W-2 Form Correction: How to Do It & Why It Matters

A W-2 form correction refers to the rectification or amendment of any mistake or error in the information you have provided on your Wages and Taxes Statement. These errors include misspelled names, incorrect W-2 wages, or the wrong Social Security Number (SSN).

Knowing how to correct a W-2 form is a must because it outlines all wages you received and taxes you have paid for the year. That said, any discrepancies in your personal information and reported taxes and income could potentially trigger an IRS audit.

To help you avoid this, we’ll walk you through the most common types of W-2 form corrections and how you can amend these mistakes. Let’s begin!

Key Takeaways

• A W-2 form correction involves correcting any mistake on the taxpayer’s personal income and tax information declared on a previously issued Form W-2.
• Some of the most common errors on W-2 forms include missing or incorrect Social Security Number (SSN), miscalculated W-2 wages, and federal, state, or local income taxes.
• The IRS Form W-2c, Corrected Wage and Tax Statements, is used to correct errors made on previously issued W-2 Forms.

7 Common Mistakes on a W-2 Form

There are seven common mistakes that taxpayers often commit on their W-2 forms, and they include:

#1. Incorrect or Missing SSN (Social Security Number)

Inputting one or more incorrect digits in an employee’s SSN causes a mismatch in their W-2 form and Social Security card information. The Social Security Number is a crucial detail on an employee’s W-2 form because it serves as their identification as a taxpayer.

#2. Incorrect or Missing Employee Identification Number (EIN)

The failure to provide the correct Employee Identification Number on a worker’s Form W-2 can lead to penalties and problems when fulfilling Form 941, Employer’s Quarterly Federal Tax Return.

#3. Incorrect Employee or Employer Information

Inputting the wrong employee name on a Form W-2 often happens when the employee is recently married or divorced and has not yet updated their Form W-4.

Similarly, employers or employees may tend to use their old address if they recently moved to a new residence or changed their business location.

#4. Miscalculated W-2 Wages and Taxes

W-2 wages show an employee’s total income for the tax year that’s subject to federal taxation. Miscalculated W-2 wages could result in the wrong amount of tax withheld from employees’ earnings.

Reporting the wrong withheld amounts for income taxes will also leave employees underpaying or overpaying their taxes.

#5. Incorrect Employee Tax Information

The W-2 form correction that involves incorrect employee tax information could either be in the form of the wrong filing status, following the incorrect tax bracket, or the failure to apply any tax deductions or credits that the employee is qualified to claim.

#6. Excess Contributions

The IRS has contribution limits for health savings accounts and retirement plans, which employers should be careful not to exceed when calculating their employee’s voluntary contributions. Otherwise, they may have to fulfill Form 1099-R to correct the error.

#7. Formatting Mistakes

The typical formatting mistakes that taxpayers commit when filing their W-2 form include:

• Using unreadable fonts or filling out the form with big letters that hardly fit the boxes

• Including dollar signs when inputting values or money amounts on the form

• Rounding off the numbers when entering dollar amounts

• Using an ink color other than black when filling out Form W-2

How to Correct Your W-2 Form: Use a W-2c Form

There are specific steps to follow if you need to correct your W-2 form using Form W-2c, Corrected Wage and Tax Statements. The form is also used to fix mistakes incurred while filling out other variations of the W-2 form filed with the SSA (Social Security Administration), such as:

• W-2 (AS), American Samoa Wage and Tax Statement

• W-2 (GU), Guam Wage and Tax Statement

• W-2 (VI), U.S. Virgin Islands Wage and Tax Statement

The W-2c form contains most of the details that you would find on a W-2 form, including the boxes for federal, state, and local tax details, employer and employee names, Social Security Number, and Employee Identification Number.

Filling out the W-2c form depends on the kind of error that needs correction. Ideally, you must file a Form W-2c as soon as you notice that there are mistakes on your Form W-2.

