Payroll Mailbag

What do we do with a valid, but wrong, SSN? And does an uncashed paycheck impact W-2 reporting?

In the mailbag this month …

November 18, 2015

We answer questions about reporting payments to an ex-employee and whether gifts given to employees out of “affection or respect” are still taxable.
The mailbag this month holds questions about FICA and a quirk in the 2016 calendar.

Are health deductions required deductions for garnishment? And must we tax employees who are paid to forgo health benefits?

Here are questions put to reps from federal agencies at the American Payroll ­Association’s Annual Congress, held this year in Las Vegas.

This month we return to Las Vegas and the American Payroll Association’s 33rd Annual Congress to cover questions fielded by reps from the Department of Labor.

Here are answers to questions put to representatives of the IRS who attended the American Payroll Association’s 33rd Annual Congress, held this year in Las Vegas.
Q: We currently reimburse employees who use their own cellphones to make business calls, but then add back those amounts as taxable pay. HR wants us to stop this practice and make those reimbursements a tax-free fringe benefit. Don’t the accountable plan rules apply here?
Q: It’s likely that later this year, one employee will receive a bonus that will boost his supplemental pay to more than $1 million. In anticipation of that, his accountant has informed us that we don’t need to withhold federal income taxes at the 39.6% rate; the employee will pay the tax on his 2015 Form 1040, instead. Is that right—it sounds fishy to us?
Q: A new employee received a signing bonus last November, which he had to repay if he left the company within two years. He did leave, and now we don’t know what to do. Do we need to amend his 2014 W-2 form? What documentation must we collect from him?