Legal Benefits Of W-2 Form For Employees

Discover Legal Benefits Of W-2 Form For Employees
January 21, 2023
Time to read: 3 Minutes
January 21, 2023
6 min read

When hiring new employees for your company, you have several alternatives. W-2 employees and 1099 contractors are the two most typical employment arrangements.

W-2 employees are entitled to legal protections such as minimum pay, overtime, and medical and family leave. They are also entitled to your benefits, such as health and dental insurance, frequently better than what they can buy on their own.

This guide will help you navigate the arrangements so you can understand what sort of worker is best for your company and how to guarantee your categorization is correct. We'll also go through the legal advantages of the W-2 form for employees.

Overview of the W-2 Form and Its Purpose

Legal Benefits Of W-2 Form For Employees

The W-2 form is an essential document for both employers and employees, providing detailed information about wages earned and taxes paid during a given tax year.

It serves as the basis of record keeping for employers regarding payroll liabilities while providing employees with proof of income to file their taxes accurately.


The W-2 form is required by law for all US taxpayers who receive wages from an employer. It includes information such as wages earned, federal income tax withheld, Social Security taxes paid, and any other deductions or withholdings.


What is a W-2 employee?

When you recruit an employee, whether part-time or full-time, they are known as W-2 workers since you will record their salaries and all compensation for the year on a Form W-2.

The W-2 form will also reflect any deductions you made from the employee's compensation. Your workers will then utilize this form to file their tax returns.

Benefits for Employers - Understanding Payroll Liabilities

For employers, a W-2 form is a valuable tool for understanding their payroll liabilities. The form provides employers with detailed information about how much money they have withheld from their employee’s wages and how much they are responsible for in taxes.

You may be interested: W-2 Form: Everything You Need To Know About Employer's Responsibilities  

It also helps employers ensure that they are paying the correct amount of Social Security, Medicare tax, and other payroll withholdings to the IRS. The W-2 form also helps employers identify any potential errors or discrepancies in their payroll processes.

Benefits for Employees - Accurate Tax Filing

For employees, the W-2 form is essential in filing their taxes accurately.

Without the W-2 form, it would be difficult for employees to know exactly what income has been reported to the IRS and how much tax they owe. The form also provides a way for employees to double-check that their employers are withholding the correct amount of taxes from their paychecks.

How to Ensure Accuracy When Completing a W-2 Form

To ensure accuracy when completing a W-2 form, employers should review the information provided by their employees to make sure it matches what is reported on their pay stubs. They should also double-check that all of the forms are properly filled out with no errors or omissions.


Additionally, employers should take the time to review the federal and state withholding requirements before filing a W-2 form with the IRS.

What to Do if You Receive an Incorrect or Incomplete W-2 Form

If you receive an incorrect or incomplete W-2 form, it is important to contact your employer immediately. Your employer must issue a corrected version of the form and send it to both you and the IRS. In some cases, you may be entitled to additional tax refunds or credits as a result of the corrected form.

Final Thoughts on the Legal Benefits of the W-2 Form


The legal benefits of completing and filing W-2 forms are essential for employers and employees alike. It is important that employers and employees understand the tax requirements and take the time to review their forms to ensure accuracy.


Additionally, it is important for employees to contact their employer immediately if they receive an incorrect or incomplete W-2 form so that it can be corrected and filed with the IRS in a timely manner. By taking these steps, both employers and employees can enjoy the legal benefits of filing accurate W-2 forms.