CCA 200928040: Corrected Forms W-2c are required after Medicare tax refunds

Plain-English summary

Chief Counsel identified Treasury Regulation section 31.6051-1(c) as the best authority requiring corrected Forms W-2c after Medicare tax refunds. The quoted regulation requires a corrected statement when a prior-year employee statement reported incorrect wages or section 3101 tax, regardless of the reason for the error or the correction method. It also covers current-year adjustments of earlier overcollections or undercollections of employee tax.

Ruling snapshot

• Question: Must an employer issue corrected Forms W-2c reflecting Medicare tax refunds?
• Outcome: Advice given that corrected statements are required
• Key authorities: IRC §§ 3101, 3121(a), 6051; Treas. Reg. § 31.6051-1(c)

Full text (IRS public release)

ID: CCA_2009052914162132 Number: 200928040

Release Date: 7/10/2009

Office: -------------

UILC: 6051.00-00

From: --------------------

Sent: Friday, May 29, 2009 2:16:25 PM

To: -----------------

Cc: ----------------

Subject: Requirement to file W-2Cs reflecting Medicare tax refunds

I think the best authority for the requirement to issue Forms W-2c is in the Regulations at 31.6051-1(c):

(c) Correction of statements. - (1) Federal Insurance Contribtions Act. - If (i) the amount of employee tax under section 3101 deducted and withheld in the calendar year from the wages, as defined in section 3121(a), paid during such year was less or greater than the tax imposed by section 3101 on such wages by reason of the adjustment in such year of an overcollection or undercollection of the tax in any prior year, or (ii) regardless of the reason for the error or the method of its correction, the amount of wages as defined in section 3121(a), or tax under section 3101, entered on a statement furnished pursuant to this section to an employee for a prior year was incorrect, a corrected statement for such prior year reflecting the adjustment or the correct data SHALL be furnished to the employee. . . "