Payroll Webinar: Form W-2 for 2020: All You Need to Know
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The document outlines the W-2 form guidelines for 2020, detailing changes, instructions, and best practices for handling employee tax documentation. It emphasizes the importance of accurate employee information and the implications of filing timelines to ensure compliance with IRS and SSA regulations. Additionally, it highlights technological solutions and tools to streamline HR processes related to payroll and benefits management.
Payroll Webinar: Form W-2 for 2020: All You Need to Know
- 1. INTERNAL USE ONLY Form W2 for 2020
- 2. Organize. Humanize. Maximize. 2 Recruiting & Onboarding Talent Management HR & Benefits Payroll Time & Attendance Ascentis Ascentis provides: • A-la-carte HR technology • Industry-leading time & attendance • Easy dashboards for actionable insights • Unsurpassed support 30+ Years of experience growing with you as an HR professional throughout unprecedented change in the role of HR and expectations of employees.
- 3. Ascentis Payroll, HR, Time, Talent, Recruiting Ascentis: Extension of your team INTERNAL USE ONLY 3 Education W2 Best Practices! Technology Software to help you prepare and distribute W2s! You can focus on your employee experience! What you should expect from your HR technology partner
- 5. Organize. Humanize. Maximize. 5 How to earn credit Stay on the webinar, online for the full 60 minutes Be watching using your unique URL sent to you from GoToWebcast Program codes delivered by email, to registered email, approximately 30 days following today’s session
- 7. ©2020 The Payroll Advisor 7 Form W-2 2020: All You Need to Know
- 8. Our Focus For Today Form still in draft but set in stone The “changes” to the Form W-2 for 2020 Box by Box instructions for completing form Best practices Reconciliations Correcting the form Filing the form-with employees, SSA and states Handling duplicate requests Penalties for late filing ©2020 The Payroll Advisor 8
- 9. ©2020 The Payroll Advisor 9
- 10. Physical Changes to Form W-2 for 2020 None ©2020 The Payroll Advisor 10
- 11. ©2020 The Payroll Advisor Changes to 2020 Instructions 11 Draft instructions have been released. They appear to change the electronic filing limit to 100 on page 3:
- 12. EFW-2 Record Changes for 2019 Publication for 2020 is not yet available Should be available by mid-August ©2020 The Payroll Advisor 12
- 13. Box by Box Review 13 Let’s begin our box by box review of the Form W-2 for 2020 We begin with boxes a-f. These are the info boxes ©2020 The Payroll Advisor
- 14. Void. Check this box when an error is made on Form W-2 and the form is being voided because a new Form W-2 is being completed. Box a—Employee's social security number. Enter the number shown on the employee's social security card. Box b—Employer identification number (EIN). Show the employer identification number (EIN) assigned by the IRS (00- 0000000). Box c—Employer's name, address, and ZIP code. This entry should be the same as shown on the Form 941, Form 943, Form 944, Form CT-1, or Schedule H (Form 1040). 14 Boxes A-C ©2020 The Payroll Advisor
- 15. Box d Control Number 15 Use this box to identify individual Forms W-2. This box does not have to be used. ©2020 The Payroll Advisor
- 16. Boxes e and f— Employee’s name and address Enter the name as shown on the employee's social security card (first, middle initial, last). May truncate on employee copies but not copy A or for states in most cases ©2020 The Payroll Advisor 16
- 17. Boxes e and f Continued ©2020 The Payroll Advisor 17 If the name does not fit, show first name initial, middle initial, and full last name (and ignore the vertical line) It is especially important to report the exact last name of the employee If the name has changed, the employee must get a corrected card from any SSA office. Use the name on the original card until the corrected one is seen.
