What Has Changed On The 2020 W-2 

What Has Changed On The 2020 W-2

Nov 10, 2020

What Has Changed On The 2020 W-2

 Instructions For Reporting Deferred Social Security Tax The IRS has issued instructions for reporting deferred Social Security Taxes for employees using Form W-2 and W-2C.

Instructions For Reporting Deferred Social Security Tax

The IRS has issued instructions for reporting deferred Social Security Taxes for employees using Form W-2 and W-2C.


Reporting Deferred Social Security Taxes

If you deferred the employee portion of Social Security tax under Notice 2020-65, when reporting total Social Security wages paid to an employee on Form W-2, Wage and Tax Statement, include any wages for which you deferred withholding and payment of employee Social Security tax in box 3 (Social security wages) and/or box 7 (Social security tips). However, do not include in box 4 (Social security tax withheld) any amount of deferred employee Social Security tax that has not been withheld. 

Reporting Deferred Social Security Taxes Withheld in 2021 

Treasury and the IRS issued Notice 2020-65 on August 28, 2020. The Notice allows employers the option to defer the employee portion of Social Security tax from September 1, 2020 through December 31, 2020. To pay the deferred amount of the employee portion of Social Security tax, the employer will withhold the amount of Social Security tax deferred from the employees' paychecks from January 1, 2021 through April 30, 2021.

Employee Social Security tax deferred in 2020 that is withheld in 2021 and was not reported on the 2020 Form W-2 should be reported in box 4 (Social security tax withheld) on Form W-2c. On Form W-2c, employers should enter tax year 2020 in box c and adjust the amount previously reported in box 4 of the Form W-2 to include the deferred amounts that were withheld in 2021. All Forms W-2c should be filed with SSA, along with Form W-3c, Transmittal of Corrected Wage and Tax Statements, as soon as possible after you have finished withholding the deferred amounts. See the 2021 General Instructions for Forms W-2 and W-3 (to be published in January 2021) for more information. 


How Can W-2 Changes Affect Your Company?

It’s important to know what changes have been made to the W-2 filing process. Not complying with changes can lead to file rejections, delays for delivery of employee copies, and added costs of reprinting corrected W-2s and refiling Federal and State copies.


W-2 Security Changes

Due to security concerns the SSA now allows employers to truncate the social security numbers on employee W-2 copies. W-2s have been stolen from mailboxes, out of vehicles, and shared residencies. Truncating employee W-2s is a way to eliminate the ability of these thieves to file false information and claim refunds.

Employers may not truncate the SSN on copy A which is sent to the SSA.


Change Made Due To The Military Spouse Residency Relief Act

Due to a change to the MSRRA civilian spouses of service-members can elect to use the same residence for purposes of taxation as the service-member. Information is available at https://download.militaryonesource.mil/12038/MOS/Misc%20Files/MilSpouseResReliefAct.pdf

There has been a clarification on code P reporting in Box 12 of the W-2. Employers should only report moving expenses reimbursements paid directly to a member of the U.S. Armed Forces who moves per a military order and incident to a permanent change of station, which are excludable under section 132(g) of the Internal Revenue Code.


Change Made For Employers Subject to The Railroad Retirement Tax  

Awards compensating employees for lost wages are subject to Railroad Retirement Tax. The U.S. Supreme Court ruled that award payments to employees to compensate for working time lost due to an on-the-job injury is taxable “compensation” under the Railroad Retirement Tax Act (RRTA). If you are a railroad employer, you must withhold Tier 1 and Tier 2 taxes when you pay such awards to employees covered by the RRTA. 


Information Regarding Changes Related to Disaster Tax Relief

Disaster tax relief. Disaster tax relief is available for those affected by recent disasters. For more information about disaster relief, go to https://www.irs.gov/newsroom/tax-relief-in-disaster-situations


Penalties Have Increase For Failure To Comply With W-2 Filing Requirements

According to the IRS W-2 Instructions For 2020:

Failure to file correct information returns by the due date. 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. The penalty applies if you: 

• 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, or 

• Fail to file paper Forms W-2 that are machine readable. 

The amount of the penalty is based on when you file the correct Form W-2. Penalties are indexed for inflation. The penalty amounts shown below apply to filings due after December 31, 2020. 

The penalty is: 

• $50 per Form W-2 if you correctly file within 30 days of the due date; the maximum penalty is $565,000 per year ($197,500 for small businesses, defined in Small businesses). 

• $110 per Form W-2 if you correctly file more than 30 days after the due date but by August 1; the maximum penalty is $1,696,000 per year ($565,000 for small businesses). 

• $280 per Form W-2 if you file after August 1, do not file corrections, or do not file required Forms W-2; the maximum penalty is $3,392,000 per year ($1,130,500 for small businesses).


For more information the complete instructions for the 2020 W-2 are available at: https://www.irs.gov/pub/irs-pdf/iw2w3.pdf


Aatrix Software is a leading provider of payroll tax reporting and single-point eFiling services. Over 300,000 businesses use Aatrix for payroll reporting in the US and Canada and processes millions of W-2s annually.


