W2 incorrect taxes withheld

[Stevie123]

I am in California. I am a background actor, so I get a check for every day of my work not a weekly or bi-weekly check. My payroll company issued me two checks $100 each gross for the same two work dates twice. Not duplicates but different checks with check numbers that are different from the original ones. I never received those two checks but in my payroll online account it shows those checks and that taxes were withheld from them. I called the office and asked them about the checks. They told me that they were mailed out and I should file a reissue form if I didn’t receive them. But I got paid for those days already, so I decided not to ask for reissue because it was clearly a mistake on their part. Later, I looked at my more recent checks year-to-date gross income and tax deductions and it shows that the money from those two erroneous checks were included in my income and taxes.My biggest concert is if those 2 checks were never actually issued and mailed out to me but it shows that taxes were withheld, am I going to have any problems with the IRS if I file with the W2 that is going to include the income and taxes from those two checks that I never received and possibly were never issued, therefore no taxes were actually withheld from them? Should I do anything about it?  (it shows taxes withheld from each check: Fed -$10.35, FICA-SSA - $6.20, FICA-MED - $1.45, CA SDI - $1.20, CA ST - $4.45)

[Opus 17 · Accepted solution]

You will pay income tax based on whatever your W-2 says.  If your W-2 is incorrect, you will need to get it corrected with the payroll company. Or, request the that the checks be re-issued so that your W-2 will in fact match what you were paid.

There is a procedure that you can use to file your tax return if you believe that your W-2 is incorrect. However, this will raise a red flag with the IRS. You are not supposed to use this procedure unless you have requested that the payroll company issue a corrected W-2 and they have refused. Then, if the check was issued but lost, and you have the ability to request a re-issue, the IRS may view that you have in fact been paid that money and that your W-2 is correct after all.  So you should make an effort to get the situation straightened out before you file your tax return.

[Stevie123]

Thank you for you response! I wouldn’t want to make things more complex and potentially have the payroll make more mistakes if I was to try to fix it. I don’t mind paying taxes on those $200 which I never received. So, if I was to not do anything about it and leave it as it is( let’s say, the payroll will mail me a W2 including the income and taxes withheld from those two checks). Should there be any problems if I just file taxes with that W2? If for some reason the checks were never issued therefore no taxes were actually withheld from them and paid to the IRS but the W2 shows those taxes as withheld ( state, fica, and probably the employer’s portion of FICA) what would happen in that case? Will the IRS send me a letter later?  

[Opus 17]

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@Stevie123 wrote:

Thank you for you response! I wouldn’t want to make things more complex and potentially have the payroll make more mistakes if I was to try to fix it. I don’t mind paying taxes on those $200 which I never received. So, if I was to not do anything about it and leave it as it is( let’s say, the payroll will mail me a W2 including the income and taxes withheld from those two checks). Should there be any problems if I just file taxes with that W2? If for some reason the checks were never issued therefore no taxes were actually withheld from them and paid to the IRS but the W2 shows those taxes as withheld ( state, fica, and probably the employer’s portion of FICA) what would happen in that case? Will the IRS send me a letter later?  

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When the payroll company issues a W-2, copies go to the IRS and the social security administration, along with a form W-3 that is a cover page (more or less) that sums up all the deposits for a particular employer.  The totals on the W-2s have to match the W-3, and they also have to match the form 941 that the payroll company files quarterly.  Everyone uses software now so it is extremely unlikely that the payroll company would file W-2s and W-3s that did not match their quarterly 941s.   So as far as the IRS and social security are concerned, what's on the W-2 is what you were actually paid and what's reported as withholdings in boxes 2, 4 and 6 is what was credited to your account.   In the unlikely even there is a discrepancy, that's the responsibility of the payroll company, not you.

Trying to guess at the what is happening within the payroll company's accounts, it sounds like they received $100 gross from a client for a day on set, and they issued two payroll checks for $75 each, and they made two sets of payments to the IRS, social security, and the FTB, totaling about $50.  If you do nothing, the payroll company comes out $50 ahead in the long run, although that might never be found, depending on how they run their bookkeeping.  If you requested a replacement check, then the payroll company would be out $25 for the taxes withheld on the second check that you didn't actually work for.  (And it might even be that the production company paid twice, so the payroll company is $150 ahead, and would still be ahead if you asked for one of the checks.)  But that's not really your concern, unless you are weighing moral arguments to request that $75.

[Opus 17]

@Stevie123 

Let me put it this way.  If you were walking down the street and Gov Newsome walked up to you and asked for an extra $75 on his say-so, would you pay him?  Or even just the $5 CA withholding?  So why not get the $75 you actually worked for?  Last year I filed an amended tax return for $11 because a tax law had changed retroactively after I filed my original return.  The money was less than a single dinner out, but it was the principle.

Cheers. 

[Stevie123]

Thank you so much for your detailed response!

[JabRod]

Since they already prepared your W-2, chances are they already submitted the same information to the IRS. If I were you, I would ask them to reissue the checks to you. If you don't want them to reissue those checks to you, because you didn't work for them, then they need to refile with the IRS and give you a corrected W-2 form. Employers can correct the W-2's on there end. So you have two choices. 🙂