Payroll

W-2 filing changes for this year-end revealed by SSA

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Last Updated: October 25, 2023

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Is Payroll ready? The W-2 filing process will have an entirely new look and feel this year-end, the Social Security Administration (SSA) recently explained.

Speaking at the IRS October Payroll Industry Call, SSA’s Matthew Newton laid out the changes.

SSA has been focused on IT modernization, including wage reporting features offered through Business Services Online (BSO).

So, as Payroll works to prepare TY 2021 Forms W-2, the filing process should be top of mind, too. Starting in December 2021, the new file upload utility will be available to all users. Currently, some users are participating on a trial basis for W-2 filing.

Uploading W-2s and W-3s will be more user-friendly and self-explanatory for tax year 2021, according to Newton.

Notably, SSA will be able to do a lot of file checking in real time. That’ll give employers a chance to fix errors before uploading files, simplifying the process.

Before uploading Forms W-2

Even though the on-the-spot error checking will be in place, SSA continues to encourage Payroll to run formatted wage files through AccuWage Online, Newton said.

Doing that should take some pressure off when you’re up against the deadline with W-2 filing.

With AccuWage Online, you can check your files to see if they’re formatted according to SSA’s specs. The free Internet application works for both:

EFW2 files (i.e., Forms W-2), and
EFW2C files (i.e., Forms W-2c).

The SSA website provides info on AccuWage Online, including the steps for accessing it. They are:

Log on to BSO.
Select the “Report Wages to Social Security” link.
Accept the attestation.
Once on the Electronic Wage Reporting home page, select the fourth tab (labeled AccuWage Online) and then click the AccuWage Online link.

More redesigns coming

Also during the October IRS Payroll Industry Call, SSA discussed plans for revamping its Forms W-2/W-3 Online.

That’s the BSO application which allows employers to create, save, print and submit a limited number of W-2s.

The redesign won’t be seen this year, Newton stated.

SSA aims to release those W-2 filing changes in the spring of 2022, a much lighter time than year-end.

By December 2022, though, everyone should see the modernized Forms W-2/W-3 Online.

IRS regs on electronic W-2 filing

The options available for submitting Forms W-2 through BSO should gain wider usage, given that the Taxpayer First Act lowered the threshold for electronic filing.

Prompted by that law, IRS issued proposed regs in July 2021.

The regs indicated employers wouldn’t have a choice about electronic W-2 filing if they had an aggregate of:

100 forms for TY 2021, and
10 forms for TY 2022.

The regs lowering the threshold haven’t been finalized, and nothing’s been set in stone, Newton remarked. But SSA isn’t sitting on the sidelines, he added.

Indeed, IRS hasn’t officially altered the current requirement – i.e., that employers filing 250 or more W-2s must do so electronically.

What’s more, the draft 2021 General Instructions for Form W-2 and W-3 mention that “if” regs are issued and effective for tax year 2021 returns, IRS will notify employers. We’ll keep you updated on this.

Need more information?

Many tax changes in 2021 created new challenges for Payroll professionals. Additional and extended COVID-19 relief measures such as the COBRA Premium Subsidy, Child Tax Credit, Employee Retention Credit and Families First Coronavirus Response Act will require special preparation and reporting at year-end. Now is the time to get up-to-date and start planning for an error-free process.

Premier Learning Solutions is offering a workshop, Payroll Year-End 2021: Reporting Requirements, Changes and Best Practices.

Available live and on-demand.

It covers: