This has been such a helpful discussion! As someone who works in benefits administration, I wanted to add one more potential source of confusion. Sometimes when companies switch payroll providers or accounting firms, the new provider will flag "missing" pre-tax elections and make it sound urgent or required. If your company recently changed payroll companies or got a new accountant, they might have noticed that employee health insurance premiums are being processed as post-tax deductions when they should be pre-tax. From their perspective, this looks like a compliance issue that needs immediate attention - hence the stressed tone about "requirements" and potential penalties. The reality is that while you're not breaking any laws by processing premiums post-tax, you and your employees are missing out on tax savings that most people expect. A simple Premium Only Plan would fix this, but it's more of an optimization than a legal requirement. Definitely worth getting clarification on exactly what the accountant meant - but at least now you know it's not some mysterious IRS mandate hanging over your heads!

Thank you all for this incredibly thorough discussion! As a newcomer to this community, I'm amazed at how helpful everyone has been in breaking down what seemed like a confusing situation. Reading through all these responses, it's clear that @LunarLegend's boss likely received advice that got lost in translation somewhere between the accountant and the meeting. The most probable scenarios seem to be: 1. The accountant was recommending a Premium Only Plan for upcoming health insurance benefits (as @Diego Flores and others suggested) 2. There might be COBRA compliance requirements that got mixed up with Cafeteria Plan requirements (@Sean Flanagan's point) 3. A new payroll provider or accounting review flagged the missing pre-tax benefit elections (@Gianni Serpent's excellent insight) What I find most reassuring is the consensus that there are NO IRS requirements for small businesses to offer Cafeteria Plans - they're purely optional tax-saving tools. The stress and confusion could have been avoided with clearer communication, but at least now there's a clear path forward. For anyone else facing similar confusion, this thread is a perfect example of why it's worth getting multiple perspectives and asking for clarification when something doesn't sound quite right. The resources people shared (like the IRS connection services) also seem genuinely helpful for getting authoritative answers directly from the source. Great community discussion - exactly what I hoped to find when I joined this group!

You might want to consider contacting your employer's payroll department again, if you haven't recently. Sometimes they may have received the corrected W2 forms but haven't distributed them yet. I've also heard that some employers can provide a certified statement of the corrections that you can use for filing purposes if the W2c is significantly delayed. It might be worth asking if this is an option in your case.

I went through this exact situation last year and learned some hard lessons about W2 corrections. The 4-6 week timeline others mentioned is accurate, but here's what nobody tells you - you can actually request a "wage and tax statement substitute" from your employer while waiting. This is basically a certified letter with all the corrected information that the IRS will accept for filing purposes. I got mine within 3 days of asking HR, and it saved me from waiting another month for the physical W2c. The form is called SS-4 and most payroll departments know how to generate it. Also, if your correction is just for wage amounts (not withholding), you might be able to file with the original W2 and the difference might not even trigger an amended return requirement depending on your bracket. Worth asking a tax pro about your specific numbers.

If your employer has been doing this for a while, check your pay stubs from previous pay periods to see if state taxes were ever being withheld. You might need to look at your previous year's W-2 (box 17) to see if state taxes were reported as withheld.

I'm dealing with a similar situation at my company right now! My employer has been doing this "we'll pay your taxes as a benefit" thing for the past 6 months, and I've been getting increasingly worried about it. After reading through all these responses, I'm definitely going to bring this up with HR tomorrow. It sounds like even though my boss thinks they're doing something nice for us, they're actually creating potential problems. The point about this being considered additional taxable income is especially concerning - I had no idea about that. Has anyone here had success getting their employer to switch back to normal withholding mid-year? I'm wondering if there are any complications with changing the withholding system partway through the tax year, or if it's pretty straightforward to fix.

Make sure to save the PIN when u get it! They send new ones every year and if u lose it ur basically screwed until you can get through to someone

Pro tip: if you can't access ID.me or don't have the letter, you can also visit a Taxpayer Assistance Center in person with proper ID. They can help you get your IP PIN on the spot. Use the IRS office locator on their website to find one near you - just make sure to bring two forms of ID!

Just wanted to share my experience since I went through something similar last year. I received a 1099-G that I wasn't expecting and it turned out to be for a state tax refund from my previous year's return, not unemployment benefits. The key thing to check is which box on your 1099-G has the amount - Box 1 is for unemployment compensation, Box 2 is for state/local income tax refunds, and Box 4 shows federal income tax withheld. This makes a huge difference in how you report it! If it's Box 1 (unemployment), then yes, you report the full amount as taxable income and the withholding in Box 4 helps reduce what you owe. But if it's Box 2 (state refund), you might not need to report it at all if you took the standard deduction last year instead of itemizing. I'd recommend double-checking with your state's unemployment website or tax department if you're unsure about whether you actually received benefits in 2024. Better to verify now than deal with IRS issues later!

Definitely call your state unemployment office to verify those 2024 payments - that's the smart move! If you're certain you didn't receive benefits in 2024, there could be fraud involved where someone filed claims using your SSN. When you call, have your Social Security number ready and ask them to review all unemployment claims filed under your name for 2024. They can tell you the exact dates benefits were paid, the amounts, and whether the claims were filed by you or potentially fraudulent. If it turns out to be fraud, they'll guide you through the process of disputing the claims and getting a corrected 1099-G issued. The IRS has specific procedures for handling fraudulent unemployment income, so don't just ignore the form - you'll want documentation showing it was fraudulent if that's the case. Also, if you do discover fraud, make sure to file a police report and consider placing a fraud alert on your credit reports. Unemployment fraud often goes hand-in-hand with other identity theft issues.