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by Scott Donnelly, CPA
My father is the sole proprietor of his business. Unfortunately, he was listed as an employee and had to file Form 941 X for three quarters to correct the error. Does he need a W2 Form along with a W3 Form for filing income tax?
If the 941X was issued to remove your father from the originally filed Form 941s and all related withholding was returned to your father, a form W2 does not need to be issued. If he didn’t have any employees and all the related payroll tax forms were completed and amended reporting no payroll or withholding (therefore no W2 is issued), a W3 is not necessary. If your father has employees, then W2s and a W3 are required to report their income and withholding.
If he gets a notice requesting a W2, send a written response explaining the situation along with copies of the 941X to show he didn’t receive wages or withhold payroll taxes.
Scott Donnelly is a Torrance, California, CPA and a partner in the firm of PDM CPAs. You can reach him at firstname.lastname@example.org or (310) 802-7832.
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