Special Req.

[former_member304708]

Client has a scheme which similar to 401k for certain employees. Evey pay cycle certain amount is deducted and sent to a vendor.

When employee is disbursed Vendor pays to the Employee, after with holding Fed, State and local taxes . (Vendor only calculates and Fed and State taxes. Client calculates Local taxes using some software and provides it to the Vendor for withholding).

Employee is issued a W-2 from the Vendor for disbursement he receives.

Client issues W-2 as usual.

Requirement is: Local Taxes should be reported to Client's W-2. This is be a flat dollar amount.

What is a best approach for this?

[Former Member · Accepted solution]

You can use an info type 0221 adjustment to enter both the taxable wage amounts and the taxes withheld for the local taxes to be reported on the employer W2.

It seems unusual that the third party reports federal and state on their W2 (or more correctly I am guesing a 1099 misc) and not the local taxes. Is the employer remitting the local taxes for this disbursement made by the vendor to the locaility? Whoever is the one remitting the taxes should be reporting them and it seems strange that the third party is not doing it since they do the federal and state.

[former_member304708]

@ Amosha - Sorry for not expressing clearly. Will be more clear further.

@Laura - Thank you for the solution. We worked through a similar solution.

[former_member304708]

Anyone?

[Former Member]

Is this happening in you SAP system where the payroll is processed? is the w2 generated in SAP?

When you open a thread with less info or unclear info ...it is difficult to understand. Patiently read what you have written...it is very hard to understand the scenario. That's the reason you don't see any response. Please update.