W2 Best Practices: Common Errors to Catch Before Filing

February 2nd is less than two weeks away! Here are the most common W-2 errors we see every tax season and how to catch them before filing.

Pre-Flight Check: Run These Reports NOW

1. Payroll Tax Proof AQ

• Compares payroll tax data against generated W-2s

• Identifies discrepancies before filing

• Run it today and again before you file
  
  

2. Get W-2 Info AQ

• Shows exactly what will appear on each W-2

• Your final validation before distribution

• Look for zeros, missing data, or unexpected amounts
  
  

Top 10 W-2 Errors (And Quick Fixes)

1. Incorrect State/Local Tax Setup - Fix starts in Admin Tools, not during W-2 generation. Verify state tax configuration now.

2. Missing/Incorrect Employee Addresses - SSA rejects W-2s for bad addresses. Run address validation today.

3. Wrong Social Security Numbers - #1 cause of SSA rejections. Cross-reference against I-9 documentation immediately.

4. Third-Party Sick Pay Not Coded - Box 12 Code J required. Verify TPA data is in your system.

5. Fringe Benefits Missing from Box 1 - Personal vehicle use, moving expenses, etc. must be included. Review your tracking.

6. 401(k) Missing from Box 12 - Verify Code D (deferrals) and Code DD (health coverage) map correctly.

7. Mismatched Federal vs. State Wages - Should match unless you have documented state-specific exclusions.

8. Missing SDI - CA, NJ, NY, RI require SDI reporting. Check your state-specific boxes.

9. Incorrect Medicare for High Earners - Over $200K triggers additional 0.9% tax. Verify Box 5 and Box 6.

10. Duplicate W-2s - Run employee sync error reports to catch duplicates from multiple assignments/rehires.
    
    

What's New for 2025 Tax Year?

• NO form changes (IRS transition relief for new legislation)

• Standard mileage rate: 70¢/mile (up from 67¢ in 2024)

• Social Security wage base: $176,100 (up from $168,600 in 2024)

• New requirement: Contact name, email, phone for electronic filing
  
  

The Greenshades Process

1. Generate Feed AND XML in Weekly Process (NOT just XML like ACA)

2. Launch Greenshades Tax Filing Center

3. Review employee data for accuracy

4. Submit electronic filing

5. Monitor for "Accepted" status (not "Acknowledged with Errors")
   
   

State-Specific Gotchas

• California: EDD-specific formatting required

• New York: Separate filing for NYC and Yonkers

• Pennsylvania: Local EIT reported separately

• Ohio: School district codes required
  
  

Your Action Plan THIS WEEK

✅ Run Payroll Tax Proof AQ and resolve discrepancies

✅ Verify all employee addresses

✅ Cross-check SSNs against I-9s

✅ Test W-2 generation in staging

✅ Register for SSA Business Services Online if not done

The best W-2 season is a boring one. Catch these errors now and you'll have smooth sailing through February 2nd.

Questions? What W-2 errors have tripped you up in the past? Let's help each other avoid them this year!