Must an employer wait until an employee pays back the full amount of a wage overpayment via pay deductions spanning several years before filing Forms 941-X and W-2c?

Author: Alice Gilman

No. An employer should not wait until an employee pays back the full amount of a wage overpayment that will be gradually repaid by pay deductions over the course of several years before filing Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund, and Form W-2c, Corrected Wage and Tax Statement. However, the employer must wait until the employee pays back the amount for one year before filing the forms for that year. The employer must file the forms for each year, with the IRS and the Social Security Administration, respectively.