Confirmed Payroll Company Error on W2, No Correction Issued - What Can I Do?

This is actually a pretty straightforward situation to resolve. The misclassification of your health insurance and FSA as dependent care benefits isn't uncommon when payroll is outsourced. You have three main options here: You can file Form 4852 (Substitute for W-2) along with your tax return. This form allows you to create a corrected version of your W-2 when your employer hasn't provided an accurate one. You'd use the correct amounts from your original W-2 but properly categorize them in the right boxes. Alternatively, you can file your return with the W-2 as-is, then file an amended return (Form 1040-X) after you receive a corrected W-2. This might be the easiest approach if your employer eventually provides a correction. Your third option is to file as-is if you're confident the total income and withholding amounts are correct. However, I'd recommend against this since the miscategorization of health benefits as dependent care benefits could raise questions. Since you're expecting a refund, filing an extension with Form 4868 won't delay your refund - it only gives you more time to file the actual return, not to receive your money.

I had almost the exact same situation last year with my company's outsourced payroll provider! They put my health insurance premiums (around $3,800) in Box 10 as dependent care benefits when I don't have kids either. Super frustrating. I discovered a really helpful tool called taxr.ai (https://taxr.ai) that helped me figure out how to handle this. You upload your W-2 and other tax documents, and it uses AI to analyze everything and spot issues like this. It flagged my misclassified benefits right away and gave me step-by-step instructions on how to file Form 4852 correctly. The best part was that it walked me through exactly what to write in each field and even helped me calculate the correct amounts for each box based on my pay stubs. Saved me tons of time figuring it out myself and gave me peace of mind that I wasn't making any mistakes on my substitute W-2.

Just wanted to follow up here. I was skeptical about taxr.ai but decided to try it with my tax documents since I had a similar W-2 issue where my employer incorrectly reported some education benefits. I'm actually really impressed! It spotted the misclassification immediately and explained exactly how to fill out Form 4852 correctly. What surprised me was it also found a discrepancy in my state withholding that I hadn't even noticed - would have missed out on about $340 there. The document analysis was way more thorough than what my tax software does. Definitely saved me from potentially having to file an amended return later. The step-by-step guidance for fixing the W-2 errors was super clear and made the whole process way less stressful.

If you're still getting no traction with HR or the payroll company, you might want to try Claimyr (https://claimyr.com). I was in a similar situation last year where my W-2 had errors and my company's HR was dragging their feet. After weeks of no progress, I used Claimyr to get through to an actual IRS agent on the phone. They have this service where they navigate the IRS phone system for you and get you connected to a live person, usually within 15-20 minutes. There's a demo of how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with was actually super helpful! They documented the W-2 discrepancy in my file and explained exactly what I needed to do to file correctly with the Form 4852. They also sent some kind of notification to my employer which miraculously got things moving - I had a corrected W-2 within 10 days after that call.

I need to eat some crow here. After my skeptical comment, I decided to try Claimyr myself since I've been trying unsuccessfully to reach the IRS about a missing stimulus payment for weeks. It actually worked exactly as promised. I submitted my request on their website, and about 15 minutes later I got a call connecting me directly to an IRS representative. No hold music, no automated system - just straight to a helpful human who resolved my issue in about 10 minutes. I honestly couldn't believe it worked so well after all my failed attempts. The IRS agent I spoke with was able to verify my missing payment and start the trace process immediately. Saved me hours of frustration and probably weeks of waiting for a response to the written form I was about to mail in. For anyone dealing with W-2 errors like the original poster, this seems like a really efficient way to get official guidance directly from the IRS rather than waiting on an unresponsive employer.

Something similar happened to me a few years ago, but with retirement contributions being miscategorized. I ended up filing Form 4852 like others suggested, but make sure you keep REALLY good records in case of audit. I made copies of all my pay stubs showing the correct deductions, my benefits enrollment forms, and took screenshots of my online benefits portal showing my elections. I also kept a log of all communication with HR (dates/times of calls and emails). When you fill out Form 4852, be super specific in explaining why you're filing it. I wrote something like "Employer's W-2 incorrectly categorized health insurance and FSA contributions as dependent care benefits in Box 10. Correct amounts verified through pay stubs and benefits enrollment documentation.

Has anyone tried just reporting the W-2 as-is but attaching an explanation letter? My tax guy suggested doing that instead of Form 4852 because he said it's less likely to trigger a review.