With the IRS' January 31, 2002 W-2 mailing deadline fast approaching, W-2 forms will be arriving soon at the homes of millions of employees across the nation. For most, this form is the bedrock on which the 1040, 1040A or 1040EZ income tax form is completed. But with the economy in recession since March of last year, bankruptcies reached record levels in 2001, placing some individuals in the unenviable position of needing a W-2 form from a business that has already locked its doors, liquidated its assets, and ceased to exist.
"I breathed a sigh of relief when I saw my W-2 in the mailbox," says one former tech employee, whose firm closed its doors in September after 16 years of operation. "Until then, I was fearing the worst. I had no one I could have called. The whole operation, with 30 employees, is gone. Fortunately, we had a very good human resources manager who must have taken care of things before he left."
Some are less fortunate, forced to reconstruct withholdings and income from pay stubs. Frequently, the critical tax data needed for a successful filing is provided on an employees final pay stub. To-date totals for Federal, State, Local, Social Security and Medicare withholdings are often printed with each paycheck, and can be invaluable when a W-2 is not provided and the former employer cannot be reached due to bankruptcy.
For a person without a W-2, the filing process can be significantly more difficult, and, for those who are due a refund, delays should be expected. The IRS, through its TeleTax system, offers instructions on how to proceed if an employer fails to provide a W-2. If no W-2 is received by February 15, 2002, the IRS recommends that the former employee file a W-2 complaint by calling 1-800-829-1040.
In cases where no W-2 can be recovered, a Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc., can be submitted instead.
If a final pay stub with to-date pay and withholding information is available, finishing a Form 4852 can be fairly easy. Without one, however, best estimates must be calculated for the total income and amounts withheld. Explanations of what actions were taken to obtain a W-2 and what process was used to determine the submitted income and withholdings must also be included.
Ultimately, regardless of the status of an individual's W-2 forms, a return must be filed. If later revelations indicate that the numbers on a Form 4852 are incorrect, an Form 1040X, Amended U.S. Individual Income Tax Return, will be required.
For former employees, it can just add stress to an already challenging situation, "Because my company folded, I had to move to another city to find a new position, live apart from my family for six months, pay for two households until they could join me. This whole thing is just one more headache I don't need."