- 18. Know the Employee’s Name ©2020 The Payroll Advisor 18 It's especially important to know the exact last name If an employee provides a name with apparent compound or multiple last names, carefully question them to determine which name is the beginning of the surname and which (if any) is the middle name
- 19. Employee’s Name in General 19 Generally, do not enter “Jr.,” “Sr.,” etc., in the “Suff.” box on Copy A unless the suffix appears on the card. However, SSA still prefers that the suffix not be entered on Copy A (paper copy). Do not show titles or academic degrees, such as Dr., RN, or Esq., at the beginning or end of the worker's name. If the Social Security card contains a middle name, always complete the W-2 using just the middle initial (with no punctuation). ©2020 The Payroll Advisor
- 20. Use the Correct Name Format ©2020 The Payroll Advisor 20 Compound names no longer require a hyphen 01 Connect parts of a compound name with either a hyphen or a blank space 02 Do not join them into a single word 03 If an employee has a compound name, include all of the parts in the appropriate name field 04 For example, the name John R Smith- Jones: Enter Smith Jones in the last name field. 05
- 21. Electronic Forms 21 You may enter a suffix, e.g., Jr., Sr., in location 62-65 of the Code RW, Employee Wage Record. The field for the middle name/initial is 15 spaces. You may enter either the middle initial or the full middle name. It is acceptable to use the Specifications for Filing Forms W-2 Electronically format for employee copies of W-2s even though it may contain suffixes, middle names, etc ©2020 The Payroll Advisor
- 22. ©2020 The Payroll Advisor Boxes e and f continued 22 Include in the address the number, street, apartment or suite number (or P.O. box number if mail is not delivered to a street address) For a foreign address, give the information in the following order: city, province or state, and country Follow the country's practice for entering the postal code Do not abbreviate the country name
- 23. Social Security Number Verification Service (SSNVS) 23 The Social Security Number Verification Service (SSNVS) is one of the services offered by Social Security’s Business Services Online (BSO) Allows registered users (employers and certain third-party submitters) to verify the names and Social Security Numbers (SSNs) of employees against Social Security Records. ©2020 The Payroll Advisor
- 24. With SSNVS You May… 24 Verify up to 10 names and SSNs online and receive immediate results, and upload batch files of up to 250,000 names and SSNs and usually receive results the next government business day. Can key multiple screens No limit to the number of times the webpage may be used within a session File must be a text file (.txt) not Excel (.xls) ©2020 The Payroll Advisor
- 25. Box 1—Wages, tips, other compensation 25 Show the total taxable wages, tips, and other compensation, (before any payroll deductions), that were paid to the employee during the year. ©2020 The Payroll Advisor
- 26. Box 2—Federal income tax withheld 26 Show the total federal income tax withheld from the employee's wages for the year Include the 20% excise tax withheld on excess parachute payments. ©2020 The Payroll Advisor
- 27. Box 3—Social security wages 27 Show the total wages paid (before payroll deductions) subject to employee social security tax but not including social security tips and allocated tips The total of boxes for social security wages and tips cannot exceed $137,700 (2020 maximum social security wage base). ©2020 The Payroll Advisor
- 28. Box 4—Social security tax withheld 28 Show the total employee social security tax (not employer’s share) withheld, including social security tax on tips. For 2020, the maximum is $8,537.40 Include only taxes withheld (or paid by employer for the employee) for 2020 wages and tips. ©2020 The Payroll Advisor
- 29. Box 5—Medicare wages and tips 29 Enter the total Medicare wages and tips in box 5 including the wages subject to the Additional Medicare Tax Be sure to enter tips that the employee reported even if there was not enough employee funds to collect the Medicare tax for those tips. ©2020 The Payroll Advisor
- 30. Box 6—Medicare tax withheld 30 Enter the total employee Medicare tax (not the employer’s share) withheld Include only tax withheld for 2020 wages and tips Additional Medicare Tax withholding on wages subject to FICA taxes are reported in combination with withholding of regular Medicare tax ©2020 The Payroll Advisor
- 31. Box 7—Social security tips 31 Show the tips that the employee reported even if there was not enough employee funds to collect the social security tax for the tips The total of boxes 3 and 7 should not be more than $137,700 ©2020 The Payroll Advisor
- 32. Box 8—Allocated tips 32 If a food or beverage establishment, show the tips allocated to the employee See the Instructions for Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips Do not include this amount in boxes 1, 3, 5, or 7. ©2020 The Payroll Advisor
- 33. Best Practices for Gathering, Collecting and Reconciling Data Taxation of fringe benefits awards and prizes educational assistance moving expenses personal use of company cars gift certificates Best practices for gathering the data ©2020 The Payroll Advisor 33
- 34. Box 9—Verification Code 34 Will not be used box is again “grayed out” ©2020 The Payroll Advisor
- 35. Box 10—Dependent Care Benefits 35 Show the total dependent care benefits under a dependent care assistance program (section 129) paid or incurred by the employer for the employee Report all amounts paid or incurred (regardless of any employee forfeitures), including those in excess of the $5,000 exclusion ©2020 The Payroll Advisor
- 36. Box 10 Continued… 36 This may include: a) The FMV of benefits provided in kind b) An amount paid directly to a daycare facility by the employer or reimbursed to the employee to subsidize the benefit c) Benefits from the pre-tax contributions made by the employee under a section 125 dependent care flexible spending account. ©2020 The Payroll Advisor
- 37. Box 11 37 The purpose of box 11 is for the SSA to determine if any part of the amount reported in box 1 or boxes 3 and/or 5 was earned in a prior year The SSA uses this information to verify that they have properly applied the social security earnings test and paid the correct amount of benefits ©2020 The Payroll Advisor
- 38. Box 11 Continued 38 Show distributions to an employee from a nonqualified plan or a nongovernmental section 457(b) plan These will also be reported in box 1 Make only one entry in this box See page 18 and pages 31-32 of Form instructions for more details ©2020 The Payroll Advisor
- 39. Box 12—Codes 39 Complete and code this box for all items described in the instructions Note that the codes do not relate to where they should be entered in boxes 12a-12d on Form W-2 For example, if required to report code D in box 12, enter code D and the amount in box 12a of Form W-2 Do not report in box 12 any items that are not listed as codes A-HH. ©2020 The Payroll Advisor
- 40. ©2020 The Payroll Advisor 40
- 41. Code DD ©2020 The Payroll Advisor 41 Use this code to report the cost of employer- sponsored health coverage Still required under the Patient Protection and Affordable Care Act (Affordable Care Act) Required as of January 1, 2012 Requirement contained in new section of Internal Revenue Code – Section 6051(a)(14) Reminder—reporting does not mean the health insurance is taxable
- 42. Box 13—Checkboxes 42 Check all boxes that apply. ©2020 The Payroll Advisor
- 43. Reconciliation Box 13 43 A very important box that must be reviewed is box 13 This box is for reporting whether or not the employee is covered by a retirement plan It is critical that this box be marked correctly The definition of retirement plan can be found in the instructions for the Form W-2 on the IRS website The major ones are listed on the next slide Penalties can be assessed if this box is marked incorrectly. ©2020 The Payroll Advisor
- 44. Box 14—Other Employers may also use this box for any other information that they want to give to the employee. Please label each item. ©2020 The Payroll Advisor 44
- 45. Boxes 15-20 45 Belong to the states Use individual state requirements for reporting wages correctly Be careful to follow state requirements when handling multistate employee reporting ©2020 The Payroll Advisor
- 46. State Disability Examples Boxes 15-20 46 Example: SDI for CA goes in Box 18-20 Example: TDI Worker Contributions for NJ goes in Box 14 ©2020 The Payroll Advisor
- 47. Their Reconciliation Process of Your Forms 47 The following slides demonstrate the IRS’s and the Social Security Administration’s process of reconciling your submitted forms to their records… ©2020 The Payroll Advisor
- 48. ©2020 The Payroll Advisor 48
- 49. ©2020 The Payroll Advisor 49
- 50. ©2020 The Payroll Advisor 50
- 51. Review of Filing Deadlines for 2020 51 To employee: February 1, 2021 Paper filers to SSA: February 1, 2021! Electronic filers to SSA: February 1, 2021! If employment ends before December 31, 2020 and employee asked for Form W-2 they must receive the completed copies within 30 days of the request or within 30 days of final wage payment, whichever is later ©2020 The Payroll Advisor
