Broker Check

Filing a Tax Return When an Employer Still Owes You Money

Howard Hook,CFP®, CPA, quoted in The Star Ledger's business/finance column, "Biz Brain" on March 11, 2013

Question: To supplement my retirement income I took a part-time job with a national retail store. The employer has an “employment at will policy,” such that I or the company may terminate employment at any time for any reason. I formally resigned after my fifth day at work. I received a check for one day of work, but nothing for the other four. I continue to fight the company for payment, but what do I do about my tax return? I received a W-2 listing income from the five days I worked, even though I was only paid for one. Should I file my taxes excluding their W-2? If win in court and they finally pay me in 2013, shouldn't that money be included in my in 2013 tax return even though it was earned in 2012? — Absolutely Perturbed

Answer:  It sounds like a mistake was made, and it's one you're right to want to correct.

If the W-2 shows an amount that was not paid to you, there would be a discrepancy when the company filed its Form 941 payroll tax return at the end of January, said Howard Hook, a certified financial planner and certified public accountant with EKS Associates in Princeton. “This return reconciles the amount of wages and federal taxes paid with the deposits made for those taxes,” he said. “If the W-2 showed an amount that was indeed not paid, there would be a discrepancy.”

It sounds like you've been trying to reach out to the company, but make sure that rather than calling the store where you worked, you contact the company's headquarters. Ask them to provide you with a corrected W-2 form if indeed a mistake was made, Hook said. “If they claim that you were paid for the other four days, you should ask them to provide proof that the payment was made and in what year,” he said.

The IRS states that you should always attempt to have your employer issue a corrected W-2 before filing a substitute W-2, known as Form 4852, said Gail Rosen, a Martinsville-based certified public accountant. This forms serves as a substitute W-2 and is completed by taxpayers when an employer does not give them a W-2 or an employer has issued an incorrect W-2. Rosen suggests you also make sure to keep all your written documentation if you file the 4852.

“If you believe that there is hope that you will eventually receive a corrected W-2 from your previous employer, you can always request an extension of time to file your 2012 tax return and pay any tax with the extension that you believe will be due,” Rosen said.

If you eventually receive a corrected W-2 that differs from the return you filed you, would have to file an amended tax return, she said.