TurboTax incorrectly says I need a W2-C because I have two W2's for the year

[chrisf2]

TurboTax says I need a corrected W2 (W2-C) from my employer because my SS payments are deferred.  I think this incorrect for this reason.   My company was acquired by another a couple of years ago.  In 2021, they changed the name on my W2 to the new company name therefore they sent me two W2 forms one with the old name an one with the new name.   The first W2 has both box 3 (social security wages) and box 4 (social security tax withheld) filled in with valid values.  The second W2 has these boxes blank.   The reason the second has these blank is because my gross income on the first W2 exceeds the Social Security tax maximum of $142,800.  

My employer knows that I have hit the SS limit during the first W2 so they correctly did not withhold on the second.  It looks like TurboTax is not smart enough to handle this case.  I think this is a bug in the software.

Does this sound right?

[JohnB5677]

Is the TIN the same for both companies?  If they are, simply add the two W-2s together.  This will result in the equivalent of a W-2C.

[chrisf2]

The Employer Tax IDs are different so I can see how it looks to TT that it is two different employers.  Regardless of this, seems like TT should realize the limit has been hit and not trigger a false alarm for a W2-C.

[BillM223]

The rules for the employer are to withhold SS taxes, without regard to whether or not you have hit the limit with another employer. Or do you really expect employers to take the word of an employee who says, "you don't need to withhold any SS taxes, because I have already hit the limit with another employer"?

"My employer knows that I have hit the SS limit during the first W2 so they correctly did not withhold on the second." The employer may have known this, but they did not "correctly" withhold on the second W-2. The fact that the employer had reason to know that you had exceeded the limit is the exception and not the rule.

Then, at the end of the year on your tax return, you will get the excess SS taxes refunded on your tax return.

Since I don't think you will be able to e-file like this, may I suggest (unless one of my compatriots has a better idea), that you split the amounts in boxes 3 and 4 between the two W-2s. Yes, this won't match what the IRS has, but it will hopefully get you past any e-file rejects, and if the IRS writes you a letter, you can just respond that the second employer did not withhold SS taxes correctly, and this was your workaround to be able to e-file. 

Since the IRS really really really wants you to e-file this year, I don't think it will go beyond this.

@chrisf2

[chrisf2]

@BillM223 I see your point about when you have two different employers for a given year.   In that case it makes sense for both companies to withhold the usual amount.  However, in this case the employer ID changed but there was only one employer for the entire year.  They know when the maximum was reached.

Regardless of this, I think I can still file with the W2 info as-is.   TT is saying that I can still file but will have to file an amended return when the W2-C arrives I believe will never come.

It seems to me that spreading the withholding between two W2's may satisfy TT but may trigger the IRS if it sees the information doesn't match what the company has filed.  

Thanks for your suggestion but I think I will keep it as-is.

[BillM223]

OK. Well, you're going in with eyes open.

There are two parts to e-filing, the first is that TurboTax blocks the e-filing process because of an error, and the second is that the IRS e-fie server rejects the tax return because of the tests that the IRS imposes separately on incoming tax returns.

If you get by both of those, you may be home free, although I wouldn't totally rule out the IRS writing you a letter in two years wondering where your Social Security exemption paperwork is (which, of course, you don't have).

But once you file, this is really your employer's problem, because your second employer was supposed to withhold a matching amount of SS payments to send to the IRS separate from what you see on the W-2 - and the IRS might just wonder where their money is.

But your job is to file on time and to pay whatever tax you owe, so do that and hope for the best.