Employers often must use Form W-2c, Transmittal of Corrected Income and Tax Statements, to correct Form W-2, Wage and Tax Statement, but sometimes reissuing a corrected W-2 is all that is needed, speakers said May 7 at the 2013 American Payroll Association Congress in Grapevine, Texas.

When correcting Form W-2, employers must first ensure that it has a form for employees to complete, sign, and date when they think that their W-2s are incorrect, said RosemarieFraumeni, payroll manager for American Dental Partners Inc. Employers should have employees indicate on this request form  what they think is wrong on their W-2s and have them attach supporting documents such as copies of their W-2s and their last pay stub, she said. Getting documentation from employees helps make sure that the W-2 is actually incorrect and the problem is not that the employee misunderstands a correct amount, she said.

Including on the request form a processing date can aid a timely return of the form by the employee, she said.

Whether Form W-2c is required depends on whether the need for correction is discovered before the W-2 has been filed or after it has been filed, said Daniel Dycus, director of global payroll and commissions for LivingSocial. If a W-2 needs to be corrected before it is filed, and employers have the ability alter the form before submission, then Form W-2c is not required. “Corrected” should be written on the corrected W-2 and then the form is sent to the employee, Dycus said. Form 941-X may also be required in this situation, he said. If W-2 processing is outsourced, then employers probably cannot alter W-2s before submission and likely will have to use Form W-2c, he said.

When Forms W-2 have already been filed but must be corrected, employers must use Form W-2c, Dycus said. Employers usually must also submit Form W-3c, Transmittal of Corrected Income and Tax Statements, along with Form W-2c. Employers must explain on Form W-3c why Forms W-2c and W-3c are being submitted, and they should use a different Form W-3 for each batch or reason, he said.

Some situations do not require using Form W-2c, such as when the form merely has to be replaced, Dycus said. If the W-2 has been returned in the mail because of a wrong address, payroll should make a copy of the returned envelope and the incorrect address notice to prove that it was mailed, he said. Then put the original form and returned envelope in a new envelope and mail it to the new address, he said.

If an employee has lost the W-2, then the form should be reprinted, “reissued statement” should be written on it, and it should be sent to the employee, Dycus said. Although the Internal Revenue Service does not require putting the phrase on the form, doing so is a good practice for recordkeeping purposes, she said. In addition, having a self-service portal through which an employee can reprint the forms themselves can reduce administrative time, he said.

Employers should be aware that they are allowed to charge for a reissued W-2, Dycus said. Charging a fee for reissuing W-2s can reduce the amount of forms reissued because it give  employees an incentive to search more thoroughly for forms and keep better track of them, he said.

By Allison M. Gatrone