When filing a W-2c form, you will also be required to submit a Form W-3c, Transmittal of Corrected Wage and Tax Statements. This is particularly true if you are filing the W-2c form with the SSA. The W-3c form summarizes all corrections and information on its accompanying Form W-2c.

You can e-file or paper file your Form W-2c and Form W3-c. However, if you are filing no less than 250 forms, you must choose electronic filing instead.

When Should You Use the W-2c Form?

You should use a W-2c form whenever you make specific errors or mistakes while filling out a Form W-2.

There are certain instances where using a W-2c form is the best course of action, such as when you incur the following errors on a Form W-2:

• Miscalculating tax withholdings and employee wages

• Inputting the wrong tax year, employee name, or Social Security number

• Failing to include your Federal Employer Identification Number (FEIN)

• Implementing W-2 form corrections on other variations of Form W-2

Keep in mind that if you notice a W-2 form correction after you have sent the Form W-2 to your employee but before you submit the said IRS document to the SSA, you need not secure a Form W-2c.

Not all W-2 form corrections require the use of the Corrected Wage and Tax Statements. For instance, you may have inputted the wrong address on your employee’s Form W-2 and you are wondering how to change the address on a W-2 form.

Instead of acquiring a W-2c form, you can issue a new W-2 form with the correct and updated address labeled REISSUED STATEMENT.

How to Fill out the W-2c Form

The key to filling out the W-2c form depends on the type of W-2 form correction you need to implement. On that note, we’ve explained the IRS’ specific instructions on how to file a corrected W-2 Form using a W-2c below:

Correcting the Wrong SSN or Employee Name

The W-2 form correction process for amending the wrong Social Security Number or employee name is to fill out Boxes a to i on the W-2c form. You don’t have to fill outBoxes 1 through 20.

Your employee should also correct their name or SSN on the Form W-2 that you previously issued to them.

In case the employee is issued a new social security card after their residential information or status that bore a different SSN or name was adjusted, the IRS advises filing a W-2c form just for the current year.

Correcting the Incorrect EIN or Tax Year

If the W-2 form correction involves an incorrect Employer Identification Number or tax year, file a single W-2c form. The W-2c form should show the wrong EIN or tax year. Next, you must reduce the originally reported money amounts or values to zero.

Once that’s settled, file another Form W-2c, but this time, the document should report the correct EIN or tax year. At the same time, the money amounts that were previously reduced to zero in the first W-2c should now be correctly specified.

Correcting Excess Contributions

Use the following steps based on the type of contributions that need amending:

1. Excess HSA contributions. Indicate the reduced amount or contributions in Box 12, Code W. You must contact the financial institution sponsoring the HSA and request to return the excess funds contributed to the employee’s account.

2. Excess FSA pretax contributions. For pretax FSA contributions, the excess amounts should also be refunded to the employee and reported in Boxes 1, 2, and 5 as taxable wages.

Correcting Excess Medicare or Social Security Withholding

Use Boxes 5 and 6 to correct withheld Medicare taxes, wages, and tips, and Box 12 to correct uncollected Social Security or Medicare taxes on tips or taxable group-term life insurance coverage costs that exceed $50,000.

5 Tips to Consider When Filling Out the W-2c Form

Incurring mistakes when preparing W-2 forms is not surprising, especially if you are issuing tax forms for several employees. Even employees or workers who receive multiple W-2 forms from different employers should be vigilant in identifying any mistakes on their tax documents.

Here are some expert tips to ensure a seamless process when implementing all the necessary W-2 form corrections:

#1. Use an Official W-2c Form

You can order official W-2c form copies online through the IRS website. Alternatively, you can purchase official tax forms from IRS-authorized e-file providers.

The Internal Revenue Service has an online database tool that lets businesses and individuals find any authorized providers near their area. Do not download and print the Copy A version of Form W-2c (or the form in red ink) from the IRS website.

