How to Submit W-2 to IRS Online? Simplified Process and Requirements

The IRS continues to invest considerable resources into moving the form filing process online and making it easier for taxpayers to submit their tax information.

New filing regulations released on February 21, 2023, lowered the electronic filing mandate for businesses from 250 forms to just ten forms. According to these regulations, all companies filing more than ten W-2 forms must do so electronically.

Moreover, Social Security Administration updated its Businesses Services Online (BSO) feature, so now employers need a BSO account to file Form W-2 with SSA.

Employees can still choose if they want to receive this form on paper or electronically, and you must consult each of your employees before issuing their W-2 for the current tax year.

Let’s see what you must do to submit Form W-2 to the IRS online and which requirements you must meet to complete the process.

Guidelines Employers Must Follow When E-Filing W-2s

All businesses must report the payroll taxes they withhold from wages they pay to their employees to SSA, state and local tax agencies. Failing to comply with this requirement carries substantial consequences, including civil penalties.

Employers must submit W-2s for all their employees to each of these tax authorities by January 31 or the next business day if the date falls on a federal holiday or the weekend. Employees must also receive their copies of this form by this deadline.

Filing W-2s for each employee that received more than $600 from an employer in a tax year is mandatory. Moreover, businesses must file this form and Form W-3 for all employees for whom they withheld Medicare, Social Security, and income taxes.

Sending the paper version of Form W-3 is optional if you e-file Form W-2 because the SSA fills out the form for you using the information you provided in the electronic submission.

Filing Form W-2 is also mandatory for each employee that claims one or more withholding allowances or exemptions on Form W-4. Employers that want to file Form W-2 directly through the SSA website must have a BSO account.

Information Employees Should Receive Before Getting An Online W-2 Form From Their Employer

Besides following the filing procedures when submitting these forms to tax authorities, employers must also comply with the rules for electronically issuing Form W-2 to their employees.

The employer must obtain the employee’s consent to issue the digital version of Form W-2 and provide the form on paper if the employee refuses to consent.

It’s important to note that the employee’s consent has a limited duration that depends on the agreement between the employer and the employee. Let’s look at other responsibilities employers must meet before sending Form W-2 in digital form to their employees:

• Businesses must inform employees about hardware and software requirements for accessing Form W-2 online. The employee must receive instructions on accessing and downloading the form from the employer.
• The employee must be aware of the procedures to withdraw their consent to receive Form W-2 online.
• The employer is responsible for revealing the conditions under which they don’t have to issue a digital or paper version of the form.
• All employees must be informed if the employer’s contact information changes.
• Employers should inform employees that the withdrawal of consent to receive Form W-2 online doesn’t apply retroactively.
• The employer is responsible for presenting procedures employees must follow to change their contact information. The employer can only issue an online Form W-2 with the correct employee contact information.

Sending Copies to the Right Recipients

Form W-2 is a multi-part form comprised of six copies an employer must send to SSA, state or local tax authorities, and employees.

• Social Security Administration should receive Copy A of Form W-2
• An employer must send Copy 1 of Form W-2 to state, city, or local tax agencies
• Copy 2 of Form W-2 is also for state, city, or local tax agencies
• Employees use Copy B of Form W-2 to file taxes
• An employee should keep the form’s Copy C for their financial records
• The employer retains Copy D of Form W-2 for their financial records

Employers that want to submit W-2s on paper can order the form on the IRS website, but ordering more than a hundred forms isn’t possible. However, you don’t need to do this if you file Form W-2 electronically, as the SSA’s BSO gives you access to this form.

Submitting Form W-2 to the SSA online is free, so you won’t have to pay fees or use third-party software to file W-2s for your employees.

Filing From W-2 Electronically On SSA Website

The online filing process is straightforward, especially if you already have a BSO account.

You’ll have to provide personal and contact information, such as your full name, date of birth, or home address, and set up the password to create a BSO account. Afterward, you can log in to your account and complete Form W-2.

Using the Wage File Upload option, BSO lets businesses upload files with compatible payroll software. Here’s a step-by-step guide through the W-2 e-filing process.

• Step 1: Choose the Business Services Option from the Menu on the SSA’s homepage. Log in to your BSO account once the Business Services page loads.
• Step 2: Click the Report Wages to Social Security link in the BSO Main Menu. The Wage Reporting Attestation page will open after you click on the link. Read the User Certification for Electronic Wage Reporting and Privacy Act Statement before clicking Accept.
• Step 3: Choose the Create/Resume Forms W-2/W-3 option on the Electronic Wage Reporting page. The maximum number of unsubmitted forms per account is limited to fifty.
• Step 4: Click Start a New Report and provide the information on the Before You Create Your Form(s) W-2/W-3 page. You’ll be asked to indicate the tax year, for whom you’re filing, EIN, and the Form W-2 type. Make sure that none of the exceptions apply to your situation before clicking the Continue button.
• Step 5: Insert all requested employer information. You must enter the employer’s name, EIN, and address details. Afterward, you must specify the contact person for the submission and employer and choose the option that best applies to your business in the Kind of Payer and Kind of Employer sections.
• Step 6: Go to the Enter W-2 Information page. Enter the employee’s personal information and the required withholding information. Review Form W-3 information when done and click the Continue button.
• Step 7: You’ll be taken to the Print Unsubmitted Form(s) W-2/W-3 page. Click on the PDF file in the Your Unsubmitted Copy section of the screen if you want to print the document. Click Continue to complete the submission.
• Step 8: Check the I DQTV, test, read and agree with the above checkbox on the Sign and Submit page and then click the Submit the Wage Report button at the bottom.
• Step 9: The system will generate the confirmation receipt and ask you to print it for your financial records. You can also save Form(s) W-2/W-3 as PDF files.

Using Third-Party Software to File Form W-2 Online 

Employers don’t have to file W-2s with the SSA’s BSO because they can use tax software instead. H&R Block and TurboTax software allow you to prepare Form W-2 for SSA and your employees if you purchase their Business subscriptions.

E-filing Form W-2 with third-party software doesn’t take much time because you can select the form from the software’s main menu in most cases.

E-filing Form W-2 with tax software is similar to submitting this form with BSO on the SSA website since you’ll have to provide the same information. The service provider will submit your W-2s to the SSA after you prepare them and inform you about their status.

Frequently Asked Questions

Taking Advantage of the Simplified W-2 Filing Process

Besides making it easier to meet the filing deadlines, submitting Form W-2 to SSA also reduces the waiting time allowing your employees to access their withholding information latest by January 31.

Businesses with ten or more employees will have to file this form electronically in the 2023 tax year due to the changes in the electronic filing requirements.

The BSO tool on the SSA website simplifies the online filing process. It allows small business owners affected by these changes to smoothly transition to submitting their W-2s to the IRS electronically.

Switching to online W-2s will reduce the pressure of managing and filing paper versions of these forms and eliminate the costs of sending these forms to tax agencies and the company’s employees.