Our customers say it best!


“Aatrix is very easy to use and takes the pressure out of eFiling and using the correct forms. I remember when the social security number was moved a few years ago on the W2. It didn't matter that I didn't know before filing because Aatrix already had the correct form in the correct format!” 

Frank's Piggly Wiggly


For more information go to: https://www.aatrix.com/efile/

Category List

Tag List

I-9 (2)
Technology (3)
Company Of The Year (1)
independent contractors (1)
Improvements (1)
Compliance (5)
cyber attacks (1)
941-X (1)
1094-C (2)
minimum wage (3)
Aatrix (6)
Standard Mileage Rate (1)
Paycheck Protection Program (1)
Payroll (20)
1099 (11)
w-4 (2)
State Payroll Reports (3)
Certified Payroll Reports (1)
Venmo (1)
Payroll Reports (18)
CIO (3)
Medical Leave (1)
Quarterly Reports (1)
unemployment (6)
Review (2)
Payroll Taxes (5)
SSA Notice (2)
Payroll Tax Relief (1)
Human Resource (1)
Payroll Tax Forms (5)
Travel Expenses (1)
IRS Form 941 Changes (2)
eFile (6)
Tax Identification Number (2)
Top 50 (1)
eFiling Thresholds (2)
SSA (2)
941 (6)
Aatrix Software, Inc. (5)
Employee Travel (1)
Fraud (2)
CP2100 (3)
Biometrics (1)
IRS Form 7200 (1)
employees (1)
payroll reporting changes (2)
Payroll Solution (6)
Payroll Tax Reporting (10)
Secure eFiling (2)
Payments (1)
1095-B (4)
Form 941 (1)
Safe eFiling (1)
Payroll Tax Rates (1)
Sage Solutions Provider (1)
Reports (1)
New Logo (1)
CV Technology Innovator Awards (1)
Forms (1)
Sage (1)
Innovation (2)
1099-MISC (3)
SUI (1)
Gig Economy (1)
940 (1)
employee retention (4)
Medicare Tax (1)
Families First Coronavirus Response Act (1)
ACA Reporting (5)
SOC2 (4)
1095 (6)
American Rescue Plan (1)
Paypal (1)
TIN Matching (4)
IRS Form 1099 (3)
Accounting Solutions Provider (2)
Labor Shortage (1)
OEM Payroll (2)
Helpful Hints (1)
Sage Solutions (1)
Sage Summit (2)
Aatrix Software (9)
HR (1)
Employee Tax Credits (1)
eFiling (3)
work from home (1)
Ultimate Payroll (1)
CV Magazine (1)
Windows (3)
HFSA (1)
Federal Payroll Reports (2)
Sage Summit 2014 (1)
Social Security Number Verification (3)
remote office (2)
interest rates (1)
workplace dynamics (2)
Aatrix eFile (9)
IRS Form W-3C (1)
Growth (1)
W-2 (12)
Infrastructure (1)
Social Security Withholding (3)
Student Loan Relief (1)
Web Forms (1)
Taxes (2)
Assessment (4)
Tax Free (1)
SUTA (1)
Enterprise (2)
Staff (1)
IRS 7200 Tax Form (1)
CA Pay Data Report (1)
Small Business (2)
IRS (5)
EEO-1 (3)
Tax Return (2)
Tax (2)
1099 NEC (7)
ACA 1095 C&B requirements (3)
IRS 1099 NEC Form (2)
Awards (1)
Penalties & Fines (1)
Paycard (1)
Sage 300 CRE (1)
IRS Form W-2 (6)
COVID-19 (8)
Payroll Tax (4)
Sponsorship (1)
IRS Form 941 (3)
IRS Forms (1)
Employee Documentation (1)
1099 G (1)
IRS Notice (2)
Tax Identification Number Verification (2)
Top Software (1)
Corrections (2)
Social Security Wage Base (2)
Payroll Software (7)
Withholding (5)
Solutions (2)
1099-K (4)
1094-B (2)
Year-End Deadlines (2)
e-Filing (1)
IRS Tax Forms (2)
SMBs (1)
HSA (1)
Travel During Covid (1)
IRS Form 941 & 940 changes (3)
Employee Benefits (1)
Child Tax Credit (2)
1095-C (4)
Tax Payments (1)
Federal Taxes (1)
ACA Compliance (3)
Mac (1)
Federal (1)
Inflation (1)
Electronic W-2 (1)
The Families First Coronavirus Response Act (1)
State (1)
e-File (1)
ACA (8)
TIN Matching Services (4)
Social Security Tax Deferral (1)
Filing (1)
covid (2)
Deposit Schedule (1)
B-Notice (2)
Affordable Care Act (3)
Payroll Reporting (14)
Economic Security Act (1)
1099-G (5)
Accountant Shortage (1)
1099 TIN Matching (6)
TUG (1)
Sick Leave (2)
IRS Notice 931 (1)
irstaxtip (1)
PTO Payout (1)
overtime (1)
Paid Leave (1)
Employee Retention Credit (2)
CIO Review (3)
Per Diem (1)
Security (6)
Accounting Solutions (2)
Top 100 (2)
IRS Form 1099 NEC (3)
ACA eFiling (4)
Retirement Contribution Limits (1)
IRS 941 Form (2)
Dependent Care (1)
Solution (3)
2020 IRS Form W-2 (2)
Coronavirus (2)
Workplace Efficiencies (1)
Reporting (1)
Rebranding (1)
Payroll Compliance (4)
Paycheck (2)
FMLA (1)
New Hire Reporting (3)
Initiatives (1)
Future (1)
Coronavirus Aid (2)
Payroll Tax Notice (2)
Recruiting & Retention (4)
Virtual Currency (1)
Business Travel (1)
Technology Companies (2)
ACA e-filing (3)
Cryptocurrency (2)
Sage Summit 2015 (1)
Top 10 (3)
Cloud (1)
SOC3 (2)
FUTA (1)
IRS 7200 Form (1)
vaccine (2)
Millennials (2)
1099-INT (2)
1099-PATR (2)

