Guest YvonneT Posted February 1, 2012 Posted February 1, 2012 What a mess.... An eligible participant elected to have a dollar amount deferred each pay starting in September 2011. The sponsor deposited the $ amount each pay into the deferral account of the participant. In January 2012 (after all January 2012 deposits have been made) the sponsor realizes that the payroll company never withheld any $ from the participant's pay. The W2 will show no withholding for 2011. How do they correct this?
QDROphile Posted February 1, 2012 Posted February 1, 2012 Give the employee a raise effective 2011 equal to the amount of the deferral. The FICA wages will need to be increased and additional FICA taxes paid for 2011.
david rigby Posted February 1, 2012 Posted February 1, 2012 Fire payroll company? Hey, just kidding. The "fault" probably lies with whoever gave (or should have given) instructions to payroll vendor. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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