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End of year tax filing query

We are a NY based company, and have changed payroll companies at the end of April. The old payroll company has said that if they file our 940/ W2s at the end of the year and it arrives before the new company's 940 W2, then the second filing will be rejected. Is this correct?


  • Generally, yes, they are correct. When you started with your new payroll company, did you provide the wages you had paid to your employees from January through April? Normally your new payroll company would enter those wages into their system so that only one set of returns is filed at the end of the year. Those wages are also needed so that taxes that have limits aren’t overpaid. There can be exceptions, such as if you were actually with a PEO and not a regular payroll company. Best thing to do would be to contact your new company and make sure they have entered the wages from the old company.

  • rrupertrrupert ✭✭✭

    agree that usually you would have wanted to load YTD amounts along with QTD amounts, especially when keeping the same EIN. However, I do know some payroll companies that refuse to take responsibility/liability for prior payroll numbers/tax reporting.

  • End of April is mid-quarter. All payroll providers I have worked with would have a big problem with that. And it makes filing the quarterly reports overly interesting since neither provider has a clue what the other provider did during the shared quarter. And someone needs to sign the quarterly reports and attest to the accuracy.

    And I have worked with payroll providers who would have had trouble doing the W2s for any year they did not handle all transactions. It is very common for the service providers to tell the employer that you made the mess, you get to clean it up.

    There is a famous payroll quote that "changing payroll providers/systems mid-year is like changing the tire on a moving car". Worth avoiding when possible.

  • Two different problems here - both solvable. 941 Forms and W-2 Forms. All sorts of other things to consider as well. Based on what David, rrupert and others have stated (never experienced it myself, but if I were the payroll service provider, I would not want to accept responsibility for what another provider did or count on being given accurate information, whether from the provider or the employer.

    For the mid quarter problem, there are a couple of options. 1) don't let either provider file a 941 for the second quarter, but send them to you. - combine the two and file one yourself. Watch out for wage bases such as SS tax, Unemployment (state and Fed) and additional Medicare tax (and any fringe benefits) Those will have to be communicated to the new provider anyway). Or, if the first 941 was already filed, let it go and prepare a Form 941-X for the remainder of the quarter. Watch out that the first provider does not mark the form "Final Return".

    You may have similar problems with other filings the third party does, such as state unemployment.

    For the W-2 Forms, multiple filings for the same employee are OK with the SSA - they are added together - and corrections are made with Form W-2c. This is different from 1099-Forms where the corrections are made with a corrected box checked on a new 1099 and which replaces the original 1099 with the subsequent 1099.

    You do have to reconcile the 941 Forms.

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