What happens if W-2 forms are not provided by the deadline?

If W-2 forms are not provided by the deadline, employers face penalties and fines. The IRS sets strict deadlines for employers to issue W-2 forms to their employees, typically by January 31 of each year for the previous tax year. Failing to meet this deadline can result in financial penalties for the employer, which are intended to encourage timely compliance with tax reporting requirements. The amounts of these penalties can vary depending on how late the forms are provided and the size of the employer, increasing with each consecutive day the forms are late. This enforcement mechanism is designed to ensure that employees have the necessary documentation to accurately report their income and file their taxes on time, thereby keeping the tax system functioning properly.

The other choices do not reflect the consequences associated with not providing W-2 forms on time. While job loss or filing extensions may be concerns for employees in different contexts, they are not direct consequences of an employer's failure to provide W-2 forms by the deadline.