How to complete W-2?

[PaulH]

I do the payroll for an employer client with SS & Medicare withholding for an employee who told the employer after 2 months and the quarterly 941 was already filed that she was exempt (student on J-1 visa), and now cannot be contacted.  We filed a 941-X and got the employer amount credited, but the IRS still has the employee withholding amount, because the employer was unable to contact the employee to return it.  A W-2 with $0 in Boxes 3 & 5, positive withholding in Boxes 4 & 6 will be rejected by the SSA (ATX Payroll won’t even create the efile).  Do I just file the W-2 with $0 in Boxes 3, 4, 5, and 6, even though there really was withholding for Boxes 4 & 6?  If so, the total W-3 SS & Medicare will not match the corrected 941, and how would the employee prove she paid the SS & Medicare if she ever wanted to get it back?

[Jack from Ohio]

Why not just leave the W-2 as it was and let her get a refund when she files?  Too many chances for things to go wrong using the "amend everything to put it in proper order" method.  Sometimes simplest is the best.

However, now that the return has been amended, just send the W-2 showing the withholdings and let her get the refund on her return. (Providing she chooses a properly knowledgeable preparer.)

[jklcpa]

1 hour ago, PaulH said:

A W-2 with $0 in Boxes 3 & 5, positive withholding in Boxes 4 & 6 will be rejected by the SSA (ATX Payroll won’t even create the efile).

^ this, and it will have to be filed on paper with SSA.  As Jack says, she will have to claim the payments on her return to have the withholding refunded to her.

[PaulH]

Thank you both. In the future I will certainly take Jack's advice and let it be. The W-2 instructions say the paper filed W-2 will also be rejected and generate a letter to the employer telling him to file a correction, but I guess we will just have to deal with that when it comes.