What to do when my W2 is wrong?

[Pizzabrewer]

Last year my company merged with another company.  In June our payroll was switched to the other company's system.  It has been a disaster ever since.  Everyone I've asked at my location has had their withholdings screwed up.  The other managers have all gotten duplicate paychecks several times.  One week I had almost $1500 added to my paycheck as "back pay" I wasn't owed, then a few days later I got a duplicate paycheck (which had all sorts of withholding goof-ups).  After numerous emails they did reverse the back pay but never reversed the extra paycheck.

W2s were posted to the online payroll portal last week and there were so many complaints that they pulled them back to fix.  This morning I see the "corrected" W2.  It is wrong.  The main issue is that my 401k withholdings are under-reported by about $4k.

I have little faith this will be corrected by 4/15.  Extrapolating from my location, there are thousands of people affected by this.  The problems have clearly overwhelmed the payroll staff, several of whom have left the company in the last few months.  The people hired to replace them must be wondering what they've gotten themselves into.  Every email I've sent since the back pay snafu (cc'd to my boss and the head of my department) has been answered with "we will get back to you".  I never hear anything further.

So what is my recourse?  Complain to the state labor board?  Is there an IRS form to report accurate numbers when the W2 is wrong??

Any advice is appreciated.

[dcheesi]

My layman's guess: You'll likely need to file an extension. You'll still need to submit payment for any amount owed, so you'd have to figure out the correct numbers as best you can and work up a hypothetical return based on that. Then file your actual return later on, once the corrected W2s are issued.

[BrightFIRE]

Per the IRS here https://www.irs.gov/faqs/irs-procedures/w-2-additional-incorrect-lost-non-receipt-omitted/w-2-additional-incorrect-lost-non-receipt-omitted "If by the end of February, your attempts to have the Form W-2, Wage and Tax Statement corrected by your employer are unsuccessful, you can request that an IRS representative initiate a Form W-2 complaint." Good luck - my husband had the same issue with a payroll switch over at a previous employer - they were running 2 systems and manually tracking and still fucked it all up.

[Pizzabrewer]

Thanks for that link.  It will probably come to this.

One of my co-workers has made weekly complaints to payroll that her withholding is wrong, and they finally told her to stop emailing.  Yet none of her issues (or mine, or anyone else's i've spoken with) have been fixed.

It's been eye-opening.  I've never heard of a company screwing up payroll like this.

[SimpleCycle]

You have to follow the instructions in @BrightFIRE's link, and be prepared to be on hold for an hour with the IRS when you call at the end of February or early March.  And I'd be prepared to file an extension while they try to work it out.

Also, I don't know the back story, but I'd quite honestly look for another job.  Company financials in disarray and accruing penalties for not sending out W-2s is not a good sign.

[MustacheAndaHalf]

I would do two things: first, report to the IRS that your W-2 is incorrect.  And then, tell co-workers you did it, and they should do the same.  Ultimately, the IRS needs to know this payroll provider is issuing incorrect W-2s for your company.

If you're the only one who corrects a W-2, it looks like your problem.  If dozens of employees do the same, it looks like the company has the problem (which is accurate).

[Pizzabrewer]

I would do two things: first, report to the IRS that your W-2 is incorrect.  And then, tell co-workers you did it, and they should do the same.  Ultimately, the IRS needs to know this payroll provider is issuing incorrect W-2s for your company.

If you're the only one who corrects a W-2, it looks like your problem.  If dozens of employees do the same, it looks like the company has the problem (which is accurate).

Yup I certainly will.  I'd imagine dozens/100s/1000s of complaints to the IRS would straighten out the mess in a hurry.  It is frustrating however because I expect a sizeable refund (yeah, I know, but there are extenuating circumstances) and am otherwise ready to file my return.  Having to wait another 4 weeks before initiating IRS action is wasted time.

[secondcor521]

It is frustrating however because I expect a sizeable refund (yeah, I know, but there are extenuating circumstances) and am otherwise ready to file my return.  Having to wait another 4 weeks before initiating IRS action is wasted time.

You have the option of filing now with the most recent incorrect W-2, then amending your return when you receive the corrected one.  That would probably get you most of your refund sooner.  Up to you if the hassle (x2 if you also have state returns) is worth it.

[LightStache]

I would do two things: first, report to the IRS that your W-2 is incorrect.  And then, tell co-workers you did it, and they should do the same.  Ultimately, the IRS needs to know this payroll provider is issuing incorrect W-2s for your company.

If you're the only one who corrects a W-2, it looks like your problem.  If dozens of employees do the same, it looks like the company has the problem (which is accurate).

