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marcuscato
Level 3

My obligation if employer issues me W2C by mistake

Long story short:

1) Got a sign-on bonus in 2020 to a company

2) Paid back the (pro-rated) sign on bonus in 2021 given I left the company early

3) Company told me they will be issuing me a W2C for 2020. They are super confident that this is the right route even if payback was in subsequent year.

 

I have been told by advisors on this forum and a local CPA that my company is not allowed to alter 2020 W2 given the payback was in 2021. 

 

If so, if company does issue me the W2C which (inadvertently) breaks some payroll/tax rules, what is my obligation? Do I merely match what they told IRS via the W2C, by filing an amendment and not worry about the proceedings of my company? Or should I be concerned that the W2C potentially should not have been issued to begin with? How far does my responsibility extend? I cannot tell my company not to issue a W2C.  I do not want to get in trouble with IRS - not filing an amendment vs filing with a potentially invalid W2C both seems troublesome.

3 Replies
Opus 17
Level 15

My obligation if employer issues me W2C by mistake

Please stop posting new topics.  Your questions can best be answered in the threads you already started.

 

https://ttlc.intuit.com/community/taxes/discussion/re-sign-on-bonus-repayment-clawback-federal-state...

https://ttlc.intuit.com/community/taxes/discussion/re-sign-on-bonus-repayment-tax-adjustment-w2c-or-...

 

Wait until you actually get a corrected W-2C for 2020 (if they issue one.  You are assuming you will receive one.  It could be the person you are talking to is not knowledgable and when the company makes the request to their payroll processor, the payroll processor will straighten them out.) 

 

Also wait until you see if the company actually pays the social security and medicare refund they promised.

 

When you have all the paperwork and all the checks, take your situation to an enrolled agent.  This is an accountant who is specially qualified to practice before the IRS, not just a storefront tax preparer.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
marcuscato
Level 3

My obligation if employer issues me W2C by mistake

What is a Payroll Processor? Is that ADP? I spoke to a Sr Payroll Manager in the company, so I am not sure who else is above them to correct them. Let us just assume I got W2C issued, would it be possible that is actually deep down "invalid"? Trying to understand the general principle of a W2 - I always thought as a tax payer your obligation is to only match the numbers in W2(C)

Mike9241
Level 15

My obligation if employer issues me W2C by mistake

per circular E. the w2c is proper but box 1 should not be changed.  the fica and medicare boxes must be changed if the taxable amounts you received are affected

 

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