W-2c because of deferred payments when I did not defer payments?

[Kelseria]

Hi everyone,

I was going through and doing a final check of my taxes before filing them. This time around, I got a message saying that we were going to receive a W-2c because "based on your tax return info, you'll get a W-2c because you deferred payment of some of your Social Security taxes last year." However, we did not defer payment of any part of our Social Security taxes last year. Is this something my husband's employer could have done, did I make a mistake last year when filing, or is this a glitch in the TurboTax software? Has anyone else had this problem?

Thank you very much in advance for your help. I have never had this happen before.

Kelsey

[tealpond]

Hi, I just had the same thing happen to me.  I think there was an executive order last year to suspend tax with holding because of the virus.  It was done in October I think.  Anyway that's what I think it is about.  I went ahead and filed my return anyway.

[SteamTrain · Accepted solution]

Some folks are getting that if they also had a 1099-NEC form in addition to a W-2

IF not that...

could be a simple rounding difference in box 4. 

__________________________

I tested my desktop software.....and for my test, in a situation where the 6.2% was close to $$$$.50..... a value of $$$$.49  in box 4 gave me the warning, and $$$$.50 did not....and that's all a rounding issue.

_________________________________________________

[Kelseria]

Thank you very much! That was the problem. I went in and changed it to 0.50 cents and no warning message came up. I will go back and change and ignore the message.

What a relief!

[Mesa64]

I think this was my issue also.  I did not defer anything yet had this weird message.

[S_Dietz]

what if I do have 1099-NECs but didn't elect to defer taxes?

[Mesa64]

I did not either. It’s just a TurboTax error. 

[PS CS]

Will Turbo Tax correct this and when? I'm ready to e-file my taxes. There should not be a corrected W-2c. The maximum amount of FICA at 6.2% is $8,537.40, based on $137,700.00 max Salary dollar. 

There should no be any rounding on this or have to correct box 4 from the original W-2. 

Please advise.

Thank you.

[SteamTrain]

@PS CS 

Advise...?   Ignore the notice  !

......That notice?  it doesn't do anything at all in your prepared tax return...it is just (wrongly) thinks you will get a W-2C sometime in the next 12 months...

___________

Unless you also had some Self-employment income entered in your file, there is nothing for you to do. but move on and ignore it.  Still, I wouldn't file before mid-March, but that's just me.

[NThompson1]

Here is some guidance from irs.gov I found while researching this same message in Turbo Tax. I'm not able to link it directly in this message for some reason (https://www.irs.gov/forms-pubs/form-w-2-reporting-of-employee-social-security-tax-defe[product key r...), but go to irs.gov/forms-pubs, select "Post Release Changes to Forms" and scroll down to "Form W-2 Reporting of Employee Social Security Tax Deferred under Notice 2020 65" to read the full context. I'll quote the employee section below:

Instructions for Employees
If you had only one employer during 2020 and your Form W-2c, Corrected Wages and Tax Statement, for 2020 only shows a correction to box 4 (or to box 14 for employees who pay RRTA tax) to account for employee Social Security (or Tier 1 RRTA tax) that was deferred in 2020 and withheld in 2021 pursuant to Notice 2020-65, no further steps are required. However, if you had two or more employers in 2020 and your Form W-2c for 2020 shows a correction to box 4 (or to box 14 for employees who pay RRTA tax) to account for employee Social Security (or Tier 1 RRTA tax) that was deferred in 2020 and withheld in 2021, you should use the amount of Social Security tax (or Tier 1 RRTA tax) withheld reported on the Form W-2c to determine whether you had excess Social Security tax (or Tier 1 RRTA tax) on wages (or compensation) paid in 2020.