- 52. MT WY ID WA OR NV UT CA AZ ND SD NE CO NM TX OK KS AR LA MO IA MN WI IL IN KY TN MS AL GA FL SC NC VA WV OH MI NY PA MD DE NJ CT RI MA ME VT NH AK HI January 31st or last day in January February 28 or last day in February No state income tax Form W-2 Due Dates ©2020 The Payroll Advisor 52 Form not required to be submitted 1-31 for electronic filers 2-15 as of 2020
- 53. Other Items of Note 53 Extensions: No longer automatic 1-30 day extension only will be granted Only granted for extraordinary circumstances or catastrophe Social Security Number: do not truncate Do not include logos, slogans, advertisements on any copy of form ©2020 The Payroll Advisor
- 54. Filing Requirements 54 Electronic or Paper only to SSA and they really don’t want the paper! Must file electronically if 250 or more forms—may change! Complete Form W-3 if filing on paper States may require or accept magnetic media such as CD, diskette (still!) or electronic filing Some states do not require filing Using SSA’s BSO to File W-2s For smaller companies or EINs do it online Larger companies can upload file W-2cs Can file them independent of W-2s ©2020 The Payroll Advisor
- 55. MT WY ID WA OR NV UT CA AZ ND SD NE CO NM TX OK KS AR LA MO IA MN WI IL IN KY TN MS AL GA FL SC NC VA WV OH MI NY PA MD DE NJ CT RI MA ME VT NH AK HI If 250 or more If 50 or more No state income tax Form W-2 Electronic Filing Requirements ©2020 The Payroll Advisor 55 Form not required to be submitted All must file electronically If 100 or more If 25 or more Electronic filing not required If 10 or more
- 56. Reconciliation Form ©2020 The Payroll Advisor 56 If processing on paper must submit Form W-3 as an annual reconciliation form Electronic filers do not have to submit Form W-3 State may have annual reconciliation form
- 57. MT MW-3 WY ID 967 WA OR OR-WR NV UT CA AZ A1-R ND 307 SD NE W-3N CO DR 1093 NM RPD-41072 TX OK KS KW-3 AR AR-3MAR LA L-3 MO MO W-3 IA Verified Summary of Payments MN WI WT-7 IL IN WH-3 KY K-3 TN MS 89-140 AL A-3 GA G1003 FL SC WH-1606/1612 NC NC-3 VA VA-6 WV WV/IT-103 OH IT 3 MI 5081 NY PA Rev-1667R MD MW-508 DE W-3 NJ NJ-W-3 CT CT-W3 RI RI-W-3 MA M-3 ME W-3ME VT NH AK HI HW-3 No form No state income tax Form W-2 Reconciliation Form ©2020 The Payroll Advisor 57 W-2s not required to be submitted Annual form Required to be filed Annual form optional WHT-434
- 58. Correcting the Form W-2 58 If prior to processing then correct the original If prior to disbursement to the employee Then correct the original If after given to employee but not yet submitted to SSA Then replace the original and correct the “employer submission version” ©2020 The Payroll Advisor
- 59. When to Use Form W-2c ©2020 The Payroll Advisor 59 If the Form W-2 has been given to employee and submitted to SSA then issue Form W-2c If given to employee but the file is not correctable Be sure to use 8-2014 version
- 60. ©2020 The Payroll Advisor 60
- 61. Electronic Forms W-2 to Employees 61 Software or website specs will vary Employee must consent—electronic consent even if consenting on paper Big stumbling block is disclosure requirements Statement can be furnished on the web if employee given access info See link section – IRS code ©2020 The Payroll Advisor
- 62. Disclosure Requirements ©2020 The Payroll Advisor 62 May get paper if they want it How long will the consent last Procedure for paper copy after giving consent How to withdraw consent and how it is confirmed Conditions on when electronic Form W-2 is not available Procedures for updating contact info for employee Employer must notify if changes in contact info for employer
- 63. Duplicate Form W-2 ©2020 The Payroll Advisor 63 May require employee to download—should furnish printer and computer to use just in case No disclosure required for duplicate forms Nothing in the regulations require a duplicate form to be on paper Employers are not prohibited from charging a fee for the issuance of duplicate Form W-2 per IRS Code Create form for employees to use Announce procedures in advance to employees
