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I work in payroll and just want to add: if your second job didn't issue a W-2, they likely didn't report anything to the IRS about you for that tax year. Companies only generate W-2s when there's reportable income or withholding. If you were just "on the books" as an employee but never got paid, there's nothing to report from either side.
Thanks for your insight from the payroll perspective! That makes me feel better. One quick follow-up - if I filled out a W-4 for that second job but never actually worked, would that still be in the system somewhere that the IRS could see?
A W-4 is just an internal document that employers use to calculate withholding. It isn't sent to the IRS, so there's no record of it in the IRS system. The IRS only receives information when income is actually paid to you and reported on forms like W-2s or 1099s. Even if you filled out all the new hire paperwork including I-9, direct deposit forms, and a W-4, if no wages were ever paid, the IRS has no visibility into that employment relationship. Your employer keeps those documents for their records, but nothing gets transmitted to the IRS without actual compensation being paid.
This happened to me last year. Called my second employer just to check and they confirmed they didn't file anything with IRS since I earned $0. But I screenshot our email convo just in case there was ever an audit question. Better safe than sorry!
Smart move getting it in writing. Did you keep that documentation with your tax records? I'm wondering how long I should hang onto stuff like this.
Yes, I kept the email with my tax records for that year. The IRS generally recommends keeping tax records for at least 3 years after filing (or 2 years from when you paid the tax, whichever is later). For situations like this where there's potential confusion about employment status, I'd keep the documentation for the full 3 years just to be safe. It takes up virtually no space as a digital file, and having that employer confirmation could save you headaches if any questions ever come up during an audit.
Any idea what form I need to use for this? Is it just part of Schedule C if I'm a sole proprietor? Or does it go somewhere specific on my 1120 for my S-Corp?
This sounds like a fantastic marketing opportunity! As others have mentioned, this would definitely qualify as a deductible business expense under advertising/marketing. The $15,000 cost is substantial but could be very worthwhile if it generates good community buzz and brand recognition. One thing I'd add that I haven't seen mentioned yet - consider reaching out to local media ahead of time. Having The Sandlot actors at a community baseball event could generate some great press coverage, which would amplify your marketing investment. Local newspapers, radio stations, and TV news often love these kinds of nostalgic community events. Also, make sure to get photos and video of your company's signage and recognition at the event. This documentation serves double duty - it helps with tax compliance by proving the business purpose, and you can use the content for future marketing on your website and social media. The key is treating this as a serious marketing campaign rather than just a fun sponsorship. Document everything, measure what you can, and leverage it beyond just the single event. Good luck with it!
I ended up using TaxCycle for my 941X filings and it helped quite a bit with getting the calculations right. Still took almost 5 months to get the credit though.
Did you file paper forms or electronic? I'm wondering if one method is faster than the other for processing.
I'm in a very similar situation - filed my 941X forms for 2020 ERTC in March and still waiting. Based on what I'm seeing here, it sounds like we're right in that 4-6 month window that seems to be typical. One thing that's been helpful for me is keeping detailed records of when I filed and what I submitted. I created a simple spreadsheet tracking my filing dates, amounts claimed, and any correspondence. This way when I do eventually call the IRS (probably around the 5-month mark based on the advice here), I'll have everything organized. For what it's worth, I did file electronically through my tax software, and my CPA mentioned that electronic filings might have a slight advantage in processing time since there's no manual data entry required. Though with the volume of claims they're dealing with, I'm not sure it makes a huge difference. Hang in there - sounds like most people are eventually getting their credits, it's just taking much longer than anyone expected!
That's a great idea about keeping detailed records in a spreadsheet! I wish I had thought of that when I started this process. I'm currently at the 2-month mark waiting for my Q1 2020 ERTC filing, and it's reassuring to hear that most people are eventually getting their credits even if it takes longer than expected. Did your CPA mention anything about whether there are certain red flags that might cause additional delays? I'm a bit worried since my business is relatively small and the credit amount is substantial compared to our typical payroll - wondering if that triggers extra scrutiny. Also curious if anyone has tried following up before the 5-month mark just to confirm the IRS actually received the filing? Sometimes I worry it got lost in the mail or something went wrong with the electronic submission.
From my experience with both H&R Block and TurboTax over the years, their software sometimes forces you into certain pathways that don't always align with every tax situation. For Form 5329 specifically, I've found that some tax software treats the waiver request process differently, not because the IRS rules changed, but because of how they've programmed their workflow. One workaround if you want to stick with H&R Block is to complete your return in their software but then print and mail it instead of e-filing. This allows you to manually enter "RC" in the penalty box and attach your waiver statement without the software forcing you to include the penalty in your payment.
That's a smart workaround! Have you actually tried this with H&R Block software? I'm wondering if it will still calculate my total tax correctly if I go this route or if I'll need to manually adjust the final numbers before mailing.
Yes, I've used this method before. The H&R Block software will still show the penalty amount in its internal calculations, but when you print the actual Form 5329, you can physically write "RC" in the penalty box before mailing. You'll need to manually adjust your total payment amount on Form 1040 to exclude the penalty amount that H&R Block included. Just make sure to double-check all your math when making these adjustments, and keep detailed records of how you calculated your final payment amount. Also remember to include a thorough reasonable cause statement explaining why you qualify for the waiver. The downside is you'll need to paper file, which means a much longer processing time, but it's better than paying a penalty you might not owe.
Just an FYI - I'm an enrolled agent and we've seen this exact issue with multiple tax software packages this year. It seems to be a software implementation problem rather than an actual change in IRS policy. The Form 5329 instructions (even the 2023 version) still clearly state you can request a waiver by entering "RC" and attaching an explanation. Nothing in SECURE Act 2.0 changed this procedure. If you're using tax software that won't let you properly code the waiver, you might consider switching software or as someone else suggested, paper filing with the appropriate modifications.
Is there any problem with filing different tax forms using different software? Like could I do most of my return in H&R Block but then do just the Form 5329 in FreeTaxUSA and combine them when I file?
I wouldn't recommend mixing different tax software for different forms on the same return. Each software package calculates interconnected values across multiple forms, and manually combining them could lead to calculation errors or inconsistencies that might trigger IRS notices. A better approach would be to complete your entire return in software that properly handles Form 5329 waivers (like FreeTaxUSA as mentioned earlier), or use the paper filing workaround with H&R Block where you manually override the penalty calculation. The risk of errors from mixing software outputs usually isn't worth the convenience.
Amina Diallo
Just got my refund on Green Dot yesterday - March 21st! My official DDD was March 22nd, so they did release it one day early. I filed on February 3rd and got accepted the same day. Had to wait through the whole PATH Act delay since I claimed EITC. The money showed as pending at first around 9am, then fully available by 2pm. Hope this helps with your timeline expectations!
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TechNinja
Thanks for sharing your experience @Amina Diallo! That's actually really encouraging to hear that Green Dot did release your refund a day early. I'm in a similar situation with the PATH Act delay since I claimed EITC too, so it's helpful to see the timeline from someone who just went through it. Did you notice any specific time of day when the pending status changed to available? I'm trying to figure out if I should be checking morning, afternoon, or if it's pretty random. Also curious - did you get any notifications from the Green Dot app when the deposit hit, or did you just have to keep checking manually?
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