Yup I certainly will.  I'd imagine dozens/100s/1000s of complaints to the IRS would straighten out the mess in a hurry.  It is frustrating however because I expect a sizeable refund (yeah, I know, but there are extenuating circumstances) and am otherwise ready to file my return.  Having to wait another 4 weeks before initiating IRS action is wasted time.

Nope, what gives you the impression that the IRS would collect these complaints together and then take corrective action with the employer? If that happened it would take years. You should expect this situation to be corrected over years. Getting two gigantic organizations to correct massive errors is a fools errand.

What I would do is file your return with your most recent W2C and then file amendments as you receive updated W2Cs. The goal being to match the IRS computer and avoid a CP2000. I'd also file a complaint as suggested by @BrightFIRE and keep a record of all communications with your company to try to resolve the problem, including memoranda after verbal communications.

You could engage with an accountant or tax attorney to file an adjusted return and try to get aggressive with your company. That would likely work to more expeditiously solve your problem, but it will also cost more in the long term and could also get you terminated.

ETA: Change taxpayer advocate to @BrightFIRE recommendation

[Pizzabrewer]

It is frustrating however because I expect a sizeable refund (yeah, I know, but there are extenuating circumstances) and am otherwise ready to file my return.  Having to wait another 4 weeks before initiating IRS action is wasted time.

You have the option of filing now with the most recent incorrect W-2, then amending your return when you receive the corrected one.  That would probably get you most of your refund sooner.  Up to you if the hassle (x2 if you also have state returns) is worth it.

Well the biggest issue is that the company has under-reported my 401k contributions by $4k+.  This is enough to push us over the 50% savers credit cliff.  The savers credit has been the main goal of our tax planning the past few years, and missing that credit would seriously impact our refund.

There have been a few benefits to the payroll chaos.  I received 53 weekly paychecks last year.  I also just found out that the company "matched" almost $500 worth of HSA contributions (despite a company match not being offered).  It's nice to get extra money but this pushed me into a situation of excess HSA contributions.  I now have to file with my HSA administrator for a reversal.

The whole thing is a mess.

[secondcor521]

It is frustrating however because I expect a sizeable refund (yeah, I know, but there are extenuating circumstances) and am otherwise ready to file my return.  Having to wait another 4 weeks before initiating IRS action is wasted time.

You have the option of filing now with the most recent incorrect W-2, then amending your return when you receive the corrected one.  That would probably get you most of your refund sooner.  Up to you if the hassle (x2 if you also have state returns) is worth it.

Well the biggest issue is that the company has under-reported my 401k contributions by $4k+.  This is enough to push us over the 50% savers credit cliff.  The savers credit has been the main goal of our tax planning the past few years, and missing that credit would seriously impact our refund.

There have been a few benefits to the payroll chaos.  I received 53 weekly paychecks last year.  I also just found out that the company "matched" almost $500 worth of HSA contributions (despite a company match not being offered).  It's nice to get extra money but this pushed me into a situation of excess HSA contributions.  I now have to file with my HSA administrator for a reversal.

The whole thing is a mess.

I agree that it is a mess, and I'm honestly sad that it is happening to you.  You still can file now and perhaps get part of your refund, then file an amended return to get the rest of it later.  You're deciding between the tradeoff of having getting some money earlier in time versus the hassle of amending.  If you amend later, you should be claim the Savers Credit at that time and get that part of your refund.  There are a very few things that you can't change with amending, but I seriously doubt that the Savers Credit is one of them.

[Lemonhead]

Pizzabrewer I feel your pain.  I had a hard enough time dealing with local taxes being paid to the wrong city for husband 2 years ago.  We are supposed to pay local taxes to the city where we work, then additional to the city where we live if their rate is higher.  Where we lived changed their tax rate in July which somehow was a real challenge for his LARGE employer.  Even though they didn't need to make any changes, they quit paying the correct city and started paying the wrong city the wrong taxes.  Even with employer signing statement of their error, it was such a nightmare getting a refund from the wrong city and even convincing them I had already paid the correct city.  I sent multiple emails, faxes and had several phone calls with their accountant who finally agreed with me and my numbers and sent refund. 

That same tax year I also had to request refund from HSA account for over contributing because his employer made an extra contribution that we weren't expecting.

Not thrilled at all to file federal, state, local, local and school district tax returns two years in a row. 

[Pizzabrewer]

Update:  there is no update.  I submitted a request on 1/31 through the "new" payroll response portal.  Other than an automated reply (your request has been received and added to the queue), I've heard nothing.

I've tried to escalate this through my boss and my department head.  They've basically thrown their hands up over the whole thing.

So it looks like I'll be reporting an incorrect W2 to the IRS. 

Meanwhile, payroll is still having issues.  One of the other managers at my location just had another duplicate paycheck today (duplicating Friday's paycheck).  It's amazing they still haven't straightened out the system going forward.  Fixing past mistakes is obviously not a priority.