When must W-2s be distributed?
All employers are required to furnish a W-2 to each person employed every year. This form must show total wages and other compensation, tips reported and allocated, taxable wages and tips for social security, Medicare and federal withholding, as well as all withholdings for state, federal and local income tax or disability.

There are also stringent requirements concerning the correct reporting of various fringe benefits, expense reimbursements and pension plan contributions.

You must give this form to your employees as soon after December 31 as possible. The deadline for providing these is January 31. If an employee terminates their employment during the course of the year, they are also within their rights to request a W-2 at that time. You must then provide them with one within 30 days of their request.

W-2s can be mailed to the last known address of an employee. Undeliverable statements should be retained for at least four years.

A Form W-3 must be completed annually by the last day of February to send to the Social Security Administration (SSA) along with Copy A of the W-2s. If you file 250 or more W-2s for a year, you must report the information to the SSA in an automated fashion. This might be a magnetic tape, diskette, electronic file transfer or Internet file distribution. Using electronic file transfer to send W-2 and W-3 information to the SSA extends the due date by 30 days; however, state agencies may or may not extend the due date for this method.

Many states and some localities have similar requirements for automated reporting after hitting a threshold. State and local requirements should be verified prior to year-end.

Amounts reported on the W-2s must agree with the totals reported on the quarterly tax returns for the year, as well as the totals reflected in the W-3.

Additional information concerning W-2s can be found in Circulars A & E, and Publication 393, Federal Employment Tax Forms.