- 64. Sample Request For Duplicate Form W-2 for Tax Year: 2020 Please return this form to: Petrie Plastics Company Inc. Payroll Department M/S 406 1402 Bonny Meadow Road Anytown, NY 01014 Fax: 123-45-6789 E-mail: payroll@petrieplastics.com Please issue a duplicate copy of the Wage and Tax Statement (Form W-2) for the following employee: Employee Name: __________________________________________________________ Social Security No: _________________ Badge # (for current employees):______________ Distribution of Form: (Circle One) Pick-Up From Payroll Mail Form Mail Form To: ____________________________________________________________ City State ZIP Code Reason For Request: (circle one) Never Received Lost/Misplaced/Destroyed Signature of Employee: ______________________________________________________ If requesting form be mailed please provide copy of picture identification such as driver’s license (former employees) or ID badge (current employees) along with this request form. If picking up the duplicate Form W-2 in person, please be prepared to show picture ID such as a driver’s license (former employees) or your ID badge (current employees). Allow five business days to process your request. For Payroll Department Use Only: Date request received: _________________ Date form mailed to employee: __________ Received by employee: ___________________________________ Signature of Employee: ___________________________________ ©2020 The Payroll Advisor 64
- 65. Penalties In Effect 65 If you fail to file a correct Form W-2 by the due date and cannot show reasonable cause you may be subject to a penalty as provided under section 6721: Fail to file timely Fail to include all information required to be shown on Form W-2 Include incorrect information on Form W-2 File on paper forms when you are required to e-file Report an incorrect TIN Fail to report a TIN Fail to file paper Forms W-2 that are machine readable Using a reporting agent or payroll service does not relieve employer of penalty ©2020 The Payroll Advisor
- 66. Penalties In Effect 2020 66 Penalty based on when correct Form W-2 is filed Per Form W-2: $50 if filed within 30 days of due date—max is $545,500 $110 if filed more than 30 days but by August 1st –max is $1,696,000 $280 (up from $270) if filed after August 1st or if not filed at all—max $3,392,000 If intentional then $560 per W-2 with no max ©2020 The Payroll Advisor
- 67. De minimis Errors 67 Due to the new due date, penalties for errors have been updated Even if you can’t show reasonable cause you may not be penalized of small number of errors if: • Filed forms on time • Either failed to include information or included incorrect information • Filed corrected returns by August 1 >10 or ½ of 1% to total forms filed Does not apply to TIN, payee surname or $ amount ©2020 The Payroll Advisor
- 68. De minimis Errors ©2020 The Payroll Advisor 68 Incorrect $ amounts may fall under safe harbor No single amount in error differs form the correct amount by more than $100 No single amount reported for tax withheld differs from the correct amount by more than $25 If safe harbor applies you do not have to correct form… Unless employee asks for corrected form
- 69. Record Retention ©2020 The Payroll Advisor 69 Forms W-2 must be kept for: • Four years after the date the tax becomes due • Or • The date the tax is actually paid (if later) for the return period to which the records relate Keep for 4 years any forms that were undeliverable unless you can reproduce them electronically after 4 years Do not send undeliverable forms to SSA
- 70. Links and Websites 70 Electronic W-2 to Employees: 26 CFR § 31.6051-1(j) http://www.gpo.gov/fdsys/pkg/CFR-2008-title26-vol15/pdf/CFR-2008- title26-vol15-sec31-6051-1.pdf PDF on Filing electronically: http://www.socialsecurity.gov/employer/bsohbnew.htm Info on verifying social security numbers on line: http://www.socialsecurity.gov/employer/ssnv.htm PDF on Verifying social security numbers and names: http://www.socialsecurity.gov/employer/ssnvs_handbk.htm Social Security Administration Business Services Online: http://www.socialsecurity.gov/pgm/business.htm ©2020 The Payroll Advisor
- 71. Final Questions ©2020 The Payroll Advisor 71
- 72. Organize. Humanize. Maximize. 72 How Ascentis Payroll Can Help The Form W-2 is one of the most important documents that payroll departments must process and Ascentis is here to help. • Ascentis tax filing service prepares and distributes W2s for all employees • Eliminate the hassle of preparing and filing W2s • Ascentis handles federal, state, and local tax calculations
- 73. Organize. Humanize. Maximize. 73 Learn More If you are interested in Ascentis Payroll, or our other HR technology like HR, Time, Talent, Recruiting, please indicate your interest if you haven’t done so already with the following poll.
- 74. Organize. Humanize. Maximize. 74 How to earn credit Stay on the webinar, online for the full 60 minutes Be watching using your unique URL sent to you from GoToWebcast Program codes delivered by email, to registered email, approximately 30 days following today’s session
- 75. Organize. Humanize. Maximize. 75 Share with your colleagues
- 76. Organize. Humanize. Maximize. 76 Contact Us info@ascentis.com www.ascentis.com