Payroll Compliance | W-2
The year has to agree with the four quarters.
W-2s are prepared from payroll and reconciled against the quarterly returns before anything is filed, because a mismatch between the annual and quarterly numbers produces a notice months later. And unlike most filings, this one goes to your employees, so an error is a conversation with the whole workforce rather than a correction nobody sees.
What the system does
Capability, input, output.
| Capability | Input | Output |
|---|---|---|
| Annual to quarterly tie | W-2 totals and the quarterly returns | Reconciled before filing, since a mismatch produces a notice |
| Preparation | Payroll for the year | A W-2 per employee, with the totals traceable to the runs behind them |
| Pre-filing checks | The employee population | Missing or mismatched identifiers and undeliverable addresses, caught first |
| Non-payroll items | Fringe benefits and adjustments posted outside payroll | Flagged for inclusion, since these are what the annual total misses |
| Employee delivery | Prepared statements | Delivered and evidenced, with reissues tracked |
| State copies | States the employee worked in | Prepared alongside, since the state copy is a separate obligation |
| Corrections | An error found after filing | A corrected statement tracked against the original, both retained |
-
Annual to quarterly tie
- Input
- W-2 totals and the quarterly returns
- Output
- Reconciled before filing, since a mismatch produces a notice
-
Preparation
- Input
- Payroll for the year
- Output
- A W-2 per employee, with the totals traceable to the runs behind them
-
Pre-filing checks
- Input
- The employee population
- Output
- Missing or mismatched identifiers and undeliverable addresses, caught first
-
Non-payroll items
- Input
- Fringe benefits and adjustments posted outside payroll
- Output
- Flagged for inclusion, since these are what the annual total misses
-
Employee delivery
- Input
- Prepared statements
- Output
- Delivered and evidenced, with reissues tracked
-
State copies
- Input
- States the employee worked in
- Output
- Prepared alongside, since the state copy is a separate obligation
-
Corrections
- Input
- An error found after filing
- Output
- A corrected statement tracked against the original, both retained
W-2 Filing FAQ
What buyers ask.
Why does the annual to quarterly tie matter?
Because the agency compares them. If your four quarterly returns total something different from the W-2s you filed, that difference generates a notice, usually months later, and reconstructing why is worse than preventing it. It is a five-minute check before filing and a two-week investigation afterwards.
What causes a mismatch?
Almost always something that hit compensation without going through a payroll run: a fringe benefit posted at year end, a bonus paid through accounts payable, an adjustment booked directly to the ledger. Each is legitimate and each is invisible to a system that only reads payroll.
Our payroll provider issues W-2s. Is this duplicative?
For preparation, largely yes. For the reconciliation, no, and that is the part we do: comparing what the provider produced against the quarterly returns and the ledger, which are records they do not hold.
An employee says their W-2 is wrong. What happens?
A corrected statement is issued and tracked against the original, with both retained. The retention matters because the employee has already filed their own return using the first one, so what they received and when is a fact somebody will need.
What about employees who worked in several states?
Each state they worked in generally needs its copy, and multi-state employees are where this most often goes wrong. The work locations recorded during the year are what drive it, which is why keeping them current is a payroll task rather than an HR nicety.
See your W-2 totals reconcile to your quarters.
Connect your payroll and your books, free. The annual, the quarterly and the ledger are compared before anything goes.