Penalty for Employer Not Sending W2: What To Know

Most employers know tax season brings a mountain of paperwork, but missing even a single form can come back to haunt you. If you're wondering about the penalty for employer not sending a W-2, the consequences can be costly and stressful.

W-2 forms aren't just a formality; they're a legal requirement that affects both compliance and employee satisfaction. Accurate, timely filing protects your business from IRS fines, ensures employees can file their taxes smoothly, and reinforces trust in your payroll process.

Main Takeaways:

• Employers face IRS penalties for not sending W-2 forms by January 31, with fines starting at $60 per form and increasing the longer the delay lasts
• Penalties apply not just for late or missing W-2s, but also for incorrect information, filing by the wrong method, or intentional disregard of requirements
• States may have additional W-2 deadlines and separate penalties, so always check local regulations to stay compliant
• If you miss the W-2 deadline, act quickly to file and deliver forms, correct errors, and communicate with the IRS to minimize penalties
• Accurate recordkeeping, verifying employee details, and using reliable W-2 software like Paystubsnow can help prevent costly W-2 penalties

What Is Form W-2?

Form W-2 is an official tax document that reports an employee’s annual wages and the amount of federal, state, and other taxes withheld from their paychecks. Every employee needs this form to accurately file their personal income tax return.

Employers are responsible for preparing and distributing W-2 forms to their employees and submitting copies to the Social Security Administration (SSA) for reporting purposes. Employers must also file Form W-3 (Transmittal of Wage and Tax Statements), which summarizes all W-2 totals for the year and ensures consistency between payroll and SSA records.

Note: W-2 forms are used for employees, while Form 1099-NEC is issued to independent contractors. Misclassifying workers and providing the wrong form can result in additional IRS penalties.

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Key Deadlines for Sending W-2 Forms

There are two deadlines to be aware of when it comes to filing W-2 forms:

Employee furnishing deadline: Employers are required by law to provide each employee with a W-2 by January 31 of the following year. This allows employees ample time to file their tax returns.

SSA filing deadline: Employers must also file copies of all W-2 and W-3 forms with the Social Security Administration (SSA) by January 31.

Filing refers to submitting W-2s and W-3s to the SSA, while furnishing means providing employees with their copies. Both are required, and penalties can apply separately for failing to complete either step.

If you file 10 or more total information returns in a calendar year (including W-2s, 1099s, and other IRS information forms), you are required to e-file. Smaller filers may still paper-file, but electronic filing is strongly encouraged because it reduces errors and ensures faster confirmation. Employers who cannot meet the e-filing requirement may request a hardship waiver using Form 8508.

Employers can e-file W-2s directly through the Social Security Administration’s Business Services Online (BSO) portal. The BSO system validates data, flags errors before submission, and provides a confirmation receipt as proof of successful filing.

A 30-day filing extension using Form 8809 may be available if submitted before January 31. Extensions for furnishing W-2s to employees require a separate written request by fax to the IRS and are not automatic.

Table: W-2 Extensions, Reasonable Cause, and Corrections

Example: If a natural disaster, data loss, or payroll software failure prevents timely filing, you can request penalty relief by showing reasonable cause. Provide documentation such as insurance claims, IT service records, or dated correspondence proving the issue was beyond your control.

Other Reasons for W-2 Penalties

Penalties don't only happen when a W-2 is late or missing. You can also face fines for:

• Submitting incorrect employee names or Social Security numbers
• Failing to e-file when required
• Using paper forms when e-filing is mandatory
• Omitting employees or filing mismatched totals between W-2, W-3, and 941 reports
• Intentional disregard or willful failure to file

Penalty For Employer for Not Sending a W-2: What You Need to Know

Employers who fail to file or furnish W-2 forms accurately can face significant IRS penalties. The fines increase based on how late the forms are filed or provided to employees, and they’re adjusted annually for inflation. Penalties also apply separately for furnishing W-2s to employees and for filing them with the Social Security Administration (SSA).

