Who Is Responsible For Incorrect W-2?
It’s always concerning whenever you receive a Form W-2 with inaccurate information. Errors on this form can lead to complications and delays with the Internal Revenue Service (IRS). Learn how you can correct information on this form below.
What Is The Employer’s Legal Obligation?
Under federal law, any individual or business that pays wages and withholds taxes is required to provide employees with a written wage statement. Typically, the deadline to furnish these forms to employees and the Social Security Administration is January 31. However, the deadline will fall to the next business day if January 31 happens to be on a weekend or holiday.
When an employer hires a third-party payroll system, they are usually still responsible for ensuring wage statements are filed properly and taxes are paid. The IRS will enforce these requirements by imposing penalties for late filing or incorrect statements.
Typically, fines will start at $60 per form and will increase based on how long the error takes to be corrected. Employers can also be penalized for incorrect or missing details on the form. Penalties can reach $660 per form with no cap on the total fine.
How Can An Employee Correct A W-2?
Once you receive your W-2, thoroughly review it to catch any possible errors. It’s suggested to compare all the information on the form to your own records. You’ll want everything to match, at this time.
Verify the following key areas on the form:
- Make sure your name is spelled correctly.
- Wage and salary figures match your own records.
- Social Security number is correct.
- Amounts withheld for federal, state, Social Security, and Medicare taxes match your records.
How To Request A Correction From Your Employer
The first move you should make when you notice any error on the form is to simply ask your employer to correct it. Form W-2c is the official document used to fix errors, which is a Corrected Wage and Tax Settlement. At this time, you should gather documentation, such as pay stubs and direct deposit statements, showing the correct figures.
Submitting this request in the written form will ensure there is a record of communication. In this request, you should clearly state which information is incorrect, while providing the correct numbers. When referencing the supporting documents, you ultimately make it easier for the employer to verify and make the requested changes.
What To Do If Your Employer Refuses To Cooperate
If it is the end of February and your employer has failed to provide a corrected form, you can contact the IRS for further help. The agency will then contact your employer to request the missing or corrected form. You will then be sent instructions detailing how you can proceed with the filing.
When reporting this issue to the IRS, have the following information ready:
- Your name, address, and Social Security number.
- Name of the employer, address, and phone number.
- Your employment dates.
- Estimate of your earned wages and the federal income tax withheld.
How To File Taxes With An Uncorrected W-2?
Even if you have yet to receive a corrected wage statement, you should always file your taxes on time. You can use Form 4852 as a substitute when the corrected form fails to arrive by the set deadline. This form allows you to report your estimated wages and withheld taxes based on your own yearly records.
When filing your return, make sure to attach Form 4852 to it. Using a substitute form can delay your return or refund as the IRS must verify your provided figures. If you receive a corrected form after filing that differs from your estimates, you are required to file an amended return using Form 1040-X.
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