Tag Cloud

unemploymentMillennialsReports1099 TIN MatchingAatrix SoftwarePayroll SolutionFUTASage 300 CRESocial Security Tax DeferralSocial Security Wage BaseSmall BusinessSocial Security WithholdingSecure eFilingPenalties & FinesSSAPayrollTechnologyCoronavirus AidGrowthSSA Notice1099-GW-2Electronic W-2CA Pay Data ReportTechnology Companieswork from homeIRS Notice1099-PATRSecurityAwardsIRS FormsFederalw-4CoronavirusAffordable Care ActIRS Form W-2TaxWindowsIRS Form W-3CIRS Form 1099 NECSUTACompany Of The YearPaycheck Protection ProgramTop 50SolutionHuman ResourceCertified Payroll ReportsVenmoCloudIRSEmployee DocumentationSponsorshipBiometricsSage Solutions ProviderCorrectionseFilingSage SolutionsFuture1099FormseFiling ThresholdsPTO PayoutVirtual CurrencyCV MagazineBusiness TravelRebrandingFamilies First Coronavirus Response Act1099-KirstaxtipForm 941Sage SummitAccounting Solutionse-FilingACA ComplianceTax Identification Number940IRS 7200 Form1094-CEmployee Retention CreditEnterpriseReviewHelpful HintsSocial Security Number VerificationB-NoticecovidACA 1095 C&B requirementsWeb FormsHRNew LogoSage Summit 2014CIO ReviewTax PaymentsMedicare TaxPaymentsvaccineIRS Form 941 ChangesIRS 7200 Tax Formpayroll reporting changesACA ReportingTravel During CovidCIOSMBsInnovationremote officePayroll SoftwareCryptocurrencyTIN MatchingFMLASOC3COVID-19IRS Notice 931StateHFSAACAHSAPayroll TaxSOC2ReportingGig EconomyMedical Leave2020 IRS Form W-2Federal TaxesStaffPer DiemEFTPSIRS Form 941Payroll Tax RatesSUIEconomic Security ActIRS Tax FormsWithholdingUltimate PayrollPayroll Tax Relief1099-INT1094-BYear-End DeadlinesACA eFilingTaxesTax Identification Number VerificationInflationTUGStandard Mileage Rateindependent contractorsPayroll Tax FormsState Payroll Reportsovertimee-FilePaycardTop 100New Hire ReportingAssessmentTop 10Employee TravelRetirement Contribution LimitsHIPAAPayroll TaxesMac1095-CInitiativesChild Tax CreditImprovementsAmerican Rescue Plan1099 GPaycheck941-XAccountant ShortageLabor ShortageFilingTax ReturnInfrastructureComplianceAatrix Software, Inc.Travel ExpensesRecruiting & RetentionSick LeaveAatrix eFileemployee retentionSageminimum wageIRS 1099 NEC FormCV Technology Innovator Awards1095workplace dynamicsDependent CareQuarterly ReportsTax Free1099 NECEmployee Tax CreditsIRS Form 7200Payroll ReportingPayroll Tax NoticeTop SoftwareIRS Form 1099interest ratesSage Summit 2015IRS 941 FormThe Families First Coronavirus Response ActEEO-1941IRS Form 941 & 940 changeseFileFraudAatrixI-9Payroll CompliancePayroll Tax Reporting1095-BPaid LeaveSolutionscyber attacks1099-MISCSafe eFilingWorkplace EfficienciesDeposit ScheduleCP2100Accounting Solutions ProviderStudent Loan ReliefOEM PayrollPaypalFederal Payroll ReportsPayroll ReportsACA e-filingemployeesTIN Matching ServicesEmployee Benefits