With the flurry of W-2 changes Payroll encountered in 2020, year-end could be tough-going. And the last thing any CFO wants is a costly compliance misstep.
But there’s help.
This checklist of 2020 W-2 changes will help your team ensure compliance.
A checklist of W-2 changes for Payroll
1. The IRS revised the W-2 instructions after releasing them on Feb. 25, 2020. The due date for filing W-2s with the Social Security Administration (SSA) isn’t Jan. 31, 2021, as the original instructions stated. Reason? That’s a Sunday.
The actual deadline: Feb. 1, 2021. The March 2020 instructions reflect that and another change involving penalty amounts.
Caution: Some forms are actually due Jan. 31, 2021, IRS said in its November Payroll Industry Call. One example is Form 7200, Advance Payment of Employer Credits Due to COVID-19.
2. If you need more time to send employees their copies of Forms W-2, you must submit the request via fax. IRS provided details at www.irs.gov/forms-pubs/about-form-w-2 on Aug. 18, 2020.
3. Families First Coronavirus Response Act (FFCRA) wages must be reported on Form W-2, Box 14, or a separate statement. But what about employers that paid more than required? Or those that didn’t have to provide FFCRA wages but did anyway? Tell Payroll not to include such wages in Box 14, because doing so would reduce credits available to the employee, IRS said during another Payroll Industry Call this fall. Only include the three types of wages listed in IRS Notice 2020-54.
4. If you use AccuWage, you may get an error message related to boxes 3 and 4, even if there’s no error. As an SSA spokesperson participating in a fall IRS Payroll Industry Call explained, SSA won’t be updating AccuWage to reflect the optional deferral of the employee portion of Social Security tax.
SSA noted it would start accepting Business Services Online submissions for tax year 2020 by Dec. 7, 2020.
5. Your company can truncate Social Security numbers (SSNs) on employees’ copies of Forms W-2 for tax year 2020. With cybersecurity on people’s minds during this unstable year, Payroll’s efforts to protect SSNs would be valued.