There are some major changes to Form W-2 for the 2026 tax year compared to the previous years. Box 12 has new codes, and Box 14 has been split into two. The threshold for wage reporting has also increased to $2,000 or more.<\/p>\n
This guide will explain how to complete Form W-2<\/u><\/a> for your small business.<\/p>\n A small business usually needs to provide an employee with Form W-2 if the following requirements are met:<\/p>\n The $2,000 limit in Case 3 applies only to the third requirement. An employee who was paid less than $2,000 would still need a Form W-2 if either of the first two cases applies.<\/p>\n To complete an employee’s Form W-2, a business needs the following information:<\/p>\n Employee identity: <\/strong>The employee\u2019s name, address, and Social Security Number.<\/p>\n Pay and taxes:<\/strong> The gross amount of wages, tips, bonuses, and commissions. Also, include federal income tax, Social Security tax, Medicare tax withheld, and the state and local taxes.<\/p>\n Benefits and coded items:<\/strong> Taxable fringe benefits, retirement plan contributions reported in Box 12, cash tips, and qualified overtime.<\/p>\n Employer details: <\/strong>The legal name and address of the business and the Employer Identification Number (EIN).<\/p>\n Note: Always review year-end entries, since a bonus, personal use of a company car, and other compensation can raise taxable wages.<\/p>\n Form W-2 amounts are generally pulled from payroll records and should be reconciled with applicable Forms 941, 943, or 944. Check the withheld income tax, Social Security, and Medicare amounts. Also, verify bonuses, taxable fringe benefits, and qualified tips.<\/p>\n The total in Form W-3<\/u><\/a> should align with the totals of the returns; if they do not, find the cause before the wage data goes to the Social Security Administration (SSA).<\/p>\n The first step is to provide the correct employer’s EIN, name, and address. The employee’s name and SSN must match exactly as shown on the Social Security card, along with a current address.<\/p>\n The Social Security Administration (SSA) credits each worker’s earnings by SSN, so these entries have to be carefully reviewed.<\/p>\n These boxes report wages and the tax withheld.<\/p>\n For tax year 2026, the employer and employee each pay 6.2% Social Security tax on wages up to $184,500. Medicare tax is 1.45% each, with no wage limit. Once the yearly pay is more than $200,000, the employer also withholds 0.9% Additional Medicare Tax.<\/p>\n The following boxes are based on the employee’s payroll and benefit records.<\/p>\n For tax year 2026, Box 12 includes two new codes. Code TP reports cash tips the employee reported to the employer. Code TT reports qualified overtime. When Code TP is used, Box 14b must include the employee’s Treasury Tipped Occupation Code.<\/p>\n The final boxes provide state and local agencies with the employer’s state ID number, taxable wages, and income tax withheld. For employees who moved or worked across multiple state lines, the rules will vary.<\/p>\n After completing the form, Copy A of Form W-2 is submitted to the SSA. For paper filings, Form W-3 has to be included with Copy A as the transmittal form. In an electronic filing, the totals for Form W-3 come from the submitted Forms W-2.<\/p>\n Each box on your Form W-2 reports wages subject to a particular federal tax. Consequently, their individual totals may not agree. Box 1 reports wages on which federal income tax was withheld. Box 3 reports wages on which Social Security taxes were withheld, subject to a limitation of $184,500 for the tax year 2026. Box 5 has no such limitation for Medicare wages. Pre-tax deductions and contributions to retirement plans may also affect each Box differently.<\/p>\n Form W-2 is now required to report wages of $2,000 or more, even when no federal taxes were withheld. The form also includes these changes:<\/p>\n When a payroll company, accountant, or filing provider prepares Form W-2 for an employer, the employer is still responsible for ensuring the information on the forms is correct and filed on time. Before approving the W-2s, check the following and make sure the data is accurate:<\/p>\n Both deadlines have been moved to February 1 because January 31, 2027, falls on a Sunday.<\/p>\n When employment ends during tax year 2026, the employer may furnish Form W-2 right away instead of waiting till the deadline.<\/p>\nW-2 Filing Requirements for Small Business Employers<\/h2>\n
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What Records Does a Small Business W-2 Need?<\/h2>\n
What Should a Business Reconcile Before Preparing Form W-2?<\/h2>\n
How Do Employers Fill Out Form W-2 for Each Employee?<\/h2>\n
Identifying Details<\/h4>\n
Boxes 1 to 6: Wages and Federal Payroll Taxes<\/h4>\n
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Boxes 7 to 14b: Tips, Benefits, and Other Details<\/h4>\n
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Boxes 15 to 20: State and Local Information<\/h4>\n
Filing Copy A With the SSA<\/h4>\n
Form W-2 Boxes 1, 3, and 5 May Show Different Amounts<\/h2>\n
What Changed on Form W-2 for Tax Year 2026?<\/h2>\n
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Who Reviews Form W-2 Before Filing?<\/h2>\n
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Form W-2 Filing Deadline For The 2027 Filing Season<\/h2>\n
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\n Requirement<\/strong><\/th>\n Due Date<\/strong><\/th>\n<\/tr>\n \n File TY 2026 Forms W-2 with the SSA<\/td>\n February 1, 2027<\/td>\n<\/tr>\n \n Furnish copies to employees<\/td>\n February 1, 2027<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n What Happens If a Filed Form W-2 Has a Mistake?<\/h2>\n