Common W-2 processing questions

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Important information

Federal/state/local forms and tax tables are released with Accounting CS updates via CS Connect. We recommend that you periodically check for application updates, and take advantage of the following resources, to determine when the forms and tax tables will be available.

W-2 processing

Prior to processing

  • Employee List – Detailed. To verify that employee personal information is up to date, mark the Personal Information checkbox in the Regions to Include section.
  • Payroll Tax Summary – Detailed. To verify taxable wage and tax withholding information, select Current year (or Prior year, if applicable) as the period to process in the Date section.
  • Employee Earnings. To identify missing, duplicated, or invalid W-2 information, mark the Missing/Invalid W-2 information checkbox in the Regions to Include section.
  • W-2 Verification report. Use this report to verify W-2 information by box number for all or selected employees.

There are multiple ways to enter W-2 information for clients for whom you do not provide live payroll services.

Processing Form W-2

  1. Choose Actions > Process Payroll Tax Forms.
  2. Select W-2 from the drop-down list in the Form type field, select the form year, and then click the Refresh button. Use the filters in the Filter options section to filter the number of clients listed in the Form Selection section.
  3. For each client in the Form Selection section, mark the checkbox for the form types to print.

For step-by-step information about how to process W-2 forms, see the W-2 form processing workflow.

You can preview all available copies except Copy D and Copy D Summary.

Overrides remain indefinitely (quarter to quarter and year to year) until they are manually cleared.

  • You can clear overrides in the Employee Data and Client Data tabs of the Actions > Edit Payroll Tax Forms screen by using the buttons at the top of the tab.
    • Clear Override. Clears the override in the field in which your cursor is placed.
    • Clear All Overrides. Clears all overridden fields displayed on the active tab. (Overridden fields are displayed in red or with a red outline.)
  • You can clear form and employee overrides prior to previewing or printing the form by marking the Clear form overrides and Clear employee overrides checkboxes in the Actions > Process Payroll Tax Forms screen.
  1. Choose Actions > Edit Payroll Tax Forms.
  2. Select W-2 from the drop-down list in the Form type field, select the form year, and then click the Refresh button.
  3. In the Employee Data tab, mark the checkboxes for only the employees for whom you want to process (or re-process) W‑2 forms. You can right-click to select or deselect all employees.
  4. Click the Process Client Forms button on the toolbar or choose File > Process Client Forms.
  5. In the Process Client W-2 Forms dialog, specify the number of copies, the filing methods, and the print options for the forms and then click the Process Selected button.

To determine why the amounts are incorrect, try the following suggestions.

  • Print the Employee Earnings report and Payroll Tax Summary – Detailed report to verify that earnings are correct for the employee.
  • Print the Payroll Journal – Detailed report using the filtering fields in the Payroll tab of the Print Reports screen to look for voided, deleted, or reversed payroll checks. Make sure that none of the employees have a check that was voided, deleted, or reversed after they reached a tax limit, such as for FICA-SS.
  • Check to see if there are overridden amounts from the previous year that need to be cleared in the Employee Data tab of the Actions > Edit Payroll Tax Forms screen.
  1. Click the Print Options button.
  2. In the Filing Method Selection section, select Per client selection. Any other selection in this field is a global override for all clients.

    Print options dialog - Filing method selection

  3. Click OK to save your changes.
  4. In the Form Selection grid, you are now able to change the Filing Method selection on a per client basis. Note that the filing methods default to whatever is set up for the forms on the Payroll Taxes tab of the Setup > Clients screen.
  1. Choose Actions > Process Payroll Tax Forms.
  2. Use the filtering fields to view the appropriate W-2 information, and then click the Print Options button.
  3. In the Federal Client Copy Format section, select Copy D from the Copy A drop-down list.
  4. If you want to print the Copy D Summary instead of the W-3, select Copy D Summary from the W-3 drop-down list.

