Early heads up on 2021 W-2s, W-3s, etc.

In 2021, you find not only the percentage method and wage bracket method withholding tables in 2021 Publication 15-T, Federal Income Tax Withholding Method, but also the amount to add to a nonresident alien employee’s wages to determine FITW.

 The 2021 Form W-2, 2021 Form W-3, and 2021 W-2/W-3 instructions include how to handle COVID-19- related employment tax credits. n

·         You may see discrepancies in your 2021 Forms W-2/W-3 v. Forms 941/944 reconciliation if your firm took COVID-19 tax relief in 2020. Qualified sick leave and family leave wages are not subject to the employer share of social security tax. Also, deferred employee social security tax is reported on Forms 941 and 944—but not on the W-2 or W-3. n 

·         With respect to reporting deferred 2020 employee SS tax, under Notice 2020-65, SS tax withheld in 2020 and not reported on the 2020 W-2 will be reported on a 2020 W-2c in Box 4, using Box c to indicate the tax year—in this case, 2020.

 2021 Forms W-2c should be filed with the Social Security Administration, along with a W-3c, as soon as possible after withholding the deferred amounts. For details, see the IRS’s reporting deferred 2020 SS tax under Notice 2020-65