By January 31 of each calendar year, F/EA submits Forms W-2 to consumers’ employees for wages earned in the previous calendar year. A employee receives an individual form W-2 for each employer for whom they work, as a distinct employer/employee relationship exists for each employer/employee relationship.
Forms W-2 are produced per Internal Revenue Code Section 3504, Revenue Procedure 70-6 and Revenue Procedure 2013-39. Each Form W-2 shows Federal and State taxable wages earned in the calendar year by the employee from the employer.
9. Prior to March 31, F/EA submits an electronic file of Forms W-2 to the Social Security Administration via their Business Services Online portal
10. A file of electronic Forms W-2 is produced per Social Security Administration publication EFW2
11. The file is uploaded to the Social Security Administration
12. After uploading the file, the F/EA receives a Transmittal Confirmation receipt
13. <<Staff Title>> saves Transmittal Receipt confirmation to <<File Path>>
14. Transmittal Receipt confirmation is saved for a minimum of 7 years per File Retention Policy
15. Also prior to March 31, reporting agent submits an electronic file of Forms W-2 to the State Department of Revenue in the required format
16. After submitting the file, a Transmittal Confirmation receipt is received
17. <<Staff Title>> saves Transmittal Receipt confirmation to <<File Path>>
18. Transmittal Receipt confirmation is saved for a minimum of 7 years per File Retention Policy
The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification. The methods of internal control utilized by F/EA in are:
F/EA issues Form W-2c for any Forms W-2 that were previously issued and must be corrected. Common reasons for issuing a Form W-2c include:
Forms W-2c must be submitted to the workers listed on the Form W-2. Corrected data, as shown on the Form W-2c, must be submitted to the Social Security Administration and the State Department of Revenue.
Whether or not the corrected W-2 data is submitted to the Social Security Administration and State Department of Revenue using the applicable W-2c process depends on when the error on the original W-2 is identified and the corrected W-2 issued. If the original W-2 data has not yet been submitted to the Social Secutiy Administration or the State Department of Revenue when the error is identified and the W-2c provided to the workers, the F/EA does not need to use the Social Security Administration or State Department of Revenue W-2c process. Rather, the F/EA can correct the data and submit corrected data to the Social Security Administration and State Department of Revenue with the F/EA's initial submission of W-2 data. This approach to correcting data is usually used after Forms W-2 have been issued to workers but before W-2 data has been submitted to the SSA or State.
If W-2 data has already been submitted to the Social Security Administration or State Department of Revenue when the error is identified, the F/EA uses the Social Security Administration's W-2c filing process and the State Department of Revenue's filing process.
In 2016, Forms W-2c can be effectively filed using the Social Security Administration's Business Services Online portal and following onscreen steps to submit W-2c data.
Each state has an approach to accepting W-2c data.
<<Insert F/EA Process>>
<<Insert F/EA Internal Controls>>
Per IRS regulation, household employees are only liable to pay Social Security and Medicare taxes (commonly referred to as FICA) if they earn wages from a single employer over a certain amount in the calendar year. Per IRS Publication 15, Circular E, in 2019, that amount is $2,100.
All adjustments for refunded FICA must be made using Form 941-X. A separate Form 941-X must be filed for each quarter in which FICA was withheld that is ultimately refunded. A Schedule R for Form 941 must accompany each Form 941-X showing the corrected wages and taxes only for those employers impacted by FICA refunding for the quarter.
Date discovered errors: 12/31/YYYY
Part 1, check Box 1 to apply the overdeposit to a future return (fastest way to get money)
Check Box 2 to get a check from the US Treasury (slow way to get money)
If you choose this method, F/EA can only correct overreported amounts on this 941-X and F/EA must complete a separate 941-X if F/EA is also correcting overreported amounts.
Part 2, check Box 3 and 3.a
Column 1 = F/EA's originally filed Form 941 less amounts for employees impacted by FICA Refunding
Column 2 = the amount originally filed on Form 941 for the quarter
Line 6: F/EA gross wages stay the same. The workers were still paid. It’s the Social Security and Medicare wages that will be adjusted. Yes, workers were paid, but the wages were not Social Security or Medicare Taxable.
Column 3 = the difference. This will also be F/EA's total amount for employees impacted by FICA refunding.
Line 8 – take it through like the other lines.
Column 4 is the sum of F/EA total workers and employer refunded SS tax for the quarter
Line 10 – take it through like the other lines.
