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W2 De Minimis safe harbor rule notification - IRS N-17-09

Does anyone have a sample of the de minimis notice to employees or a sample of the form you have employees complete if they want a W2 even if it meets de minimis guidelines (Not more than $100 in earning / $25 in withholding).
I have also read it is advisable to post something for employees on the process (eg: on the Company's intranet) has anyone done so? Can you share a sample of the notice to employee or any form you have the employee sign.

As always the knowledge and guidance from people on the forum is appreciated.

corie

Comments

  • rrupertrrupert ✭✭✭

    I'm reading that notice to state it is a safe harbor for correcting de minimus Errors, instead of not providing W-2s for de minimus amounts. I admit to just skimming it, but I've never heard of being able to not provide a W-2 regardless of the income or withholding amounts.

    corie
  • David WarrenDavid Warren ✭✭✭✭

    Agree with rrupert.

  • Below is some more information on the new safe harbor. Information was gathered from APA webinars, a webinar from a big 4 account firm and ADP. Hope this helps.

    Starting with tax year 2016 (filed in 2017), there is a new de minimis error safe harbor
    that waives the information reporting penalty for small-dollar errors of no more than
    $100, $25 for withholding taxes. Note, however, that there is one significant limitation —
    employees have the right to request a Form W-2c for these small errors, and employers
    must notify them of this right.

    https://www.adp.com/tools-and-resources/adp-research-institute/insights/insight-item-detail.aspx?id=434672c0-3868-4560-a4ba-750cf0c83947

  • David WarrenDavid Warren ✭✭✭✭

    I am not disagreeing with what is posted. However, I do not thing I have seen an employee whose sole annual wages were De Minimus. It makes me nervous about the particulars.

    rrupert
  • The de minimis safe harbor is related to W-2 forms that have been filed that have small errors in money amounts. the idea is that with the accelerated due date for filing, more of these errors would not be caught and corrected before filing - it is about penalty relief for employers where they filed timely but there were small dollar amount errors.

    See IRS Notice 2017-09 in IRB 2017-04 at https://www.irs.gov/irb/2017-04_IRB#NOT-2017-09
    It contains the specifications for employer policy regarding employee request for a corrected information return and other information helpful to employers including recordkeeping requirements. If you have not seen it, take a look at it. It also applies to other information returns such as 1099 Forms.

  • oops did not realize that you had read the IRS notice - the notification to employees will include the procedure for making the election that your company adopts within the IRS guidelines. The save harbor only applies to info returns that were timely filed but contained inadvertent small errors in dollar amounts.

    There is a potential for not having to file a Form W-2 for an employee - from the instructions for Form W-2 and W-3

    Complete and file Form W-2 for each employee for whom any of the following applies (even if the employee is
    related to you).
    You withheld any income, social security, or Medicare tax from wages regardless of the amount of wages; or
    You would have had to withhold income tax if the employee had claimed no more than one withholding
    allowance or had not claimed exemption from withholding on Form W-4; or
    You paid $600 or more in wages even if you did not withhold any income, social security, or Medicare tax.

    Only in very limited situations will you not have to file Form W-2. This may occur if you were not required to
    withhold any income tax, social security tax, or Medicare tax and you paid the employee less than $600, such as for
    certain election workers and certain foreign agricultural workers. See Election workers and Foreign agricultural
    workers, later.

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