    Print options dialog - Select Copy D

  5. Click OK and process your forms.

Editing Form W-2 amounts and information

You may need to do one or more of the following:

  • Edit the employee's year-end taxable wages .
  • Adjust the employee's tax withheld amounts via the Actions > Enter Transactions screen.
    Amounts on Form W-2 flow from the payroll checks that are present in the Actions > Enter Transactions screen. If any of the tax withholdings were entered incorrectly on the payroll checks, the W-2 will reflect an incorrect amount. In the Actions > Enter Transactions screen:
    • If this is a handwritten check and liabilities have not been generated, simply correct the amounts.
    • If this is a printed check, or a handwritten check for which liabilities have been generated, you will need to delete and re-enter the check to correct the amounts.
    • If you need to move amounts from one tax to another, you can enter a new, zero amount net check with a negative amount to one tax and a positive amount to the correct tax.
  • Override the information in the Employee Data tab or Client Data tab of the Actions > Edit Payroll Tax Forms screen.
  • Verify that W-2 box information for the employee's payroll items is set up correctly in the Main tab of the Employee Payroll Item Settings dialog.
  • Verify that Box 12 and/or Box 14 codes and amounts are correct for employees.  If they are missing, follow these steps.
    1. Choose Setup > Employees and click the Personal tab.
    2. Select the employee and click Edit.
    3. In the W-2 Information section, click the Other W-2 Items button.
    4. In the Other W-2 Items dialog, enter the applicable Box 12 and 14 information.

    Note: Amounts entered for Boxes 12 and 14 using this method do not affect amounts on Form 940. If you need to adjust amounts on both Form W-2 and Form 940, use the W2 Additional Boxes section in the Setup > Payroll Items screen.

Here are some things to check if this happens.

  • Choose Setup > Payroll Items and ensure that the appropriate payroll items are selected for Box 14 for the payroll item that is listed incorrectly.
  • Choose Setup > Employees, click the Personal tab, and then click the Other W-2 Items button, and look for entries in the W-2 Box 14 Items grid.
  • Choose Setup > Clients, click the Payroll Taxes tab, and look for entries in the Box 14 column within the Taxes section.

See also

Displaying more than three Box 14 codes on a Form W-2 layout

Adding state/local specific information to Form W-2 box 14

The IRS specifies that individual taxpayer identification numbers (ITINs) should not be used on Form
W-2. ITINs begin with the number 9, and the fourth and fifth digits are in the range 70-88, 90-92, or 94-99. When the application identifies an SSN as an ITIN, it automatically prints "Applied For" in Box A of the Form W-2 and uses all zeroes in the internet file. See the Payroll tax forms display "Applied For" instead of a SSN for more information.

Try one or more of these potential solutions.

  • Verify that a birth date was entered for each employee before payroll checks were entered. This is necessary for the application to correctly calculate 401(k) limits and taxable wage amounts on the checks. If payroll checks were entered without a birth date entered for an employee, follow these steps:
    1. Choose Setup > Employees and click the Personal tab.
    2. Enter the employee's birthday in the Birth date field.
    3. Delete and re-enter the payroll checks for the employee to correctly calculate the 401(k) amounts, taxability, and limits.
  • If you choose not to delete and re-enter payroll checks for the employee, you can manually Adjust the employee's year-end taxable wages.
  • Verify that the Do not apply catch-up limit checkbox is not marked (if applicable) in the Payroll Item Settings dialog (accessed from the Ellipsis button in the Payroll Items tab of the Setup > Employees screen).

    See also:  Customizing settings for employee retirement catch-up contributions and limits

By default, the application doesn't display income tax information for states that do not have individual income tax. There is no way to force the W-2 to display zero amounts. The following states do not have income tax:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming

Layouts, variables, and display options

To go back to the original (default) form layout, choose File > Layout Designer, open the modified layout, and then choose File > Restore Default.

If you added a variable or changed something in the layout, be sure that you have also changed each copy of the layout. For example, if you added a Box 14 variable to the W-2 Copy A layout, you also need to add that variable to every other W-2 layout listed for that year to have the change affect all copies of the form.

In addition, make sure you did not add text variables and then attempt to print using the preprinted paper form options. By design, the preprinted filing method suppresses all text variables.

Please refer to the following table for the Layout Designer file names and their corresponding forms.

File name

W-2 or W-2c Copy

W2

4-up Copy B/C Blank Perforated and Blank Unperforated

W2AFAC

Copy A Blank Unperforated

W2COPY1

Copy 1 Blank Perforated and Blank Unperforated

W2COPYA

Copy A Preprinted

W2COPYBC

2-up Copy B/C Blank Perforated and Blank Unperforated

W2COPYB2C

3-up Copy B/2/C Blank Perforated and Blank Unperforated

W2COPYD

Copy D Blank Perforated, and Blank Unperforated

W2Ss

4-up Pressure Seal

W3

W-3 Preprinted

W3fac

W-3 Blank Unperforated

W2cAFAC

Corrected Copy A Blank

W2cCOPY1

Corrected Copy 1 Blank

W2cCOPYB

Corrected Copy B Blank

W2cCOPYC

Corrected Copy C Blank

W2cCOPYD

Corrected Copy D Blank

To avoid having to make the alignment adjustments that are often needed when you use preprinted laser forms, you may want to consider filing via electronic file submission for Federal Copy A or by printing black-and-white forms to unperforated paper and then generating facsimile forms from Accounting CS for all other copies.

