(Tax Year 2024 – Filed in 2025)
Overview
Form W-2, Wage and Tax Statement, is one of the most important tax documents for employees and employers. But did you know that each W-2 includes multiple copies, each designated for a specific recipient or purpose?
Under IRC § 6051 and Treasury Regulation § 31.6051-1, employers must issue W-2 forms with six distinct copies, each labeled for its intended use. Failing to distribute or file the right copies can lead to IRS penalties and state-level compliance issues.
Breakdown: All Copies of the W-2 Form
Here are the six standard copies of Form W-2 and who gets each one:
| Copy | Who Receives It | Purpose |
|---|---|---|
| Copy A | Social Security Administration (SSA) | Used by SSA to track wages and calculate Social Security/Medicare benefits. |
| Copy B | Employee | Attached to the employee’s federal income tax return (if filing by mail). |
| Copy C | Employee | For employee’s records; used to verify income and taxes withheld. |
| Copy D | Employer | For employer’s records; must be retained for at least four years. |
| Copy 1 | State/City/Local Tax Department | Filed with the employee’s state or local tax return (if required). |
| Copy 2 | Employee | To be attached to the employee’s state or local income tax return. |
Visual Example: How a W-2 Is Used
Scenario:
Sam is employed in California.
- He files his federal tax return using Copy B.
- He attaches Copy 2 to his California state tax return.
- He keeps Copy C for his personal records.
- His employer files Copy A with the SSA, keeps Copy D, and sends Copy 1 to the California Franchise Tax Board.
What Happens If You File the Wrong Copy?
- Filing the wrong copy with the IRS (e.g., submitting Copy C instead of B) may delay processing.
- Always follow the label instructions on the bottom left of the form.
- Keep at least Copy C permanently for your own records.
Employer Filing Obligations
Employers must:
- Send Copy A to the SSA (with Form W-3 as a summary).
- Distribute Copies B, C, and 2 to employees by January 31, 2025.
- Retain Copy D in their records.
- File Copy 1 with the applicable state or local agency (if required).
Failing to file Copy A or submit late can result in penalties under IRC § 6721 and § 6722, starting at $60 per form.
Step-by-Step: What You Should Do With Each W-2 Copy
For Employees:
- Copy B – Attach to your federal tax return (if mailing Form 1040).
- Copy C – Keep for personal records (income verification, loan applications, etc.).
- Copy 2 – Submit with your state/local return if required.
For Employers:
- Copy A – Submit to SSA with Form W-3 by Jan 31, 2025.
- Copy D – Retain for internal records.
- Copy 1 – Send to applicable state/local agency.
Conclusion
Each copy of the W-2 has a specific role in tax reporting. Employees must keep their copies organized for both filing and personal documentation, while employers must ensure they distribute and file each one accurately and on time.
Call to Action
Unsure which W-2 copies to submit or keep? Schedule a session with Anshul Goyal, CPA EA FCA. Whether you’re an employee, business owner, or payroll manager, Anshul can help ensure you’re compliant with IRS and state tax regulations.
Top 5 FAQs: W-2 Copies
Do I need to file all W-2 copies with my taxes?
No. Only Copy B (for federal) and Copy 2 (for state/local) are submitted. Keep Copy C for your records.
What if I lose one of the copies?
Ask your employer for a reprint or digital version. Do not guess numbers from memory.
Can I use Copy C to file my taxes?
No. Use Copy B for federal and Copy 2 for state filing.
How long should I keep my W-2 copies?
At least three years, but ideally longer, especially if applying for loans or mortgages.
What is Copy A used for?
It is sent by the employer to the Social Security Administration and is not handled by employees.
About Our CPA
Anshul Goyal, CPA EA FCA is a U.S.-licensed Certified Public Accountant and Enrolled Agent admitted to practice before the IRS. He specializes in payroll compliance, W-2 reporting, tax filings, and cross-border taxation. Anshul advises American businesses and Indian individuals in the U.S. on IRS obligations and best practices.
Schedule a meeting with Anshul by clicking here: https://calendly.com/anshulcpa/
Disclaimer
This blog is for informational purposes only and should not be construed as legal or tax advice. For professional guidance, consult a licensed tax expert.