Copy A is intended for informational purposes only and cannot be scanned or used to file tax returns, or else you may risk facing penalties. You must also know how to spot a fake W-2 to avoid acquiring falsified W-2 and W-2c forms.

#2. Take Note of the W-2 Form Correction

Before assessing how to change a W-2 form with a Corrected Wage and Tax Statement, make it a point to identify the W-2 form corrections that need updating. Check whether the W-2 correction process requires the use of a W-2c form or any other IRS document.

You save more time and effort by knowing the correct steps and forms to use to amend the mistakes on the W-2 form.

#3. Use Secure Online Tools

Aside from the authorized IRS form providers, there are also secure online tools that help you reduce errors when filling out W-2 forms. A good example of this is Paystub.org’s W-2 form generator, which uses a template that is similar to the official Form W-2.

Our generator has all the required fields ready for you to fill in, plus a built-in calculator to ensure you calculate income taxes and contributions more accurately.

Once you’re done filling in the template with all the necessary information, you can preview the document to verify the data before printing or downloading a copy.

#4. Double Check Your Employees’ Form W-4

If you prefer to refrain from incurring W-2 form corrections, you should consider conducting routine reviews of your employee’s W-4 forms.

The Form W-4 contains essential information such as your employees’ names, addresses, tax filing status, and Social Security Numbers.

In turn, employers use all the information declared on each of their staff’s W-4 forms to determine the correct federal, state, and local taxes to withhold from their salaries.

Employees are required to update their W-4 forms whenever a taxpayer has to change their personal information or reaches a significant change in their financial situation.

#5. Stay Updated With Changes to the IRS Regulations

The rules and regulations on implementing W-2 form corrections and using other tax forms are subject to change as the IRS may deem fit.

That said, it is your responsibility as a taxpayer to stay updated with any important announcements and news regarding the IRS’ tax filing instructions.

Staying well-informed about all relevant federal and state tax regulations enables you to fulfill your tax duties more efficiently and avoid falling for W-2 scams.

Final Thoughts

Incurring a W-2 form correction can be daunting and exasperating, considering the additional steps that you must take to rectify the errors. However, it is crucial to identify these mistakes as soon as possible and correct them accordingly.

The quicker you address and correct mistakes on a W-2 form, the less susceptible you become to possible penalties or investigations from the IRS.

When in doubt, you can use this article as your guide, particularly if the W-2 form errors you need to address require the use of a W-2c form. Alternatively, you also have the option of reading the specific guidelines on how to use each IRS form on the Internal Revenue Service website.

W-2 Form Correction FAQs

#1. How do I correct a mistake on my W-2 form?

To correct a mistake on your W-2 form, you must fill out Form W-2c, Corrected Wage, and Tax Statements. It is also advisable to submit a separate W-3c form for every year that needs any corrections.

#2. What is a corrected W-2 form?

A corrected W-2 form or W-2c form is an IRS document that taxpayers use to apply corrections to wage and tax information documents that have been previously issued but contain mistakes in the recipient’s information.

#3. How do I get a W-2c form?

Usually, you get a W-2c form from your employer if you commit an error while furnishing your W-2 form. You can also request that your employer provide a corrected W-2 form to ensure the necessary W-2 form corrections or fixes are reflected on your return.

#4. When is the deadline for filing a W-2c form?

There is no set deadline or due date for filing a W-2c form, but it is best to submit all the necessary corrections on your tax return as soon as possible. Doing so helps you avoid possible penalties and eliminates any discrepancies in your tax records.

#5. What should you do if you get a corrected W-2 form?

If you get a corrected W-2 or W-2c form, take the time to compare the values on your corrected Form W-2 with the original document and use the information on your W-2c form to file your taxes.

#6. Do I need to amend my tax return if I receive a W-2c form?

Yes, you may have to amend your tax return if you receive a W-2c form. File Form 1040-X, Amended U.S. Individual Income Tax Return, and apply all the necessary corrections to your tax liabilities, income and deductions, dependents, tax credits, and filing status.