Glossary
Payroll

W‑2

By: Alec Hollingsworth
Updated:  
June 16, 2025

DEFINITION:

A W-2 is a tax form employers provide to employees, detailing annual wages and withheld taxes for tax filing purposes.
A W-2 is an official IRS tax form that employers in the United States are required to provide annually to each employee. This form reports an employee’s total wages, tips, and other compensation, as well as the amount of federal, state, and other taxes withheld from their paycheck during the year. Nonprofits, like all employers, must issue W-2s to staff members who receive salaries or wages. The W-2 is essential for employees to accurately file their personal income taxes and for the IRS to verify earnings and withholdings. Employers must distribute W-2s to employees by January 31 of each year and file copies with the Social Security Administration.

Key Takeaways

  • W-2s report annual wages and tax withholdings
  • Employers must provide W-2s to employees by January 31
  • Essential for employee tax filing and IRS compliance

Why It Matters

W-2 forms ensure compliance with tax laws and help employees file accurate tax returns.

Real World Example

A small nonprofit hires three full-time employees to manage outreach programs. At the end of the year, the organization’s bookkeeper uses payroll records to complete W-2 forms for each employee, detailing their total wages and tax withholdings. By January 31, the nonprofit distributes these W-2s to its staff and submits copies to the Social Security Administration as required by law. The employees then use their W-2s to accurately file their personal income taxes, while the nonprofit demonstrates compliance with tax regulations, avoiding penalties.

How Aplos Helps

Aplos helps nonprofit organizations manage payroll efficiently, including tracking employee compensation and withholdings needed for accurate W-2 reporting. With Aplos, you can ensure proper documentation and timely distribution of W-2s, reducing the risk of errors or penalties.
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Frequently Asked Questions

Who receives a W-2 form?

Employees who receive wages or salaries from an employer receive a W-2. Independent contractors do not; they receive a 1099 form instead.

When are W-2s due to employees?

Employers must provide W-2 forms to employees by January 31 of each year for the previous tax year.

What information is on a W-2?

A W-2 includes total annual wages, tips, and compensation, as well as federal, state, and other tax withholdings for the year.

How does Aplos help with W-2 compliance?

Aplos streamlines payroll management, making it easier to track compensation and withholdings needed to prepare and issue accurate W-2 forms.

What happens if a W-2 is issued late?

Late W-2s can lead to IRS penalties for the employer and may delay employees’ ability to file their taxes.

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