Just a heads up that there's a MUCH cheaper alternative if you only have one or two household employees. I use the IRS's free Fillable Forms W-2/W-3 program which is separate from BSO and worked perfectly even when BSO was giving me errors. Google "SSA Fillable Forms W-2 W-3" and it should be the first result from the ssa.gov site. The interface is super basic but it lets you generate properly formatted W-2s and W-3s that you can print. For Copy A (the red form), you still need to order the official paper stock from the IRS or an office supply store, but you can print all the employee copies on regular paper.

I feel your pain with the BSO system! I went through the exact same nightmare last year with my part-time housekeeper's W-2. The BSO site kept eating my EIN information and giving me those cryptic error messages. What finally worked for me was a combination approach: I used the SSA's free Fillable Forms system (mentioned by Isla) to generate the W-2s, then called my local IRS Taxpayer Assistance Center directly instead of the main hotline. The local office was way more helpful and actually walked me through registering my EIN properly over the phone. For your nanny's immediate needs, you can give her a copy of her final paystub along with a handwritten summary of her total wages and withholdings for the year. This won't replace the official W-2, but it'll help her get started on her taxes if she's in a rush. She can always amend later once you get the proper forms sorted out. The penalties for late W-2s are definitely annoying but not devastating - I ended up paying $60 since I got mine out within 30 days of the deadline. The key is just getting it done as soon as possible rather than continuing to fight with broken systems!

This is such a common source of confusion! I went through the exact same thing when I started freelancing for US companies from Toronto. The key thing to understand is that there's a difference between where your income is "sourced" for tax purposes and what documentation the US company needs to have on file. You're right that your income is sourced to Canada since that's where you're physically performing the work, which means you won't owe US taxes on it. However, the US company still needs the W-8BEN form as proof that you're a foreign person not subject to US withholding tax. Think of it this way: without the W-8BEN, the default assumption is that they need to withhold 30% from your payments and send it to the IRS. The form is what tells them "hey, this person is Canadian and exempt from withholding under the tax treaty." I'd definitely recommend filling it out. It only takes about 10 minutes and it protects both you and your client. Plus, many US companies won't even process payments to foreign contractors without having this form on file first.

I'm dealing with this exact same situation right now! I'm a Canadian web developer working for a tech startup in Silicon Valley, and I was also confused when they sent me the W-8BEN form. After reading through all these responses, it's clear that filling out the form is the right move. What really helped me understand is the distinction between where your income is "sourced" (Canada, since that's where we're doing the work) versus the documentation the US company needs to avoid withholding taxes from our payments. One thing I'd add is that when you fill out Part II of the form to claim treaty benefits, make sure you reference Article VII of the US-Canada tax treaty like Elijah mentioned. I put "Business profits exempt under Article VII of the US-Canada Income Tax Convention" in the explanation box. Also, keep a copy for your records! My accountant told me it's good documentation to have when filing my Canadian tax return to show that no US taxes were withheld from this income source. The whole process took me maybe 15 minutes once I understood what I was doing. Way better than stressing about conflicting information or risking the client having to withhold 30% of my payments!

I'm dealing with a very similar situation right now! Filed in mid-March, state payment was withdrawn immediately, but the IRS still hasn't touched my federal payment after 3+ weeks. No fraudulent documents in my case though. What's really frustrating is that my tax software shows the payment as "scheduled" but there's been zero communication from the IRS about any delays or issues. I've been checking my bank account daily expecting to see the withdrawal, but nothing. Based on what others are saying here about the identity theft angle, it sounds like your situation might be more complex than just a normal processing delay. The fraudulent 1099 from Pennsylvania could definitely be the culprit. Even though you didn't include it on your return, the IRS systems probably detected the discrepancy when cross-referencing your SSN. I'd strongly recommend following the advice about filing Form 14039 and setting up that IRS.gov account to check for any flags on your return. Better to be proactive than wait and potentially face bigger issues down the road. Keep us posted on what you find out - I'm curious if my delay is just normal backlog or if there's something else going on with my return too!

I've been following this thread with interest because I experienced something very similar last year. The combination of a delayed IRS payment and potential identity theft issues can be really stressful. Based on what you've described, I'd lean toward the fraudulent Pennsylvania 1099 being the main culprit behind your payment delay. Even though you didn't include it on your return, the IRS likely flagged your account when their systems detected that someone attempted to file using your SSN in another state. Here's what I'd recommend doing immediately: 1) Set up that IRS.gov account to check your transcript and account status 2) File Form 14039 (Identity Theft Affidavit) as others have mentioned 3) Keep detailed records of everything - the fraudulent 1099, your police report, correspondence with Pennsylvania's fraud department 4) Consider placing a credit freeze with all three bureaus as an extra precaution The good news is that since you filed on time and have confirmation of your payment authorization, you won't face any penalties even if the withdrawal is significantly delayed. The IRS is required to honor the original payment date you scheduled. That said, don't just wait indefinitely. If it's been more than 4-5 weeks total, I'd definitely try to get through to them by phone. The identity theft situation needs to be resolved properly to prevent future filing complications.

One thing nobody's mentioned yet - you can actually calculate exactly how much should be withheld using the worksheets in Publication 15-T from the IRS. It's a bit complicated, but it shows the exact formulas employers use to calculate your FITWH. For 2025, they've updated some of the withholding calculations, so what seems like "extra" withholding might actually be correct based on the new tables. The standard deduction and tax brackets have been adjusted for inflation.

As someone who's been through this exact situation, I'd recommend taking a systematic approach. First, definitely check with HR to see your actual W-4 form - sometimes there are transcription errors where payroll enters the wrong amount from what you wrote. Second, don't panic about the money already withheld - it's not lost, just prepaid to the IRS. You'll get it back when you file your return. Third, before making any changes, consider your overall tax situation. If you're single with one job and no other income, you probably don't need extra withholding. But if you have a working spouse, side income, or expect to owe taxes from other sources, that extra withholding might actually be protecting you from penalties. The IRS Withholding Calculator is free and pretty accurate if you want to double-check what your withholding should be. Just have your most recent paystub handy when you use it.

This is such a helpful thread! I'm actually going through something similar right now - my company switched payroll systems about two months ago and I've been seeing inconsistent withholding amounts that I couldn't quite figure out. Reading through all these responses has given me a much better understanding of what to look for. I never realized there were so many potential issues that could arise during a payroll migration - from filing status changes to allowances being reset to zero, to even the pay period configuration affecting calculations. I'm definitely going to check my W-4 information in our new system this week and compare it to what I remember having before. The point about keeping documentation of the correct settings for future reference is brilliant too - I wish I had thought to screenshot my old pay stubs before the switch happened. Thanks everyone for sharing your experiences and solutions! This community is incredibly valuable for navigating these kinds of confusing situations.

This thread has been incredibly informative! As someone who works in HR, I see this exact scenario play out constantly during payroll system migrations. The combination of filing status changes and allowances being reset that you've identified is probably responsible for 80% of the withholding complaints we get after a system switch. One additional thing I'd recommend bringing up in your HR meeting tomorrow - ask them if they have a "migration checklist" or standard process for verifying employee tax settings after a system change. Many companies now proactively audit a sample of employee records after major payroll transitions specifically because these issues are so common. Also, don't be surprised if HR tells you that several other employees have reported similar problems. In my experience, these payroll migration issues tend to affect multiple people, so you're probably not the only one dealing with this. Sometimes HR can even do a batch correction for everyone who was affected by the same systematic error. The silver lining is that once these settings get corrected, the new system will likely be much more accurate and user-friendly than whatever legacy system you were using before. Hang in there!