System updates

We’re experiencing issues that may affect your Square services. We’ll continue to update our status page with more information.

Home>Tax Payments & Filings

Understanding and Reviewing Form W-2

Square Payroll generates and files Form W-2 to each of your employees in January for the prior tax year. These forms are available in draft format all year under the Tax Forms tab of your Square Dashboard to give you time to review the forms for accuracy throughout the year.

Although Square Payroll files W-2s on your behalf, you and your employees are responsible for confirming and ensuring the information on W-2s is accurate. In addition, each of your employees is responsible for filing their own W-2 separately with the IRS. See the Square Payroll year-end information article for additional questions related to preparing for annual payroll tax filings.

1. Download your draft Form W-2s

To access your draft 2022 Form W-2s:

  1. Visit Payroll > Tax Forms in your Square Dashboard.

  2. Click the Generate Draft W-2s button and select the Year

  3. Click Download to download a .zip file of the draft Form W-2s.

  4. Extract the Form W-2s from the downloaded .zip file (read below for instructions on doing so on a Mac or Windows computer).

Note: If applicable for your account, Square Payroll will begin processing draft Form 1099-NECs for contractors on December 19, 2022.

To access your draft 2022 Form W-2s from December 19, 2022 to January 5, 2023:

  1. Visit Payroll > Tax Forms in your Square Dashboard.

  2. Click Download on the “Wage and Tax Statements” line item to download a .zip file of your Form W-2s.

  3. Extract the Form W-2s from the downloaded .zip file (read below for instructions on doing so on a Mac or Windows computer).

Note: Draft W-2s are available for review until January 5, 2023. You have until January 5, 2023 to make changes to your employees’ full names, SSNs, and home addresses before the Form W-2s are filed with the Social Security Administration (SSA).

Extract your Form W-2s from a .zip file on a Mac

On most Mac computers, you will find the .zip file containing your W-2s in your Downloads folder. To access the file, you can either open the Downloads folder directly or search in your finder for “W2.zip”. Once you locate the .zip file, double click on it. Your computer will automatically extract the data from the .zip file, creating a folder which contains PDF copies of your W-2s.

Extract your Form W-2s from a .zip file on Windows

The steps for extracting your .zip file depend on which version of Windows you are running. To locate the file, search for “W2.zip” or look for the file in the Downloads folder of My Computer. Follow the links for .zip extraction instructions onWindows 8 or 10.

2. Verify your draft Form W-2 data

You and your employees are responsible for ensuring that the information on Form W-2 is correct. The draft Form W-2s are available all year by going to Payroll > Tax Forms in your Square Dashboard. You will have until January 5, 2023 to review the draft forms for accuracy before they are filed and, if you opt into sending paper mail, mailed. We recommend reviewing the draft Form W-2s information periodically throughout the year. Changes to your employees’s information, business information, and processed payroll runs will be reflected immediately upon re-downloading the draft Form W-2s.

We know that Form W-2 can be a bit daunting to read. Below is additional information on the fields in Form W-2 that should be reviewed.

Employee Information

Employee’s information can be updated by going to Payroll >Payroll Team and clicking on their profile. Please check for these common errors:

  • Full Name: Check for misspelled names and avoid using nicknames or shortened name, titles before or after a name, and name changes not reported to the Social Security Administration (SSA).

  • Social Security Number (SSN): Check for incorrect or typo’d SSNs. SSNs can be viewed on the draft Form W-2s.

  • Home address: Ensure this reflects the employee’s current address. If you opt into paper mail, Square Payroll will mail your Form W-2 to this address.  

You can also learn more about Form W-2 information verification by visiting the SSA website.

Business Information

If the information in the Business Info or Tax Info tabs of your Square Payroll account. If you receive an error when trying to update your taxpayer information, contact our Support team. Changes to your taxpayer name and taxpayer numbers may require additional troubleshooting.

  • Taxpayer address

  • Federal Employer Identification Number (EIN)

  • State tax numbers, such as unemployment (UI) or withholding account numbers

Employee Wages

As you continue to process payroll throughout the year, the wages will update accordingly on the draft Form W-2 when the pay run is sent/processed, not after queuing the run. The wages reflected on the draft Form W-2 are a combination of:

Reviewing and understanding Form W-2

Below is information on the fields in Form W-2:

  • Box a: Employee Social Security Number (SSN).

  • Box b: Employer Identification Number (EIN).

  • Box c: Employer name, address, and zip code.

  • Box e: Employee name.

  • Box f: Employee mailing address.

  • Box 1: Wages, tips, and other compensation — Total calendar year taxable wages, tips, and other compensation paid to the employee.

  • Box 2: Federal Income Tax Withheld — Total calendar year federal income tax withheld from employee wages.

