Form W2 Minimum Amount to File for Employers and Employees

Are you wondering if you need to file an IRS Form W-2 this year? Here’s the minimum amount an employee has to earn for an employer to need to file a W-2.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

What is the minimum amount for an employer to file a W-2?

If you paid employees wages during the calendar year, you generally need to report all of their wages on a W-2. There is no minimum income that an employee has to earn before you issue a W-2. This is different from independent contractors, where you typically don’t need to issue 1099-NEC tax forms unless they earned $600 during the year.

For example, a new employee works one hour on December 31st at minimum wage. You still need to issue them a W-2 for that year by January 31st. You can read the IRS guidelines for Form W-2 here.

Don’t forget that you also need to file a W-3 for Social Security purposes at the same time.

What is the W2 minimum amount for an employee to file a tax return?

As an employee, you should always include your Form W-2(s) with your tax return when you file. If you file on paper, you usually place them behind your Form 1040. If you file electronically, this might include copying the information into an electronic form rather than attaching the actual form.

All of your wage income is potentially taxable, so you should include all of your W-2s when you file. It’s a widespread misconception that you can leave off W-2 forms if your annual wage from that employer is under $600 or some other amount. You can’t ignore wages under a certain amount, and the proper way to enter them is to include each W-2 separately.

What is the minimum income to file taxes?

In some cases, you may not be required to file income taxes. This is usually when your total income is less than the standard deduction. If you’re an independent contractor, the minimum income to file taxes can be as low as $400, because you to pay self-employment taxes in addition to federal income taxes.

Should I file a W-2 even if I don’t have to file a tax return?

Your W-2 is part of your tax return, so you wouldn’t be filing a W-2 without a tax return. However, you should save it just in case you get audited.

Even if you’re below the minimum income to need to file taxes, there may be other circumstances where you either want or need to file a tax return.

The most common times you may need to file a tax return even when you’re under the income threshold include:

  • You had tax withheld when you’re in the 0% tax bracket and want a tax refund. In future years, you may want to adjust your federal income tax withholding to have less money taken out of your paychecks.
  • You want to receive the Earned Income Tax Credit.
  • You received the Advanced Premium Tax Credit (Obamacare Subsidy) and are required to reconcile your income.
  • You need a current year tax return to recertify your income-based student loan payments

If you have any doubts about whether you have to file a tax return or if it’s in your best interests to do so, check with a tax pro at the beginning of tax season.

Conclusion

An employer has to give you a W-2 if you earned any amount of money with them. You may not need to file a tax return if you made less than the standard deduction, but there are situations where you’re required to. If you didn’t make a lot, there’s also a good chance you could get a refund if you had taxes withheld. The safest thing to do is to start your tax return for free to see if you need to file — it only takes a few minutes.

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