TWO W2S FROM SAME COMPANY FOR SAME EMPLOYEE BY MISTAKE

[KATHERINE]

Dear friends here,

I need some advice how to fix this error:  The employer switched payroll company during the first quarter of 2021.  But, the old payroll company did not stop filing as instructed for that quarter.   It ended as the old and new payroll companies both filed 1st 941 2021.   (the later payroll company's efile 941 got rejected, I suggested them to mail it because the later one covered the entire quarter).    I called IRS and explained to them that they should discard the first 941 e-filed by the older payroll company, and there was no overpayment.   After a while, in a following up call, I was told they did the correction and only kept the later paper filed 941.    But by the end of the year, I discovered, the older payroll company submitted W2 for that short period too.  so, now, it ended the employees in that company have two W2s from the client, one from the older payroll covered only two month of 1st quarter 2021, and new payroll company had filed W2 for the whole year's payroll.

I called SSA at the owner-employer's half and tell them the small amount of W2 should not be counted, they told me to contact IRS.  I called the professional line, they said they dont handle this and only the withholding department handles it.  

Now, the withholding department is not taking calls.  

Anyone can advice what should I do?

 

Thank you!
 

Kate

[jklcpa]

The former payroll company should take care of this by voiding the 1st quarter 941 that was filed and by voiding any w-2s it issued in error.

[KATHERINE]

Thank you, Judy.  It is good idea, let me contact the first payroll company, hope it will work.  Thank you!

[Pacun]

I think the new company needs to amend the first quarter.  They are lucky to have access to January payroll information but they don't know if paychecks were issued because they didn't issue them.  The old company correctly filed when they had records and shouldn't be bothered. Also, who will be more inclined to help? The payroll company that was fired or the payroll company that is still receiving payments from the employer?

 

[Lee B]

22 hours ago, jklcpa said:

The former payroll company should take care of this by voiding the 1st quarter 941 that was filed and by voiding any w-2s it issued in error.

I know how to amend W 2s and 941s, but I don't know how to void them?

[jklcpa]

14 hours ago, Pacun said:

I think the new company needs to amend the first quarter.  They are lucky to have access to January payroll information but they don't know if paychecks were issued because they didn't issue them.  The old company correctly filed when they had records and shouldn't be bothered. Also, who will be more inclined to help? The payroll company that was fired or the payroll company that is still receiving payments from the employer?

 

No, according to the OP's initial post that I just reread, the client changed payroll processors sometime during the 1st quarter, so the old processor's filing could not be correct and was instructed not to file it.  OP also said she has already handled that part of the problem by calling the IRS, and the IRS finally agreed to ignore the first processor's 941 filing for the (partial) 1st quarter and accepted the 2nd processor's 941 for that quarter.

My next post immediately below quotes the IRS instructions of how the W-2 issue should be corrected (not voided), as cbslee pointed out.

[jklcpa]

20 minutes ago, cbslee said:

I know how to amend W 2s and 941s, but I don't know how to void them?

 

Well, thanks for pointing out my error.  The W-2 reporting must be corrected. The quote below is from the IRS general instructions for W-2/W-3:

 

Quote

Two Forms W-2 were filed under the same EIN, but only one should have been filed.

Example.

Two Forms W-2 were submitted for Mary Smith under the same EIN for the same tax year. One Form W-2 correctly reported social security wages of $20,000. The other Form W-2 incorrectly reported social security wages of $30,000. There are two ways to correct this situation.

File a Form W-3c along with one Form W-2c, entering $50,000 in box 3 under “Previously reported” and $20,000 in box 3 under “Correct information”; or

File a Form W-3c along with one Form W-2c, entering $30,000 in box 3 under “Previously reported” and $0.00 in box 3 under “Correct information.”

 

[Pacun]

If you are a payroll processor, I think the client doesn't instruct you to NOT file a W2 if you processed paychecks for an individual.  I think it is your responsibility to file those forms with the amounts you have on records.

[jklcpa]

3 hours ago, Pacun said:

If you are a payroll processor, I think the client doesn't instruct you to NOT file a W2 if you processed paychecks for an individual.  I think it is your responsibility to file those forms with the amounts you have on records.

That is simply NOT true. I've had many business clients change processors over the years, and it is a service they are paying for.  When the client changes services, clients certainly DO tell the old processor what filings should be done, including the current 941, unemployment returns, and year-end filings of 940 and W-2s.  This is especially important if the client provides the new service with the YTD figures so that duplications do not occur like happened with the OP's client.

 

[Medlin Software, Dennis]

Many processors will refuse to file, thus sign and accept at least partial liability, for anything they did not handle. I am somewhat shocked the second processor filed anything including checks they did not create.

If the services handled the money, they will likely insist on filing the forms, and will usually not include anything they did not handle. Could be both are just paper processors, or even straw processors.

for expediency, the employer, or their current representatives, can handle the corrections. 

[KATHERINE]

On 7/23/2022 at 11:04 AM, jklcpa said:

 

Well, thanks for pointing out my error.  The W-2 reporting must be corrected. The quote below is from the IRS general instructions for W-2/W-3:

 

 

Thank you all    Like all expected, the old payroll company ignored me, I sent a ticket last week, and no response.  But thanks to Judy, I will do the correction as you quoted.   I am so glad to find the solution on this.   Really appreciated, many many thanks.     I will follow up and update here to see how long it will take to get it fixed.

 

[KATHERINE]

Hi friends, 

I efiled W2C by following the second method: input the total of both W2s (the wrong one which covered Jan 2021 and Feb 2021 and the correct one which covered the entire 1st 2021) as original, and input the second one (covered entire quarter) as corrected amount on Monday,  and by Friday, the affected individual's personal social security account showed the total income earning is corrected. 

so, I think it is resolved.   IRS did not ask me to file 941X though.  The agent just removed the "wrong" one and kept the "good" one while on the phone with me.

 

Thank you all.

 

Kate