Employers who fail to file a correct Form W-2 by the due date are subject to the following penalty, which is based on when a correct Form W-2 is filed:
(1) $30 per Form W-2 if correctly filed within 30 days after the due date (by March 30 if the due date is February 28), up to a maximum of $250,000 a year ($75,000 for certain small businesses);
(2) $60 per Form W-2 if correctly filed more than 30 days after the due date but by August 1, up to a maximum of $500,000 a year ($200,000 for small businesses); and
(3) $100 per Form W-2 if filed after August 1 or not filed, up to a maximum of $1,500,000 a year ($500,000 for small businesses).
Failure to file correctly means failure to include all information required to be shown on Form W-2, including:
* incorrect information,
* filing on paper when filing electronically is required,
* reporting an incorrect taxpayer identification number (TIN),
* failing to report a TIN, or
* failing to file paper Forms W-2 that are machine readable.
An inconsequential error or omission is not considered a failure to include correct information. However, errors and omissions relating to a TIN, a payee's surname, and money amounts are never considered inconsequential (Code Sec. 6721; Reg. §§301.6721-1(a)(2), 301.6721-1(c)).