IRS Penalty Tiers

Below is a breakdown of the IRS W-2 penalty tiers for the 2025 and 2026 tax years:

Penalties can apply separately for not filing W-2s with the SSA and for not furnishing them to employees—meaning an employer could be fined twice for the same issue if both actions are missed.

State-Level and Local W-2 Requirements & Penalties

Many states have their own W-2 deadlines and can issue state-level penalties if you miss their requirements. Some states require electronic filing, and each state sets its own late filing penalty. Some examples include:

• Georgia: $10 per late W-2, up to $50,000 total
• Illinois: $5 per employee per month, up to 5 months
• California: Separate fines for missing employee copies

Some states may fine you even if you meet federal deadlines but miss state requirements. Always check your state's Department of Revenue or Taxation website for specific deadlines and e-filing rules.

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What To Do If You Missed the Deadline

If you realize you missed the W-2 deadline, act quickly:

• File and furnish all missing forms to the SSA and employees immediately.
• If needed, submit Form 8809 before January 31 to request a 30-day extension.
• If you had reasonable cause—such as a fire, natural disaster, or serious illness—submit a written explanation with documentation when responding to the IRS.
• Correct any errors by filing Form W-2c and Form W-3c, and if tax amounts change, file Form 941-X for the affected quarter.
• Respond promptly to any IRS or SSA notices to minimize penalties.

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How to Avoid W-2 Penalties: Best Practices

To prevent incurring penalties for late or missing W-2 forms, employers must adopt the following proactive strategies for timely preparation, accurate record-keeping, and efficient processing:

1. Plan Early & Verify Employee Information

Start preparing your W-2s well before year-end. Review employee names, addresses, and Social Security numbers for accuracy.

Collect any missing information and make sure all employee records match your payroll data.

2. Maintain Accurate Year-Round Recordkeeping

Update payroll records throughout the year. Track wages, tax withholdings, and benefits each pay period.

Keep payroll reports and copies of all W2s for at least four years in case of an audit.

3. Use Reliable W-2 Software

Choose a payroll solution that automates calculations and generates W-2s in the correct format. Good software will help you avoid math errors and missed deadlines.

Paystubsnow helps you create compliant W2 forms quickly and securely, reducing the risk of costly mistakes.

4. Deliver W2s Securely

Remind employees to update their personal information before January 31. Notify them when W2s are ready, and provide secure access—either electronically or by mail.

Encourage employees to review their forms for errors and report any issues right away.

When furnishing W-2s electronically, always obtain written employee consent first and use encryption or a secure employee portal to protect sensitive information like Social Security numbers and tax data.

5. Perform a Pre-Submission Audit

Check that the totals on your W2s match your year-end payroll reports and IRS forms. Look for missing employees or incorrect numbers.

A quick audit before filing can help you catch mistakes and avoid preventable fines.

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Missing or late W2s lead to expensive penalties, but you can avoid them with good planning and accurate recordkeeping. Employers are responsible for sending W2s to employees and filing with the SSA by the deadline each year.

PayStubsNow provides fast, easy, and compliant W-2 generation that helps you stay on track and avoid penalties. By automating your payroll forms, you can reduce errors, save time, and maintain year-round compliance. Whether you manage a small business or a growing team, digital W-2 tools make tax season simple, accurate, and stress-free.

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FAQs About W-2 Penalties

Can an employer get in trouble for not sending a W-2? Yes. Employers face IRS penalties ranging from $60 to $660 per form, depending on how late they file, with no cap for intentional disregard.

How late can an employer send your W-2? Employers must send W-2s by January 31; any forms sent after this date are considered late and subject to penalties, though employers should still send them as soon as possible.

What to do if your employer didn't send you a W-2? Contact your employer first. If you haven’t received your W-2 by mid-February, contact the IRS at 800-829-1040 for assistance.

Do employers legally have to mail your W-2? Employers are required to provide W-2s by January 31, but not necessarily by mail. Electronic delivery is allowed if the employee consents and the method is secure. What matters is timely, accurate furnishing—not the format.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. For guidance specific to your situation, consult a qualified tax professional or employment attorney.