Few things come close to the frustration and inconvenience you feel when you receive an incorrect W2 form during tax season. Forget about tax filing delays; You might’ve to deal with varied legal consequences as well. So it becomes rather vital for you to know just who is responsible for incorrect W2, and more importantly, how to resolve this issue at the earliest.

What is W2 Form

The Wage and Tax Statement, or W2 form, is an IRS mandate requiring your employer to fully disclose your (the employee’s) annual financial statement.

It includes your annual wages plus the tax amount that is withheld from your paycheck. The W2 form is what you provide when filing your tax return, Federal and State. This helps you report your income accurately and the IRS to determine your tax liabilities.

But what if you receive an incorrect W2 form or worse multiple W2 forms in the same tax season? Doesn’t sound too good, does it? 

Who is Responsible for Incorrect W2

The responsibility of an incorrect W2 form falls on your employer, that is, if we only go by the books.

The Internal Revenue Service (IRS) Section 6051 mandates your employee to provide you and the Social Security Administration (SSA) with an accurate W2 form on 31st January every year. The onus is on the employer to furnish and report correct information on the form and thus present your annual earnings and tax withholdings.

Your employer is also responsible for correcting errors on the form upon discovery. Not only that, they must prepare and, once again, distribute a corrected W2 form, a W-2c form, to both you and the SSA.

The IRS can and will impose penalties on your employer if they do not correct W2 form errors on time.

But what is your role in this?

Employee Responsibility

True, your employer is mandated to furnish a correct W2 form, but you have a role in this as well; a very vital one at that.

You must carefully check for errors in your W2 form immediately upon receipt. And, file for corrections in case of any errors or discrepancies.

The crux of the matter is that you, the taxpayer, are ultimately responsible for providing accurate information to the IRS. It matters little whether your employee furnished incorrect information or not. Because once the IRS receives the incorrect form, you’ll be the one to bear any penalties or charges related to errors on the returns.

• Professional Tax Preparers

Do not rely blindly on professional tax preparers either. Sure, they are experts in these matters, but mistakes do and will occur. Ensure the accuracy of your information yourself.

Although, a silver lining does exist. You can file a complaint using Form 14157 with the IRS in case of preparer misconduct or negligence. Similarly, complaints under Form 14157-A address errors related to your return or refund.

Correcting Incorrect W2 Form

• Before anything else, ensure that all the information on the W2 form regarding your annual financial statement is correct.
• Immediately notify your employee or professional tax preparer in case of any errors or discrepancies in the form. Put in a request for a corrected W-2c form.
• Do not file for a tax return or refund before receiving the corrected W-2c form. Doing so will lead to discrepancies and might invite an IRS audit.
• Avoid paying late filing penalties by filing for an extension using Form 4868 if the corrected W-2c form is getting delayed.
• Document and maintain all communication records between you and your employer regarding corrections, including copies of original W2 and corrected W-2c forms.

Conclusion

Filing tax returns or refunds is cumbersome, triggering penalties or even possibly inviting an IRS audit in case of errors and discrepancies. Carefully check and submit the correct W2 form with accurate information on your income and tax liabilities. Doing so will help ensure you have a smooth sailing tax season in the coming year.

If you need help generating your W-2, you can use our easy-to-use W-2 form generator to get started quickly and accurately.

FAQs

1. Is it illegal for a job to withhold your W-2?

Yes, it is illegal for your employer to withhold your W-2 form. Your employer/employers are mandated by law under IRS Section 6051 to furnish a correct W-2 form by January 31 every year.

1. What are potential consequences for a company incorrectly reporting and withholding payroll taxes?

The company can face interest charges, heavy penalties, and even criminal prosecution for incorrectly reporting or withholding payroll taxes.

1. What to do if your employer messes up your W-2?

Immediately contact your employer and request from them a corrected W-2c form. In case you don’t receive it in a month’s time or your employer is unwilling to furnish the same, contact the IRS at 800-829-1040.

1. Can I sue a company for messing up my W-2?

Under normal circumstances, you cannot sue a company for messing up your W-2. The IRS has statutory authority with matters related to W-2. However, if the mishap causes you financial harm (for instance, lost wages or identity theft), a civil lawsuit becomes an option depending on your local state laws.

References

• https://www.irs.gov/filing/if-you-dont-get-a-w-2-or-your-w-2-is-wrong
• https://www.wsj.com/personal-finance/taxes/cheating-on-taxes-this-year-irs-1f35b183
• https://www.irs.gov/forms-pubs/about-form-w-2
• https://www.irs.gov/
• https://www.law.cornell.edu/uscode/text/26/6051
• https://www.ssa.gov/
• https://www.irs.gov/forms-pubs/about-form-w-2-c
• https://www.irs.gov/payments/information-return-penalties
• https://www.irs.gov/dmaf/form/f14157