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Date: July 25, 2008
Bulletin Number: 831
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Subject

Monthly Processing of Form W-2C (Corrected Wage & Tax Statement)

Purpose

To advise agencies of the new automated print process for Form W-2C.

Affected Employees

Employees whose previously issued Form W-2 (Wage & Tax Statement) requires correction and a Form W-2C is issued by OSC.

Background

In order to streamline the process and for compliance purposes, agencies are no longer required to prepare Form W-2Cs. OSC will produce W-2Cs monthly based on Workers’ Compensation awards or agency request.

Form W-2C adjusts an employee’s wages reported for a previous calendar year.  The correction is necessary because this adjustment took place after the employee’s original Form W-2 was issued.  The adjustment may be a result of a Workers’ Compensation Award or other changes to reported data.

Workers’ Compensation:

Wages paid under New York State Workers’ Compensation Law are exempt from Federal taxes in accordance with Internal Revenue Code Section 104(a) and Section 3121(a)(2).

Generally, when Workers’ Compensation benefits are awarded in the same year as the employee’s disability and this information is received by the Office of the State Comptroller during the calendar year-end processing, the non-taxable benefits will be reflected in the employee’s Form W-2.  When benefits are awarded for a previous year or the information is received after the calendar year-end processing, a correction of the previously issued Form W-2 is required.

Employees who received a Workers’ Compensation award in a previous calendar year were allowed to use their C-8 form to amend their taxes.  The IRS no longer allows employees to use this document when filing amended tax returns.

Other Reasons for W-2Cs:

  • Adjustments to wages due to late reporting of fringe benefits, or errors to previously reported income and deductions.
  • Report of Check Returned for Refund or Exchange (AC 230) processed after the close of the calendar year.
  • Erroneous reporting of wages paid to full-time students and nonresident aliens as subject to employment taxes but should be exempt.
  • Erroneous reporting of wages as exempt from employment taxes but should be subject to these taxes.

The Form W-2C may be used to submit an amended tax return to report decreased or increased taxable wages.

Effective Date

Starting August 6, 2008, the forms will be mailed to affected employees on the first Wednesday of each month.

OSC Actions

OSC will begin the print process for W-2Cs on a monthly basis, including all 2005, 2006, and 2007 W-2Cs not previously printed. These forms will be mailed directly to the employee.

The return address for the W-2C will be the OSC address.  OSC will mail undeliverable W-2Cs to the agencies.  Agencies will be responsible for mailing the tax document to the latest address on file for the employee.  Agencies also need to update employee addresses in PayServ.  Refer to Payroll Bulletin No. 819 for instructions relating to employee address updates.

OSC will enclose a letter with each W-2C to explain the form issued.

Agency Actions

Agencies must continue to submit the W-2 Corrected Worksheet (AC 2674) for employees requiring a corrected Form W-2 not related to Workers’ Compensation.  OSC approval is required for these corrections.

Agencies can view the Form W-2C information in PayServ by accessing the W2c US/Territories page following this path:
Compensate Employees > Maintain Payroll Data (US) > Use> W-2c US/Territories.

Refer to Payroll Bulletin No. 773 for detailed instructions on the W‑2C security for agencies to view W-2 corrections on-line. Agencies are requested to answer employee questions regarding the W-2 correction process whenever practical.

Questions

Questions regarding W-2Cs related to AC 230s, taxable fringe benefits and other reporting issues may be e-mailed to the Payroll Deductions mailbox.

Questions regarding W-2Cs relating to Workers’ Compensation Awards may be e-mailed to the Workers’ Compensation mailbox.