Here are the answers to your questions. Please accept my sympathies to you.
Q1. You can try, although you would have no issue with explaining to the IRS should they ask at any point. You can also choose to nominee it to yourself, but again I would not be too overly concerned about it. It's already on your tax return as it should be. See how below.
Q2. Yes, it is the way it should be handled. They would be refunded those taxes as an employer, when the record is corrected and they should return the funds to you. You will report the refund of medicare and social security taxes as income in 2024 which I would guess is not substantial.
Nominee returns.
Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received). You must also furnish a Form 1099 to each of the other owners.
File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)
- On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer. The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.
The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here:
@CindyKR
[Edited: 02/13/2024 | 9:23 AM PST]
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