If the corrected amount in box 4 of the Form W-2c for 2020 causes the total amount of employee Social Security tax (or equivalent portion of the Tier 1 RRTA tax) withheld by all of your employers to exceed the maximum amount ($8,537.40) of tax that you owe, or increases an already existing excess amount of employee Social Security tax (or Tier 1 RRTA tax withheld), then you should file Form 1040-X, Amended U.S. Individual Income Tax Return, to claim a credit for the excess Social Security tax (or Tier 1 RRTA tax) withheld. See the instructions to line 10 of Schedule 3 in the 2020 Instructions for Form 1040 and Form 1040-SR for more information.

[NThompson1]

Here is some guidance from irs.gov I found while researching this same message in Turbo Tax. I'm not able to link it directly in this message for some reason, but go to irs.gov/forms-pubs, select "Post Release Changes to Forms" and scroll down to "Form W-2 Reporting of Employee Social Security Tax Deferred under Notice 2020 65" to read the full context. I'll quote the employee section below:

Instructions for Employees
If you had only one employer during 2020 and your Form W-2c, Corrected Wages and Tax Statement, for 2020 only shows a correction to box 4 (or to box 14 for employees who pay RRTA tax) to account for employee Social Security (or Tier 1 RRTA tax) that was deferred in 2020 and withheld in 2021 pursuant to Notice 2020-65, no further steps are required. However, if you had two or more employers in 2020 and your Form W-2c for 2020 shows a correction to box 4 (or to box 14 for employees who pay RRTA tax) to account for employee Social Security (or Tier 1 RRTA tax) that was deferred in 2020 and withheld in 2021, you should use the amount of Social Security tax (or Tier 1 RRTA tax) withheld reported on the Form W-2c to determine whether you had excess Social Security tax (or Tier 1 RRTA tax) on wages (or compensation) paid in 2020.

If the corrected amount in box 4 of the Form W-2c for 2020 causes the total amount of employee Social Security tax (or equivalent portion of the Tier 1 RRTA tax) withheld by all of your employers to exceed the maximum amount ($8,537.40) of tax that you owe, or increases an already existing excess amount of employee Social Security tax (or Tier 1 RRTA tax withheld), then you should file Form 1040-X, Amended U.S. Individual Income Tax Return, to claim a credit for the excess Social Security tax (or Tier 1 RRTA tax) withheld. See the instructions to line 10 of Schedule 3 in the 2020 Instructions for Form 1040 and Form 1040-SR for more information.

[kstrauss-taxquick]

I, too, have this issue.  I checked W2 entry (I have only one) and the Box 4 is exactly 6.2% of Box 3.

The only reason this is showing up now is that I made $300 correction in my mortgage deduction. 

[BP25]

I have only 1 W-2, and have been retired since 2007.  My W-2 is showing income of an insurance benefit for a life insurance policy.  I've been getting this W-2 since retirement and never had anything in withholding boxes 4 and 6.  I never received a W-2c.  Something has changed to give me that deferred payment message, perhaps TurboTax does have a glitch.

[SamS1]

This was to be fixed with a recent update.  I would recommend deleting the W-2 with the following procedure then going in and re-entering.  While in your return in TurboTax:

• In the left hand column select "Tax Tools"
• Select "Tools"
• Select "Delete a form"
• Review for W-2
• Delete selected form then "Back"
• Re-enter W-2
• Run your Federal Review

This should fix it.  

Many taxpayers have been working from home this year.  Gaining deductibility from those expenses will be at the state level return. If your state allows miscellaneous itemized deductions, then you would possibly be able to deduct the expenses. With the changes from the 2018 Tax Cut and Jobs  Act, employee business expenses were eliminated as a deduction on your Federal return. If you live in Alabama, Arkansas, California, Hawaii, Minnesota, New York, or Pennsylvania, there is a deduction for unreimbursed employee business expenses. Or, if you live in a state the still allows itemized deductions even if you took the standard deduction on you Federal return. Click here for more tips on working from home.

[BP25]

I deleted and reinstalled my W2, ran Federal checking and was informed I would receive a W2-c in the future.  Is it possible the fix did not get to me yet??