To adjust the alignment of Form W-2 Copy A, you need to perform the following steps.

  1. Choose File > Layout Designer.
  2. In the Layout Designer, click the plus sign next to the W-2 forms folder to expand it, and then expand the folder for the specific year.
  3. Double-click the W2COPYA layout to open it.
  4. Adjust the alignment using either of the following methods.
    • To adjust the entire form, choose Edit > Select All (or press CTRL+A on your keyboard) and then use the directional arrows on your keyboard to adjust the document as needed.
    • To adjust the alignment of an individual field, click inside the field and then use the directional arrows on your keyboard to move the field to the desired location.
  5. Choose File >Save to save your changes.

Note: W2COPY represents the name of the form and A represents the copy of the form. This change will affect only Copy A. If you want to adjust the alignment for the other copies, you need to make the same adjustments to those copies — for example, to W2COPY1 or W2COPY2, etc. If you need to undo your modifications on the W-2 form and return to the original (default) form, choose File > Restore Default when the form is displayed.

The application accumulates localities in the order in which they are encountered during the processing of employee information. Therefore, the application doesn't necessarily print the localities with their associated state. 

At this time, Accounting CS does not support filing instructions for W-2 and W-3 forms. This is a suggestion in our Accounting CS Ideas Community. See Printing filing instructions for payroll tax forms for standard filing instructions other than W-2s.

Enable duplex printing of IRS instructions for employee W-2 forms by choosing Setup > Firm Information > Firm, clicking the Preferences tab, and then marking the Duplex printing of IRS instructions for employee W-2s checkbox in the Payroll Tax Forms section. When you print the employee copies, the instructions will be included on the back. See IRS instructions for W-2/1099 recipients to view or print the IRS W-2 instructions before printing.

At this time, Accounting CS does not support masking the employee SSN on any copy of the Form W-2. You can use an electronic method of delivering the employee copies of the W-2s as an alternative to mail.

The application prints a 2-D barcode on Copy C of the W-2 form so that wage data can be scanned directly into UltraTax/1040 using the UltraTax CS ® Bar Code Scan utility. This scanning utility is automatically installed with UltraTax CS and runs independently from UltraTax CS.

In addition, as of the 2010 tax year, all Copy A and W-3 forms contain a 2-D barcode that conforms to the Social Security Administration (SSA) specifications. However, if you want to exclude the 2-D barcode from the forms to improve the processing speed or to conserve print toner, you can mark the Exclude 2-D barcodes on Forms W-2/W-3 checkbox in the W-2 Print Options dialog.

When you have a filing method of "Internet" selected for your W-2 Copy A forms, the preview will display "Client Copy" on the forms because you are not paper filing the W-2 Copy A.

There are two ways to remove the client copy image from payroll tax forms.

  • Remove on a per client basis
    1. Choose Actions > Edit Payroll Tax Forms or Actions > Process Payroll Tax Forms and select the appropriate form type, year, etc.
    2. Select the forms and/or clients and forms that you want to process, as appropriate.
    3. Click the Process Selected button.
    4. In the Print dialog, make sure the Filing copy checkbox is marked and the Client copy checkbox is cleared.
    5. Click OK.
  • Remove globally for all client payroll tax forms.

    This process will disable the application's default behavior of printing a watermark on all client copy forms (forms for which the Client copy checkbox is marked in the Print dialog).

    1. Choose Setup > Firm Information > Firm and click the Preferences tab.
    2. In the Payroll Tax Forms section, mark the Disable watermark on client copy forms checkbox.
    3. Click OK.

    The client’s copy is always displayed when previewing a payroll tax form. Selecting to disable watermark on client copy form will remove the CLIENT COPY watermark from the preview screen.

This can occur in the following situations.

  • The employee has either two state withholdings and a local withholding or two local withholdings and a state withholding, and you are using the 4-up W-2 for the employee's copy. The application prints a second W-2 so that the employee will have enough copies to distribute to all taxing agencies when they file their tax returns.
  • The application prints additional W-2 copies when there are more Box 12 and Box 14 entries than can fit on a single form. For more information see Displaying more than three Box 14 codes on a Form W-2 layout.

