S-Corp: Payroll Matching

[alohaTy]

TurboTax Business provides a general tip/warning as an Audit Alert: "In order to avoid a notice from the IRS or your state tax agency, be sure that the total payroll (including officer compensation...) reported on this tax return matches the total payroll reported on your payroll tax returns."

As a S-Corp, health insurance paid for by the company was added for me (a 2%+ officer/owner) late last year, and unfortunately I now see it was added too late so it's not reflected in the final W-2 submitted to the IRS by our payroll provider (Gusto), as it should in box 14. At my request, Gusto has now issued a new W2-C with this corrected and says they will amend the Q4 2019 company filings but that this process can take up to 20 weeks to complete. 

Note: the health insurance is paid entirely by the company and does not otherwise impact the W-2 wages or payroll taxes.

Should I be concerned that this might trigger an audit? (i.e. that our corp return due Mar 15 won't yet exactly match previously provided payroll tax filings by our payroll provider, since health insurance was missing)

In this case, should I heed the Turbotax advice: "If these amounts are different, attach a statement to your return explaining the difference." If so, how do I do this? Can I still e-file?

Thank you!

[DianeC958]

Yes, you can still efile.  If your 4th Qtr payroll information is going to be filed correctly and that information will match what is on the business tax return you are ready to file. 

The information the IRS has and what you report on your return is not instantly matched up.  Since the forms are being corrected and filed with the IRS you should not have an issue.

[alohaTy]

To clarify, the 4th quarter payroll information had already been filed, so the corrections would be through an amendment, which wouldn't be instantaneous. Our payroll provider is saying we may want to do an extension, but I've never done one before and I'm trying to figure out if it's necessary in this case. I guess it just depends when the IRS starts reconciling our return with the payroll filings to look for red flags...

I would at least want to do what the Turbotax software recommends, to "attach a statement to your return explaining the difference." How/where do I do this if I e-file?

Thanks!

[DianeC958]

You do not need to do an extension for this issue.  The IRS does not process this information and match against what is on your return that quickly.  If you would like to extend you can.  It takes the IRS on average about 18-24 months to reconcile information they receive from 3rd parties against information on your return.

If you would like to attach a statement with your return then you would need to paper file your return.