W-2 Wage and Tax Statements

It is the policy of the State of North Carolina to issue accurate W-2 Tax and Wage Statements as required by federal and State of North Carolina regulations.

G.S. 143B-426.39 Powers and Duties of the State Controller

G.S. 105 Taxation

IRS Publication 15 Circular E

Various federal rules and statutes*

The W-2 Wage and Tax Statement form is issued by January 31 each year.  It reports the amount of taxable wages paid during the previous calendar year and the amounts withheld for state, federal and FICA income taxes as well as reportable deductions. All state employees that earned wages in the prior calendar year will be issued a W-2 form in January.

W-2 forms are mailed by Central Payroll to the individual agencies in advance of the January 31 deadline. The employing agency is responsible for distributing the forms to the appropriate employees.  In special cases, an employee may be required to pick up a W-2 form directly from the Central Payroll Division.  No W-2 forms will be released to an employee without the presentation of valid picture identification.  Under no circumstances will W-2 forms be faxed to an employee.

Multiple Employers

Individuals employed by different state agencies during a calendar year will receive only one W-2 form if the employing agencies process payroll through the Central Payroll System. If the agencies utilize different payroll processing systems, the employee will receive a W-2 from each of the agencies. 

Individuals that have multiple employers in a single year that operate different payroll systems will have different wage bases for FICA tax withholding. Consequently, employees that receive multiple W-2s and have total FICA subject wages in excess of the maximum earning limit may be due a refund of over-withheld FICA taxes.  Over-withheld FICA taxes are refunded to the employee when the employee files a federal income tax return for the year.  Information on the current FICA maximum earnings limitation is located at:

http://www.ncosc.net/sigdocs/sig_docs/payroll/OSCPXA09_2005_Quick_Tax_Calculation_Sheet.pdf

Replacement of W-2 Form

Any employee that does not receive a W-2 by January 31, or has an original form that is illegible or is lost, must contact their agency payroll office to request a replacement form.    

Limitations on Replacements

Employees can request replacement W-2 forms for up to three previous calendar years without backup documentation.  For employees that are still active on the payroll system, agency payroll staff can generate a new W-2 form online.  Agency payroll staff must submit a written request to the Central Payroll Division for replacement W-2's if the employee is no longer active on the payroll system.

Individuals requesting a replacement W-2 form for years prior to the three previous calendar years must provide an audit letter from the IRS or NCDOR indicating the years for which replacement W-2 forms are needed.

Incorrect Name or Social Security Number

Corrections to W-2 forms are processed when an employee identifies an error on the original form(s) related to an incorrect name or social security number.  The employing agency must submit a request to the Central Payroll Division for the issuance of a W-2C Corrected Wage and Tax Statement form using the following:

• Form OSCPXAW2C, Request for Issuance of W-2C Form
• A clear photocopy of the employee's social security card
• A copy of all W-2 forms issued to the employee (if there are multiple forms)

Employees should retain the original incorrect form(s) because both the original and the W-2C forms must be submitted when the appropriate tax documents are filed by the employee.

W-2C forms are distributed in the same manner as the original W-2 form. Under no circumstances will W-2C forms be faxed to an employee.

More information about W-2C forms is available under the Payroll Forms topic located at:

http://www.ncosc.net/sigdocs/sig_docs/payroll/index.html

Overpayments to Employees

Payments made to an employee in error in a prior year remain taxable to the employee for that year.  This is because the employee received and had use of those funds during that year.  The employee is not entitled to file an amended return (Form 1040X, Amended U.S. Individual Income Tax Return) to recover the income tax on these wages.  Instead, the employee is entitled to a deduction (or a credit, in some cases) for the repaid wages on Form 1040 for the year of repayment.

The employee is, however, entitled to a W-2C in the year in which the repayment is made.  The W-2C will not adjust the employees taxable wages, but will adjust the wages subject to FICA tax.  As an overpaid employee repays the amount owed to the agency or university, the Central Payroll Division should be notified using the following:

• Form OSCPXAW2C, Request for Issuance of W-2C Form
• Payroll register pages containing the adjusted amounts reportable
• A copy of the W-2 form issued to the employee
• A signed Waiver Letter relinquishing any personal claim for reimbursement

Taxable Wage Adjustments

Corrections to W-2 forms are processed when the payroll agency staff identifies that an employee has been processed with incorrect income taxable wages.Incorrect taxable wages are usually the result of one of the following:

• Taxation of foreign national payments that are legally exempt from income tax
• Reported taxable earnings that include payments that were not due an employee, were not received by the employee, and are returned to the Central Payroll Division for cancellation
• Taxable wages reported for a deceased employee that were made after the date of death but recorded in the same year as the employees date of death

The employing agency must submit a request to the Central Payroll Office for the issuance for a W-2C Corrected Wage and Tax Statement form along with the following:

• Form OSCPXAW2C, Request for Issuance of W-2C Form
• Payroll register pages containing the adjusted amounts reportable
• A copy of the W-2 form issued to the employee
• A signed Waiver Letter relinquishing any personal claim for reimbursement

FICA Tax Adjustments

A W2-C form is issued for any overwithheld FICA taxes if notification of the overwithheldamounts is submitted to the Central Payroll Division within three years of the date of the incorrect W-2 Form. The employing agency must submit a request to the Central Payroll Office for the issuance for a W-2C Corrected Wage and Tax Statement form using the following:

• Form OSCPXAW2C, Request for Issuance of W-2C Form
• Payroll register pages containing the adjusted amounts reportable
• A copy of the W-2 form issued to the employee
• A signed Waiver Letter relinquishing any personal claim for reimbursement

The waiver letter is available at:

http://www.ncosc.net/sigdocs/sig_docs/payroll/OSCPXA16.xls

Employees should retain the original incorrect form(s) because both the original and the W-2C forms must be submitted when the appropriate tax documents are filed by the employee.

Distribution of Corrected Forms

W-2C forms are distributed in the same manner as the original W-2 form. Under no circumstances will W-2C forms be faxed to an employee.

This policy applies to all State entities.

There are no exceptions to this policy.

There are no special terms for this policy.

*For information on applicable federal rules and statutes please contact the Central Payroll Division.