For New Jersey employees: New Jersey requires that SDI, UI/WF/SWF, and NJ DI Plan Provider Number codes be listed first in Box 14, followed by any additional codes. In this case, regular Box 14 items will print beginning with the Code 4 variable on W-2 layouts.

In cases where a Form W-2 has multiple pages due to the number of Box 12 or 14 codes, for Copy 2, the application lists the federal amounts (Boxes 1 through 8) on each page, in case you do not plan to send every page of Copy 2 to the state or local agency. Copy A does not repeat the federal amount boxes, based on the assumption that (per federal W-2 rules) you will submit every page.

2-Up. Copy B and Copy C

3-Up. Copy B, Copy C, and Copy 2

4-Up. Copy B, Copy C, and 2 copies of Copy 2

4-Up Pressure Seal. Copy B, Copy C, and 2 copies of Copy 2

Although the Employee W-2, Copy 2 is unavailable in Accounting CS, it is possible to edit the W-2 layout to print them.

Once the changes below are complete, you will no longer be able to use the 3-up or 4-up layout for any client.

To request the Employee W-2, Copy 2 in a 2-up format be added to Accounting CS, join the Accounting CS Ideas Community, where you can share ideas with other users and provide feedback and suggestions to our development team. The scope, feasibility, and popularity of a suggestion will impact whether it will be implemented in a future release of Accounting CS. To learn more, see the Accounting CS Ideas Community topic.

  1. Choose File > Layout Designer and then open up the W-2 Forms and 2016 folders.
  2. Double-click the W2COPY2 layout to open it.
  3. Click a variable, and then press Control + A on the keyboard to select everything.
  4. Press Control + C to copy everything to the clipboard.
  5. Open either the W2COPYB2C or W2COPYBC layout.
  6. Delete everything on it (use the same method as step 3 above).
  7. Paste the Copy 2 items you copied above.
  8. Choose File > Page Setup and verify that the Recipients per page is 1.
  9. If you have Duplex printing of IRS instructions for employee W-2s checkbox marked in the Preferences tab of Firm setup and are using paper that includes the preprinted W-2 instructions, delete everything in the W2COPYB2C Instructions or W2COPYBC Instructions section of the layout.
  10. Save everything, and then process the 3-up or 4-up W-2s and it will print two copies of Copy 2 instead.

Other

  1. Choose Setup > Clients and click the Payroll Taxes tab.
  2. Select the client record and click Edit.
  3. In the Forms section, scroll down to the Federal W-2 section, select Employee Self-Service in the Filing Method column for the Employee Copy line item, and save your changes.
  4. Choose Actions > Process Payroll Tax Forms and then use the filtering fields to view Form W-2.
  5. Employee Self-Service will be the default selection in the Filing Method field for any client for whom you performed steps 1 through 4.
  6. When you are ready to process the forms, click the Process Selected button to immediately send the W-2s to Employee Self Service.

If you need to print the W-2s to paper and send them to Employee Self-Service, mark the Send to Employee Self Service checkbox in the Print Options dialog to avoid processing the W-2s multiple times.

See also: Employee Self-Service overview

W-3 Processing

  1. Open the Additional Information dialog by clicking the Additional Information button in one of the two following locations.
    • The Forms section (next to the Federal W-2 line item) of the Payroll Taxes tab in the Setup > Clients screen
    • The top of the Actions > Edit Payroll Tax Forms screen when the W-2 Form is selected
  2. Enter or select the appropriate information in each field.

The X in Box 15 indicates that wages are being reported for more than one state.

Per IRS instructions, the application combines state and local wages for any client with employees who are set up in more than one state or locality and it reports a single sum in the appropriate box.

Example

If there were $2,000.00 in Local1 taxable wages and $500.00 in Local2 taxable wages, Box 18 should show a total of $2,500.00 in wages.

  1. Open the Additional Information dialog by clicking the Additional Information button in one of the two following locations.
    • The Forms section (next to the Federal W-2 line item) of the Payroll Taxes tab in the Setup > Clients screen
    • The top of the Actions > Edit Payroll Tax Forms screen when the W-2 Form is selected
  2. Select something other than None from the drop-down menu in the Signature field.
  3. Mark the Suppress date checkbox.

The Form W-3 is not listed separately from the W-2 Copy A line item in the Process Internet/Magnetic Files screen because the Social Security Administration (SSA) indicates that the Internet file should contain both the Copy A and the W-3 information.