  • Box 3: Social Security Wages — Total calendar year employee wages subject to employee social security tax, not including social security tips.

  • Box 4: Social Security Tax Withheld — Total calendar year employee social security tax withheld, including social security tax on tips.

  • Box 5: Medicare Wages and Tips — Total calendar year employee wages and tips subject to Medicare tax.

  • Box 6: Medicare Tax Withheld — Total calendar year employee Medicare tax withheld

  • Box 7: Social Security Tips — Total calendar year employee tips reported.

  • Box 10: Dependent care benefits — Total dependent care benefits that your employer paid to you or incurred on your behalf (including amounts from a section 125 (cafeteria) plan). Any amount over $5,000 is also included in box 1.

  • Box 11: Nonqualified plans — This amount is reported in box 1 if it is a distribution made to you from a nonqualified deferred compensation or nongovernmental section 457(b) plan.

  • Box 12:

    • D—Elective deferrals to a section 401(k) cash or deferred arrangement. Also includes deferrals under a SIMPLE retirement account that is part of a section 401(k) arrangement.

    • E—Elective deferrals under a section 403(b) salary reduction agreement.

    • G—Elective deferrals and employer contributions (including nonelective deferrals) to a section 457(b) deferred compensation plan.

    • S—Employee salary reduction contributions under a section 408(p) SIMPLE plan.

    • W—Employer contributions (including amounts the employee elected to contribute using a section 125 (cafeteria) plan) to your health savings account.

    • AA—Designated Roth contributions under a section 401(k) plan.

    • BB—Designated Roth contributions under a section 403(b) plan.

    • DD—Cost of employer-sponsored health coverage. The amount reported with Code DD is not taxable.

    • EE—Designated Roth contributions under a governmental section 457(b) plan.

  • Box 13: If the “Retirement plan” box is checked, special limits may apply to the amount of traditional IRA contributions you may deduct.

  • Box 14: Other — Employers may use this box to report information such as state disability insurance taxes withheld.

  • Box 15: State Employer Identification Number.

  • Box 16: State, wages, tips, etc. — Total calendar year state taxable wages, tips, and other compensation paid to the employee.

  • Box 17: State income tax — Total calendar year state income tax withheld from employee wages.

  • Box 18: Local wages, tips, etc. — Total calendar year local taxable wages, tips, and other compensation paid to the employee.

  • Box 19: Local income tax — Total calendar year local income tax withheld from employee wages.

  • Box 20: Locality name.

3. Distribute Form W-2

You must provide your team with a physical copy of their tax forms unless your employees consent to receive an electronic copy. Electronic copies are available for your team members to view, download, or print from their online Square Payroll accounts. There are several ways for you to distribute your Form W-2s:

  1. Opt in to paper mailing by January 5, 2023 and have Square mail these forms for you.

    1. Square Payroll does not mail annual tax forms W-2 and 1099-NEC by default. If you prefer for Square Payroll to mail a physical copy of Form W-2 to each of your team members, go to your Payroll Settings tab and toggle on Send W-2s and 1099s via paper mail. Square will mail a tax form to the addresses on file for all team members paid in the prior tax year.

  2. Download, print, and distribute forms to your team.

    1. You can access a digital copy of your W-2s under Tax Forms in the Payroll tab of your Square Dashboard. You can then download, print, and distribute these to your team in person or by mail. Form W-2s are not available in the employer Square Payroll app.

  3. Distribute electronically (employee consent required).

    1. You may provide W-2s to your employees electronically if they give you permission to do so. To obtain consent, you can provide your employees with a statement, such as “I give permission to receive all future Form W-2 statements electronically. I also understand that if I wish to withdraw this permission at any time, I must inform my employer(s) proactively.” 

    2. With consent, team members with online accounts can view, download, or print a copy of their form at any time by logging in to their Square Payroll account, or, you can email the form to your team member. 

Note:  If you opt to mail your employees a physical copy of their W-2, Square Payroll will not resend the tax form if an employee does not receive it (due to invalid address or other reasons).

  • If your employee has an invalid mailing address and your business has a valid mailing address, their Form W-2 will be returned to your business. You are then responsible for providing them with their copy of Form W-2.

  • If your employee has an invalid mailing address and your business has an invalid mailing address, you are responsible for downloading the Form W-2s and providing them to your employees.

  • In the instance that your employee’s Form W-2 is returned to your business, ensure that your taxpayer address in Square Payroll is accurate. You can see what address is on file or update the taxpayer address for your business in the Business Info section of your online Payroll Dashboard.

  • Employees with online accounts can also access a copy of their Form W-2 under their Tax Forms tab or Square Team app.

Learn more about: Payroll

Can't find what you need?