Can a company file a late (2009) W-2 with Social Security and Medicare wages and zero Social Security and Medicare withholding?
| May 18, 2011
We only found out in 2011 that we needed to issue a W-2 (for NSO options exercised). By filing the W-2, we'll pay the company Social Security and Medicare taxes. However, we didn't withhold (or collect) anything from the former employee in regards to the employee's Social Security and Medicare. ADP is insisting that the W-2 shows an employee withholding to the full extent (6.2% for Social Security and 1.45% Medicare). Is there any way we can file a W-2 for the employee with zero Social Security and Medicare withholdings? And, would this be possible with ADP? We're not certain that we're getting good advice from ADP.
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Answers
Company: Schwartz International
Bob:
My first impression is that there should be reporting for Soc. Sec. and Medicare. I would not be surprised if the company is responsible for both sides of withholding (employer & employee). I think there may also be a potential problem related to the absence of federal or state income tax withholding.
Company: LogLogic
Marc, Thanks for the confirmation...not surprising...:-( Regarding Federal withholdings, our tax advisor suggested having the W-2 recepient complete a Form 4669 to substantiate payment instead of withholdings.
Company: AKT LLP CPAs and Business Consultants
I'm sorry to tell you that you are liabile for the employee's portion as well. We recently found this out with a employee vs contractor situation. When the federal government reclassified our contractor as an employee we were liabile for the employer and the employee withholdings (med/ss/fed & st withholdings). It is the governments way of making sure it is painful enough not to do it again.
Company: LogLogic
Shannon, Ouch...and thanks for the confirmation! You may want to check out using Form 4669 in the future with regards to income tax withholdings. I understand that if the receipant confirms that income taxes have been paid, the employer has some basis to not withhold income taxes.