The IRS has record of him and his social and also other W2's for that year, just not from us. We filed our taxes and everything is fine. His lender is saying that we need to refile his W2. Is this correct? If so, how do I do that?
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A lender does not need a W-2. What they want, is a copy of the 2016 tax return. So the prospective borrower just needs to print out their 2016 return and sign it. If married the spouse needs to sign it to. Then that's what gets provided to the lender.
To assist your employee, send him another copy of the W-2 to show to the bank.
You could also write a letter of employment on company letterhead.
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