Year end W2's etc

[spanel]

I have a client that closed in April and had money at the time. I told them what my fees would be to finish the year and final Corp returns. I did a few months, closed payroll accounts before I stopped working on their account because they never paid. Now there are out of money and owe me over $1000.

All the formal employees know that I worked on payroll and are starting to ask me about W2s.

What would you do??

Thanks!!

Chris

[Rapid Robert]

"employees know that I worked on payroll and are starting to ask me about W2s"

What are they asking? Tell them W-2s aren't due until Jan 31st and they should contact their (former) employer with any questions. (It's too bad the employees even know who you are...).

I would not perform any further work without a signed engagement agreement and a significant (if not 100%) payment against balance due for work performed. It depends on your history with this client, I suppose -- are you the only vendor who is not being paid? What is their plan?

[TaxGuyBill]

Tell them W-2s aren't due until Jan 31st

I haven't heard of anybody actually doing this, but it sounds like they are probably late now. From the W-2 Instructions:


Terminating a business.

If you terminate your business, you must provide Forms W-2 to your employees for the calendar year of termination by the due date of your final Form 941, 944, or 941-SS. You must also file Forms W-2 with the SSA by the due date of your final Form 941, 944, or 941-SS. If filing on paper, make sure you obtain Forms W-2 and W-3 preprinted with the correct year. If e-filing, make sure your software has been updated for the current tax year.

https://www.irs.gov/instructions/iw2w3#en_US_2023_publink1000308310

But I agree that spanel should direct the employees to the former employer/owner.

[Rapid Robert]

When to file the "final" Form 941 is pretty arbitrary, as you can file intermediate quarterly returns showing no wages paid until the end of the year if you wish. Likewise, if the corporation simply went dormant for the second part of the year, I don't think there is a penalty for filing a calendar year return instead of a short year. Now, if you have gone through the process of dissolving the corporation with the state, then I'd say you have truly ended the business at that time and can no longer draw it out.

"If none of these exceptions apply and you haven't filed a final return, you must file Form 941 each quarter even if you didn't pay wages during the quarter. Use IRS e-file, if possible."

However, I recall reading somewhere in the instructions that an employee can request a W-2 within 30 days of their last payday if they terminate employment before year end. But again, I suspect it is pretty rare to actually happen (as you say), especially since most employees probably don't know about it.

The 2022 W-2 forms have been available since at least last April so that is not an obstacle.

[TaxGuyBill]

Yeah, I agree the "final" 941 is probably flexible. But spanel said he closed out payroll accounts ... I'm not sure if that included filing a final 941 or not.

Yeah, the 30 day request by an employee was the first thing that popped in my mind. I was looking that up, when I found the "terminating a business" thing. :-) The employee thing seems to be that they can request it anytime after leaving the company, and the employer needs to provide it within 30 days.