Schedule H & 1042-S

[Max W]

Client has a household employee.

She should file a Sched H and a W-2.  Right?  Not so fast!.

 

Employee has an ITIN starting with 9.

 

ITIN's starting with 9 can NOT be filed on a W-2; they have to be filed on a 1042-S.

 

1042-S only reports gross payments and income tax withheld. There is no provision for

reporting fica or med.  This conflicts with Sch H.  

 

Any ideas???

 

BTW, the old 1042-S was about a third of a page.  It is now a full page with 28 pages of instructions.

[Pacun]

Maybe you cannot efile but you should file a W-2 form and mail it. The employee is a resident of the US for tax purposes and form 1042-s is for non residents.

[Max W]

Maybe you cannot efile but you should file a W-2 form and mail it. The employee is a resident of the US for tax purposes and form 1042-s is for non residents.

Thanks for replying. Mailing the W-2 may be the only way, although Pub 15 specifically says that an ITIN is not acceptable.

ITIN's are issued by the IRS and SS would have no record of it.  

More research finds that the ITIN in addition to the should have a 7 or 8 as the 4th digit, which this does not.

So, this sound suspicious, like a false number.

[Pacun]

Don't worry about those 4th digits things that you are reading. The IRS ran out of number and then they started issuing ITINs with a completely different number scheme to the point that efiles were rejected because the IRS changed the number scheme and didn't let the software companies know.

 

Many employees get fired because they use their ITIN as social security number and when the employer files its w-2s with SSA they get a letter asking to verify the number for employee X. At that point the employer knows he has an illegal working on his force and fires him/her. In your case, your client loves the lovely and inexpensive nanny he/she has and that's not an issue. Paper file and don't waste much time with it since the employer knows.

[Max W]

Thanks, Pacun.