W-2 correction guidance (for admins)

If you or an employee notice that their legal name or SSN is wrong on their W-2, an admin needs to update this information for them.

For name changes

Update the employee’s name—depending on when you make the change, what happens next might be different:

• If you update the name before W-2s are finalized (while they’re in draft mode):
  • The updated W-2s will be automatically created and ready for employers to review within two business days.
  • Employees will only see the final W-2s (not drafts) and will get an email when the final forms are ready in their Gusto account. This happens in mid-to-late January.
• If you update the name after the W-2 has been finalized:
  • Contact us from the Help section of your account so we can create a corrected W-2c.
  • Employees who need the corrected W-2c form should wait to file their taxes until they have both the original and corrected forms. If they’ve already filed, they’ll need to update their tax return with the corrected information.

For SSN changes

Update the employee's SSN—depending on when you make the change, what happens next might be different.

• If you update the SSN before W-2s are finalized (while they’re in draft mode):
  • The updated W-2s will be automatically created and ready for employers to review within two business days.
  • Employees will only see the final W-2s (not drafts) and will get an email when the final forms are ready in their Gusto account. This happens in mid-to-late January
• If you update the SSN after the W-2 has been finalized:
  • The system will automatically create a federal W-2c (corrected W-2) and it will be available in the employee’s profile within the next week. We’ll email you and the employee when the W-2c is ready to view.
    
    • Note: W-2c forms are created for the last two years if the employee was paid through Gusto during that time. If the SSN change is only for the previous year, contact us from the Help section so we can cancel the other W-2c forms.
  • Employees who need the corrected W-2c form should wait to file their taxes until they have both the original and corrected forms. If they’ve already filed, they’ll need to update their tax return with the corrected information.

Gusto does not amend state unemployment filings, or state W-2s for SSN changes. 

If an employee worked in a different state than what was listed as their work address in Gusto (for part, or all of the year), their wages were probably taxed wrong.

Admins need to correct some information in Gusto before we can help with a corrected W-2c form.

• Note: We do not create a corrected W-2c if the address change doesn’t affect the wages or taxes. If nothing changes with the wages or taxes, a corrected W-2c isn’t needed.

To start to fix the problem of wages being taxed incorrectly:

1. Follow the instructions in this article to add or correct the employee’s work address.
   • Reminder: Before adding a work address in a new state, make sure to add it as a company address first and register in the new state. 
2. Make sure the employee’s correct address and relocation date(s) are in their profile.
3. Contact Gusto from the Help section of your account to let us know which employee you updated info for, and ask for a corrected W-2c.
   • If you had trouble adding an address or relocation date, confirm this information when you contact us.

Once our team makes the corrections, a draft of the corrected W-2c will be available in the employee’s profile. We’ll email you and the employee when the draft of the corrected form is ready to view.

Employees should wait to file their taxes until they have both the original and corrected W-2c forms. If they’ve already filed, they’ll need to update their tax return with the corrected information.

Admins can go to this article to learn how to update an employee's home address. Employee's can also update their own address.

W-2 draft forms will update with the new current address within two business days.

Note: We do not create a corrected W-2c if the address change doesn’t affect the wages or taxes. If nothing changes with the wages or taxes, a corrected W-2c isn’t needed.

If an employee’s benefit deductions or employer contributions are incorrect on the W-2 here’s what to do:

1. Submit a benefit correction request in your Gusto account.
2. A ticket will automatically be created for our team to review and process. 
3. A corrected Form W-2c will be generated if the change(s) impact year-end filings.
4. Let your employees know they should wait to file their taxes until they have both the original and corrected forms.
   • If they already filed, they’ll need to update their tax return with the corrected information.

Once corrections are made by our team, a draft version of the W-2c (corrected W-2) will be available in the employee’s profile—we’ll email you and the employee when the draft form is ready to view.

Two of the most common reasons for wrong wages or taxes are:

• Missing employee wages
• Tax exemption issues

If you or an employee thinks their W-2 is missing wages or has wrong tax info, admins should check the annual wage reports and the tax exemptions set up in employee profiles.

Missing employee wages—what to do next

1. Find out what wages are missing and when they were missed by running a "Payroll Journal" report in Gusto.
   • This report shows a summary of wages and can be filtered by year.
2. Once you know the date of the missing wages, report the missed payroll(s) in Gusto.
   • Check out our article for step-by-step instructions on how to enter a missed payroll.
3. A ticket will automatically be created for our team to review.
   • If the missed wages are from a year we’ve already generated W-2s for, a corrected W-2c form will be created.

Fixing tax exemptions

If you think a correction is needed because employee tax exemptions were not set up correctly, here’s what to do:

1. Go to the People section.
2. Find the individual and click their name to view their profile.
3. From the "Taxes" tab, scroll to the bottom of the page to view the tax exemptions set up for the employee.
4. If something is wrong, contact us from the Help section of your account. Include:
   • The employee’s name
   • What the employee is or is not exempt from
   • The start and end dates of the exemptions (if applicable)
   • Any supporting documents the employee has (like exemption documents or emails from agencies)

Once our team makes the corrections, a draft of the corrected W-2c will be available in the employee’s profile. We’ll email you and the employee when the draft of the corrected form is ready.

Employees should wait to file their taxes until they have both the original and corrected W-2c forms. If they’ve already filed, they’ll need to update their tax return with the corrected information.

If something else is wrong, Gusto needs to review the correction to check tax implications. Contact us through the Help section of your account to explain what needs fixing.

You can correct the following special compensation on employee W-2s from the last calendar year:

• Allocated tips
• Child & dependent care
• Minister housing reimbursement
• Nontaxable moving expenses
• Exercised NSOs
• QSEHRA
• Untracked health insurance
• Retirement plan
• Statutory employee
• Third-party sick pay

Update special compensation for the last calendar year

1. Sign in to your admin profile. 
2. Go to Taxes & Compliance and click Overview.
3. Under “Quick links”, select Update [202X] W-2 special compensation.
   • Note: Between Dec 10 and Jan 8, you can only update special compensation for the current year. If you need to make changes for last year during this time, contact us.
4. Enter the correct amounts for each employee.
   • Note: If you do not need to update a box, leave it blank.
5. Make sure all the amounts are correct, then click Submit.

Once you submit corrections, we’ll email you and the employee when a draft of the corrected W-2 (W-2c) is available in the employee’s profile.

Employees who need the corrected W-2c form should wait to file their taxes until they have both the original and corrected forms. If they’ve already filed, they’ll need to update their tax return with the corrected information.

Admins can learn how to update company details in this article.

Note: If a company has a long name, it might get cut off on W-2 forms. We cannot fix this, but as long as the Federal Employer Identification Number (FEIN) is correct, there won’t be any tax problems.

We do not create a corrected W-2c if an employee changes their W-4 elections. Prior-year taxes will be reconciled when the employee files their personal taxes.

W-4 changes (made by employee, or employer) take effect on the following payroll run.