Internet filing

Accounting CS enables you to create the W-2 file to upload to the Social Security Administration (SSA). In the Actions > Process Payroll Tax Forms screen, change the filing method for the Copy A to Internet and then click the Process Selected button to add your client's data to a batch file. Follow these steps to verify the contents of the file.

  1. Choose Actions > Process Internet/Magnetic Files.
  2. Select the appropriate file and click the Preview Selected button.
  3. Click the Create Files button to create the file and store it in the file location listed at the bottom of the screen.
  4. Upload the file via the Social Security Administration's Business Services Online website at www.ssa.gov/bso/bsowelcome.htm.

For information about filing options for the W-2 Copy A, please visit the Social Security Administration website at www.ssa.gov/employer/. If you encounter errors while trying to use the SSA application, please contact the SSA for support.

Notes

  • To determine whether you must enroll or register to file electronically, please visit the SSA website.
  • The SSA no longer accepts file submissions via diskette. Please visit the SSA website to see other options available for submitting W-2 files.

The application uses the EFW2 file format per SSA requirements. For instructions on how to create these files, see W-2 form setup and processing.

We recommend that you verify that the data in your file is acceptable by using the SSA AccuWage Online application. You can access the application by pointing your internet browser to www.ssa.gov/employer/accuwage/ and following the instructions on the website.

The application can create W-2 files for all states that allow for them. In the Actions > Process Payroll Tax Forms screen, each state and/or locality that requires a Copy 1 is listed separately for each client. For each Copy 1, select the appropriate filing method, and then click the Process Selected button. Refer to the Payroll Form and Filing Information portlet on the Home dashboard for information about specific state and local payroll tax forms.

No, you will need to reprocess the W-2 forms in the Actions > Process Payroll Tax Forms screen for that client. If you are prompted to overwrite the existing file, do so. You can then access the updated file in the Manage Files dialog, accessed from the Actions > Process Internet/Magnetic Files screen.

When the Require internet/magnetic file creation from file preview checkbox is marked in the Preferences tab of the Setup > Firm Information > Firm screen, you will need to preview the files and then create them from the Preview screen.

There are a few possible answers to this question. See the Nothing appears in the Process Internet/Magnetic Files screen topic for detailed information.

There are a few possible answers to this question. See the Nothing appears in the Process Internet/Magnetic Files screen topic for detailed information.

Although Accounting CS allows you to maximize your efficiency by batch processing many clients at the same time, there is an easy way to select which clients to process Internet/Magnetic files for.

W-2 forms

  1. Perform the steps in the Processing W-2 forms for all employees of one or more clients section in the Printing W-2 forms topic.
  2. Choose Actions > Process Internet/Magnetic Files, and then click the plus sign next to Federal W-2 Copy A.
  3. Mark the checkboxes next to the clients for which to create a single file, and then click the Create Files button.

Accounting CS creates a folder in the location specified on the Process Internet/Magnetic Files screen for each time you perform these steps. The folder will be named "Batch File X" where X is the next batch number available.

The following are some solutions to error message that may display when you attempt to create the internet file.

  • You must enter an ID.
    1. Choose Actions > Process Internet/Magnetic Files.
    2. Click the Transmitter Information button.
    3. In the Federal W-2 section of the Transmitter Information dialog, enter the 8-digit ID provided by the Social Security Administration (SSA).
  • You must enter a Transmitter Contact Name, Phone, and/or Email.
    1. Choose Actions > Process Internet/Magnetic Files.
    2. Click the Transmitter Information button.
    3. In the General section of the Transmitter Information dialog, select a staff member from the File Contact drop-down list.
    4. If there are no entries in the drop-down list, close the dialog and choose Setup > Firm Information > Staff.

      Note: If you have an Alternate Preparer Block license and receive a prompt of “You must enter a Transmitter EIN” or “You must enter a Transmitter Name”, choose Setup > Firm Information > Firm and complete the Alternate Firm and Alternate EIN/SSN fields on the Main tab.

    5. Select a staff member who is a payroll form preparer and then click the Edit button.
    6. In the Preparer Information section, verify that the Payroll form preparer checkbox is marked, and the PTIN and Third party designee PIN (if applicable) are entered.
    7. In the Phone and Fax Numbers section, verify that there is a phone number entered in the Business field, and that there is an email address entered in the Email field. Add any missing information.
    8. Make the same changes for any other staff members that should be included in the list of payroll form preparers.
    9. Press Enter to save your changes.
    10. Choose Actions > Process Internet/Magnetic Files and then click the Transmitter Information button.
    11. In the General section, select the appropriate staff name, which should now display in the drop-down list.

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