Tax question - help please

[ajh88]

So I guess I don't really need help because we are just out of luck, but we had a situation arise that has literally NEVER happened to me in the 15 years I've been filing taxes. My DH quit his job on December 20, 2008. The pay periods at that company were 1st-15th then 16th through 30/31 and they got paid twice a month - like the 10th and 25th usually. This is the best of my recollection, but it went approximately like that.

Anyway, we get a W2 today for $400 from the company for 2009 income??? We didn't assume he had any income for 2009 - he quit working there in 2008. They claim since he actually received the paycheck in 2009, they have to report it as 2009 income. It doesn't sound or seem right to me, but I'm no accountant, nor am I a tax expert. I have had several jobs and I don't recall ever having a "dangling" W2 from a different year.

Ultimately, I guess my question is this - is income reported based on the year you earned it, or the year you actually receive it, when it happens to span a new year? It isn't that much money and won't jack up our taxes too badly - but it was earned in a different state so I'll have to do an EXTRA state return I think, even though we haven't lived there in over a year. Ugh.

 

[lisa3635]

It's reported in the year you receive it because you are cash basis. It sounds like he may have been paid 1/1/09.

 

[pixiewings71]

According to my company it's supposed to be reported as income for the previous year. So if he quit in 2008 it should have been included in his 2008 W2.

 

[Tina]

It doesn't matter when you worked. What matters is the date you were paid. If he was paid AFTER 12/31/08, then its 2009 income. For example, I worked all year long, Jan 1 through Dec 31. We get paid every two weeks. Our last pay day in December was December 24. So my W2 will only include wages through that paycheck. My next paycheck was paid on January 8th. Even though it covered labor I performed in late December, it falls into my 2010 W2 wages. His employer is correct.

 

[Tina]

According to my company it's supposed to be reported as income for the previous year. So if he quit in 2008 it should have been included in his 2008 W2.

Not if he didn't get paid until 2009.

 

[Claire&TheBoys]

It doesn't matter when you worked. What matters is the date you were paid. If he was paid AFTER 12/31/08, then its 2009 income. For example, I worked all year long, Jan 1 through Dec 31. We get paid every two weeks. Our last pay day in December was December 24. So my W2 will only include wages through that paycheck. My next paycheck was paid on January 8th. Even though it covered labor I performed in late December, it falls into my 2010 W2 wages. His employer is correct.

This is exactly right. The date on the check determines what year the wages are counted, not the pay period. I work for a CPA firm and do lots of payroll and we ALWAYS go by the date on the check for posting checks to our system. It is the only date that matters.

OP, sorry it's going to make more work for you.

 

[robsmom]

OP: as stated it is 2009 income. That said, the w2 should also show any taxes withheld so there is a good chance you will not really own anything on it. I assume that you do not live in the state that he worked in. Many states have minimum dollar amounts or hrs that a person has to work in order to be required to file a non-resident return. Others require you to file on the 1st dollar earned in that state. google the tax code for the state and see if you have to file.

 

[ajh88]

Thanks for all the input! I guess neither one of us had ever left a job right at the end of the a year before which is probably why it had never come up before. I'm glad the W2 came today though - I probably would have just filed our taxes without it. Now THAT would have been a headache!

And thanks also for the advice Robsmom - I'll check the tax code to see if I need to file a state return or not.