detail-heavy, and the stakes are real. Nearly 4 in 10 small business owners who switched to SurePayroll cited the time payroll was taking. Another 38% wanted to eliminate the risk of errors. Year-end filing is both.

SurePayroll tracks every figure you need throughout the year, so year-end totals pull directly from your payroll records.

We own a small farm and just hired our first part-time employee. We had no idea how to calculate or file taxes, so we decided to use the full service."  Therese, Trustpilot review

How to fill out critical W-2 boxes (employer section)

You'll fill in three groups of boxes: wage totals (Boxes 1, 3, 5), tax withholdings (Boxes 2, 4, 6), and reportable benefits and pay codes (Boxes 12 and 14).  

Above the numbered boxes, you enter identifying information: your employer identification number (EIN), your company's name and address, the employee's name, employee's social security number, employee's address, and a control number if your payroll system uses one.

New for 2026: Reporting qualified tips and overtime

For tax year 2026, two new codes apply for qualified tips and overtime.  

Use Code TP for qualified tips and Code TT for the qualified overtime premium portion only, not total overtime pay. The premium is the half-time differential, the 0.5x in time-and-a-half.  

If you pay an employee $30 per hour and they work an overtime hour at $45, you enter $15 as the premium under Code TT, not the $45 total amount.

Use Code TP to report qualified tips.  

Completing W-2 step by step

Boxes A through F: Enter your business information, including EIN and state ID number, and the name, address, Social Security number of your employee.

Box 1: Enter total taxable wages for federal income tax. That figure is your employee's earnings minus pre-tax deductions like traditional 401(k) contributions, health insurance premiums paid through a Section 125 plan, and pre-tax flexible spending account contributions. If your employee contributed $5,000 to a 401(k) on $60,000 in gross pay, you enter $55,000 in Box 1 as their taxable income.

Box 2: Enter the federal income tax withheld for that employee, taken straight from your payroll records.  

Box 3 & 4: For Social Security, you enter wages in Box 3 (capped at $184,500 for tax year 2026) and the tax withheld at 6.2% of Box 3 in Box 4.  

Box 5 & 6: For Medicare, you enter wages with no annual cap in Box 5 and the tax withheld at 1.45% of Box 5 in Box 6, plus the additional 0.9% Medicare surtax on any individual employee's wages above $200,000.

Box 7: If your employees regularly receive tips, add their reported Social Security tips to Box 7.  

Box 8: Enter allocated tips (the amount you assign to a tipped employee when their reported tips fall below 8% of gross receipts at a large food or beverage establishment).

Box 9: Leave this box empty. The IRS does not currently use this box.  

Box 10: Enter the dependent care benefits you paid through a qualified plan.

Box 11: Enter non-qualified plan distributions (taxable amounts paid to the employee from a deferred compensation plan).  

Box 12, you enter specific compensation and benefit codes from your payroll records. The codes most small business owners use are Code D for employee 401(k) and other retirement plan contributions, Code W for employer and employee Health Savings Account (HSA) contributions, and Code DD for the cost of employer-sponsored health coverage (informational only, not taxable).

Box 13: Check any boxes that apply: statutory employee status, retirement plan participation, or third-party sick pay.  

Box 14: Use for open-ended items like union dues, after-tax health insurance premiums, post-tax retirement plan contributions, or state-specific exemptions you need to surface to the employee.

Box 14b: Enter the tipped occupation code so the IRS can identify the role.

Use the remaining boxes for specific situations.  

S-Corp and Independent Contractors

If you own an S-corporation and pay yourself a reasonable salary, you report that salary on a W-2 like any other employee's wages. Shareholder distributions to you do not.

If your team includes 1099 contractors and freelancers alongside W-2 employees, you file Form 1099-NEC for each contractor and use Form 1096 as the summary transmittal when filing on paper.

Learn the key differences between employees and independent contractors.

"Saving hours per month. Takes care of the growing variety of state and federal forms and withholdings on both the employer and employee sides. The avoided stress alone justifies the fee. Only regret not finding it sooner." - Martin, Trustpilot review

When and how to file W-2s with the IRS and SSA

You file W-2s with the SSA, not with the IRS.  

Your deadline is January 31 for both: File Copy A of every W-2 with the SSA and deliver Copy B to each employee.

When you file by mail, include Form W-3. The W-3 is a transmittal or cover sheet on which you include total wage and withholding figures across all your W-2s, which you've reconciled to your Form 941 returns.  

Submit the W-3 with the Copy A forms in a single packet to the SSA, along with any copies your state requires.

If you file 10 more W-2’s, you’re required to file electronically. E-filing is optional for less than 10, but typically faster with immediate confirmation.

The SSA's Business Services Online (BSO) portal is the standard channel: Register your employer account, upload the W-2 wage file (or enter forms directly), and confirm submission.  

Use the portal to file forms W-2 and W-2c corrections. When you file electronically, the wage file replaces the paper W-3, so you do not submit Form W-3 separately.

Your state's tax filing is separate from the federal SSA process. Each state with a state income tax sets its own deadline (often January 31 to align with federal) and its own filing portal or transmittal form. Confirm your state's requirements before you finalize your year-end payroll reports.

SurePayroll generates W-2s from your payroll data, files them electronically, and prepares employee copies for distribution.

How to distribute W-2s to your employees

Send a W-2 to every employee on your payroll for any part of the prior tax year by January 31. That includes employees who left mid-year, employees on leave at year-end, and seasonal workers. The deadline is the same no matter how many hours they worked or when they separated.

You have two delivery options: paper or electronic.  

You can mail paper copies to the employee's last known address, or hand-deliver them if your employees work on-site.  

Electronic delivery requires employee consent and access to a device where they can view the file.

Employees need at a minimum the figures in Box 1 and Box 2 to file a federal tax return, plus state wages and state taxes data for any state income tax return.

What to do if you need to correct a W-2

Two correction paths exist, depending on whether you have already filed.  

If you catch the error before submitting Copy A to the SSA, fix the form and file the corrected version. The original draft becomes irrelevant once you file the correct one.

After filing, you correct a W-2 by filing Form W-2c, the Corrected Wage and Tax Statement, along with Form W-3c to summarize corrected wage and tax information.  

Common corrections include a wrong wage figure (often traced to a missed pre-tax deduction), an incorrect employee's social security number, an incorrect amount of taxes withheld, or an employee name change that did not make it into payroll before year-end.  

The W-2c shows both the previously reported figures and the corrected ones, side by side, so the SSA can update the wage record without confusion.

If your employee has already filed their tax return based on the original W-2, they may need to file Form 1040-X (Amended Individual Income Tax Return) to reconcile the difference.  

Send the corrected Copy B to the employee at the same time you file the W-2c with the SSA so they can act on it without delay.

New to running payroll? Our step-by-step guide to how to manage payroll for a small business covers everything from setup to tax filing — no experience required.

Year-end filing, automated

You have two paths: manual prep or automated payroll.

Manual prep means blocking time in early January to pull year-end totals, fill out each box for each employee, prepare the W-3 transmittal, and file with the SSA. It's doable for a small team with thorough payroll records.

SurePayroll builds each W-2 as you run payroll. Wages and withholdings populate automatically. When January arrives, SurePayroll files the forms and prepares employee copies for distribution.

Get started with SurePayroll. See plans and pricing.

‍

‍

‍

‍