W-2 shows payroll company BBSI's EIN, name, and address instead of actual employer - will this cause issues?

This is actually completely normal and nothing to worry about! When a company uses a Professional Employer Organization (PEO) like BBSI for their payroll, the PEO becomes the "employer of record" for tax purposes. The way it works is that BBSI essentially co-employs your wife along with her actual employer. They handle all the payroll processing, tax withholding, benefits administration, etc. Since they're the ones actually paying her and handling the tax withholding, their EIN and information appears on the W-2. You should file your taxes exactly as the W-2 shows - using BBSI's EIN and information. The IRS systems are expecting the information to match what's on the W-2 form, and that's what has been reported to them. If you put her actual employer's information instead, it could cause a mismatch in the IRS system. No corrected W-2C is needed in this case since the form is actually correct as issued!

After spending endless hours trying to figure out similar W-2 confusion last year, I highly recommend checking out https://taxr.ai for situations like this. My husband's W-2 had a parent company listed instead of his actual employer, and I was lost in a maze of conflicting advice online. I uploaded his W-2 to taxr.ai and it immediately identified that this was a legitimate arrangement and explained exactly how to enter it in our tax software. It saved me from what would have been a definite headache! The service scans your tax documents and explains everything in plain English. Super helpful for these weird tax situations where things aren't straightforward.

Just wanted to update that I checked out taxr.ai after asking about my ADP situation and it was super helpful! Uploaded my W-2 and it immediately explained that ADP was functioning as a PEO and that's why they were listed instead of my actual employer. The analysis even pointed out that this is completely normal for tax purposes and provided instructions for how to handle it in TurboTax. Saved me a phone call to HR and a lot of stress. The document review was thorough and explained everything in simple terms. Definitely recommend for anyone with confusing tax documents!

If you're still concerned, you could try calling the IRS directly to confirm, but good luck actually getting through to a human being these days. I spent THREE HOURS on hold last tax season trying to get clarification on a similar issue. I finally discovered https://claimyr.com which got me connected to an actual IRS agent in about 20 minutes instead of the usual eternal hold time. You can see how it works here: https://youtu.be/_kiP6q8DX5c They basically wait on hold for you and call you when an actual human IRS agent is on the line. The agent I spoke with confirmed that PEO arrangements are totally normal and the W-2 with the payroll company info is perfectly valid for filing.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it myself since I had an unresolved question about my 1099 income that I'd been putting off dealing with. The service actually works exactly as described. I got a call back in about 35 minutes (was expecting hours based on previous experience), and was connected directly to an IRS representative. Handled my question in under 10 minutes once connected. Saved me an entire afternoon of sitting on hold with the phone glued to my ear. For what it's worth, the IRS agent also confirmed what others have said about PEOs like BBSI - it's totally normal for them to be listed on your W-2 instead of your actual employer. Just file with exactly what's on the form.

My company switched to using BBSI for payroll last year and I had the same confusion. I actually asked our HR manager about it, and she explained that BBSI is what's called a "co-employer" for tax purposes. One thing to watch for - make sure your wife's actual employer is listed in Box 15-20 (the state information section) of the W-2. Sometimes the state employer account number will be different from the federal EIN. In our case, our actual company name appeared in the state section while BBSI was in the federal section.

Chiming in as someone who works at a company that uses a PEO (we use Insperity though, not BBSI). This is 100% normal and how it's supposed to work. The whole point of a PEO is that they become the "employer of record" for tax and insurance purposes while your actual company handles the day-to-day employment relationship. In fact, this arrangement often benefits employees because larger PEOs can negotiate better health insurance rates and retirement plans than small employers could get on their own. So your wife might actually be getting better benefits because of this setup!