Column 4 will also be the sum of F/EA total workers and employer refunded Medicare tax for the quarter
Lines 10 – 18 follow the remaining instructions on Form
The amount in line 18 is the amount of FICA refunded for the quarter
Half of this amount will be sent as a refund to the individual employees (their share of FICA)
Half of this amount will be refunded to the employer (almost always, this means refunding to the state)
Complete Section 21 to explain how you find the errors.
Also complete a Schedule R to accompany each Form 941-X. The Schedule R should include ONLY those employers affected by refunded FICA in the quarter for which the Form 941-X is filed.
The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.
F/EA reviews uncashed checks monthly. After <<one year>>, any checks that have not been cashed are removed from the bank reconciliation uncashed checks list (Account <<99999>>) and accounted for in General Ledger Account <<99999>> (See Policy and Procedure X.X).
10. All letters are mailed to workers
11. Some letters will be returned as “undeliverable”
12. After undeliverable letters are received, F/EA Accountant or <<Staff Title>> try to contact workers by phone to verify their addresses
13. Verify mailing address with each workers
14. Record that call is made in <<Customer Service System>>
15. pdate address in Payroll System
16. After verifying or updating address with each workers, send each workers the uncashed check letter
17. When vouchers are returned to F/EA, F/EA Accountant logs the date the voucher was returned in the Outstanding Check Issue spreadsheet
18. For all workers in the spreadsheet for whom a voucher has been received, F/EA Accountant approves re-issuance of the check value by completing the "Re-Issued Check Requisition Form"
19. For each returned, signed voucher, collect the voucher and the Re-Issued Check Requisition form
20. Provide these forms to <<Staff Title>> for review
21. Each check gets one form with the Check Requisition and the Letter
22. <<Staff Title>> reviews all supporting documents and Check Requisition form
23. <<Staff Title>> initials and dates Check Requisition form in lower right corner
24. <<Staff Title>> reviews letter and Check Requisition form
25. If errors do not exist, <<Staff Title>> signs and dates the Check Requisition form
26. F/EA Accountant interoffice mails the Check Requisition forms to Accounts Payable Department
27. F/EA Accounts Payable Department issues checks
28. Issued checks are submitted to F/EA Accountant
29. F/EA Accountant reviews checks received from Accounts Payable Department
30. F/EA Accountant enters “Reissued” in column <<B>> of the Check Issue spreadsheet at <<File Path>>
31. F/EA Accountant enters the reissued check number in column <<R>>
32. Filter spreadsheet by column B = “Reissued”
33. Copy all lines with “Reissued” in column B
34. Paste results to bottom section of spreadsheet where reissued checks are stored
35. <<Staff Title>> puts checks in envelopes
36. Seals envelopes
37. Delivers checks to outgoing mail box
38. Checks are mailed
39. By November of the calendar year, uncashed checks are reported to abandoned property for checks that are 3 years old or older
40. F/EA Accountant provides report of uncashed checks 3 years or older to F/EA Controller for reporting
41. F/EA Controller completes <<State Issued Report of Abandoned Property>>
42. If any payment is due to transfer the unclaimed property to the Division, F/EA Controller will make payment and submit original report and payment to Division of Abandoned Property
43. Copies of payment and <<State Issued Report of Abandoned Property>> are provided to <<Staff Title>>
44. Copies of payment and <<State Issued Report of Abandoned Property>> are scanned and saved to <<File Path>> for a minimum of 7 years per File Retention Policy
45. <<Insert process to appropriately update General Ledger and reconciliation documents>>
The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.
Independent contractors that are used in the participant-directed program must be issued Forms 1099-MISC when they meet certain criteria. The F/EA issues Forms 1099-MISC to contractors and submits copies of the Forms 1099 and Form 1096 (or electronic equivalent) to the IRS. Copies of Forms 1099 and Form 1096 (or electronic equivalent) are submitted to the state Department of Revenue (or equivelent) depending on state rules.
Forms 1099-MISC should be filed per instructions and rules for the form, which can change from year to year.
Not withstanding other Form 1099-MISC instructions, Forms 1099-MISC will generally be issued to independent contractors by the F/EA under the following circumstances:
Forms 1099-MISC generally must be submitted to payees by January 31 of the year following the tax year reported on Form 1099-MISC.
The F/EA submits to the IRS copies of all Forms 1099-MISC and a completed Form 1096 by February 28 of the year following the tax year reported on Form 1099-MISC. If the F/EA issues 250 or more Forms 1099-MISC, Forms 1099 must be filed electronically by the IRS. In this case, a Form 1096 is not required. Electronic Forms 1099-MISC are due to the IRS by March 31