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APA Reports on Key Forms W-2 and W-3 Requirements in SSA/IRS Reporter

BY: Alice P. Jacobsohn, Esq. | 08/19/20

The SSA/IRS Reporter, Spring 2020, contains an article written by APA on Forms W-2 and W-3. Key form requirements that payroll professionals need to know are highlighted, including truncating social security numbers (SSN), penalties, and extensions of filing time.

The APA article, “Key points about the 2020 Forms W-2, W-3, and instructions,” says that employers may now truncate the employee’s SSN on employee copies of Forms W-2. Employers may not truncate the employee’s SSN on Copy A filed with the Social Security Administration (SSA). To truncate on state copies (Copies 1 and 2), check state law requirements. To truncate where allowed, replace the first five digits of the nine-digit number with asterisks (*) or X’s. For example, an SSN of 987-56-1234 would appear on the employee copies as ***-**-1234 or XXX-XX-1234.

Penalty amounts are adjusted for inflation annually for failure to file correct information returns and to furnish correct payee statements for forms that are required to be filed or furnished. The penalties for forms filed after December 31, 2020, include: failure to file correct information returns, failure to furnish correct payee statements, and intentional disregard for Form W-2 filing requirements. These penalties can be significant.

Extensions of time to file Forms W-2 with the SSA are not automatic. Employers may request from the IRS one 30-day extension to file Forms W-2 by submitting a complete application using Form 8809, Application for Extension of Time to File Information Returns, indicating that at least one of the criteria on the form and instructions for granting an extension applies and by signing under penalties of perjury. The IRS will only grant the extension in extraordinary circumstances or catastrophe.

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Alice P. Jacobsohn, Esq., is Director of Government Relations for APA.