What to Do If You Received a W-2c Form
Just when federal employees thought they were done dealing with the 2020 deferral – and repayment -- of their Social Security taxes, one more tax form shows up in the mail to cause even more confusion.
For those federal employees who were forced to have their Social Security taxes deferred the last few months of 2020 and pay them back in 2021, you may have recently received an IRS Form W-2c, a corrected wages and tax statement, for 2020.
The purpose of this document is to correct box 4 to reflect that the taxes you didn’t pay in 2020 were paid in 2021, by increased withholdings in your 2021 paychecks. If you only had one employer in 2020 and the only correction the W-2c makes is to box 4, then the IRS says no further action is required because there is no impact on your 2020 tax filing. Hopefully, this will be the last thing you have to worry about when it comes to the deferral.
However, if you had two or more employers in 2020 you may have paid too much in Social Security taxes. If the amount of Social Security taxes withheld by ALL of your employers in 2020 exceeded the maximum amount of $8,537.40, you may be required to file a Form 1040-X, an Amended U.S. Individual Income Tax Return. That allows you to claim a credit for the excess taxes withheld.
Click here for information from the IRS to help determine if you need to file an amended return.