Year-end payroll corrections are crucial for maintaining compliance with tax regulations and ensuring employees receive accurate tax documents. Errors such as incorrect Social Security numbers (SSNs), wrong names, issues with Third Party Sick Pay (3PSP), unreported cash bonuses, and changes in employee addresses can significantly impact tax filings.
Correcting these errors promptly is essential to avoid complications with the Internal Revenue Service (IRS) and state tax authorities.
How to Correct Common Year-End Information Errors
1. Wrong Social Security Number (SSN)
If an SSN is reported incorrectly, it is imperative to issue a W2C (Corrected Wage and Tax Statement) to both the Social Security Administration (SSA) and the state for the affected year(s). Additionally, you will need to amend the quarterly unemployment returns, as this impacts the records of the employee's employment.
2. Wrong Name
If the SSN is correct but the name is wrong, typically, you do not need to reissue a W2, as doing so with a W2C might delay the employee's refund. However, if necessary, a W2C can be issued upon the employee's request.
3. Third Party Sick Pay
Third-Party Sick Pay (3PSP) can be complex, with tax implications varying based on who paid for the insurance plan and how it was paid. Depending on your policy, you may need to furnish a W2C to the SSA & State, amend annual and quarterly tax returns, and address potential taxes owed.
4. Unreported Cash Bonuses
Forgetting to include cash bonuses in the year's payroll requires issuing a W2C and amending relevant tax returns to accurately reflect the employee's earnings and withholdings.
5. Address Change
An address change does not require refiling tax documents. A new copy of the W2 with the updated address should be sent to the employee, ensuring proof of timely mailing of the original document is maintained.
Leveraging Workforce PayHub for Seamless Corrections
At Workforce PayHub, we emphasize the significance of handling payroll corrections with precision. Our Customer Service Representatives are equipped to assist you in determining the necessary corrective actions for any discrepancies in your year-end payroll information.
Discovering discrepancies in your year-end payroll information? Don't navigate the complexities alone. Contact your Workforce PayHub CSR today. We're here to help you determine the next steps and ensure your payroll corrections are handled smoothly and accurately. Let's make your year-end process as seamless as possible.
