Do NYC employers have a legal responsibility to correct in an incorrect w2. For 2012 in a timely fashion.

Asked over 1 year ago - Westtown, NY

Also my accountant told me I would have to pay a sum of $10,000 in taxes (federal and state) for taking out a NYC pension loan for $25,000. Is that reasonable.

Attorney answers (4)

  1. Ryan M. Finn

    Pro

    Contributor Level 13

    3

    Lawyers agree

    1

    Answered . Generally yes. An incorrect W2 must be fixed.

    Ryan Finn * 518.213.0115 * Rfinn@hackermurphy.com * Referrals are the highest form of compliment * Hacker... more
  2. Vincent Peter White

    Contributor Level 18

    2

    Lawyers agree

    1

    Answered . I cannot speak as to your tax question, but all employers have a legal duty to correct incorrect W-2 forms. Contact the IRS and New York State Department of Taxation immediately if your employer refuses to do so.

    This answer does not constitute legal advice and you should contact an attorney to confirm or research further any... more
  3. Michael Gary Kushner

    Contributor Level 7

    1

    Lawyer agrees

    Answered . I am assuming that you are saying that you have taxable income for 2012 in the amount of $25,000 due to the fact that you defaulted on a loan from your pension plan with a $25,000 balance outstanding. Pension loans that are repaid in a timely manner do not generate taxable income, however, hardship distributions, which are not repayable to the plan, do generate federal and state income tax and generally also a 10% federal early distribution penalty tax. If defaulting on a loan from a tax-qualified pension plan and having to recognize $25,000 in additional income for 2012 is the issue and this is what is generating the extra $10,000 in tax liability (federal income tax, state income tax, plus applicable penalty tax), then you need to make payment to the IRS and the relevant state tax authorities in a timely manner or else face additional penalties and interest charges.

    Note, however, that your Form W-2 supplied by your employer may NOT be incorrect simply because it does not rec=flect the $25,000 defaulted loan amount as additional taxable income on Box 1 (wages) or on any other box of Form W-2. employers and their pension plans report plan distributions, including defaulted loan amounts, which are deemed "constructive distributions" on Form 1099-R, not on Form W-2. You may wish to ask your employer's payroll department or accountant if they pan to send you a Form 1099-R reflecting the additional income from the defaulted pensin loan if this is indeed what occurred--I'm kind of surmizing from your question that this is the case.

  4. Steven M Zelinger

    Pro

    Contributor Level 20

    2

    Lawyers agree

    1

    Answered . Yes, an employer must correct a W2 if it is wrong. If the pension loan was taxable income, yes you should withhold taxes for it.

    This is not legal advice nor intended to create an attorney-client relationship. The information provided here is... more

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

25,999 answers this week

2,780 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

25,999 answers this week

2,780 attorneys answering