Accounting, Payroll & Pension Issues/employee merger within same fiscal year

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Question
Hello, I hope you are having a nice day!!
First off, thank you for your time and assistance in our payroll and tax matters!!!

Our company is a LLC with a parent and child tax entity.  The parent is a manufacturing plant and child is a corprate office.

Each entity has a separate FEIN, and they are located in different states (WI for the parent and MI for the child).

Currently each entity is reporting their respective payroll and taxes on separate 940 and 941 forms under their respective FEIN's.

We are changing payroll service providers at the end of Q3 this year.

For tax reporting simplicity, we would like to consolidate all of the employees into the parent tax entity with the new payroll provider beginning in Q4.

Can we carry over the FUTA, SUTA and FICA base wages and payments from the child FEIN to the parent so we do not reset and duplicate these taxes in Q4?

Also, would we be required to send each employee two separate W2's (one for each FEIN and their respective wages and taxes)?  Or could we somehow merge and report them on one W2 to avoid confusion to the employees?

Thank you in advance for your help on this!!!

Doug

Answer
You can switch companies in Q4 but you do have to send separate W-2's and you have to start over on the Fica/Medicare for the switched employees. It would be better to leave it as it is until the first of the year and than switch everyone over to one company. You can do it either way, but the 941, the W-2 and the Fica/Medicare has to go with the separate EIN and those employees would have 2 W-2's one for each company.

Shirley

Accounting, Payroll & Pension Issues

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Shirley McAllister, CPP, PHR

Expertise

I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.

Experience

25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.

Organizations
SHRM, APA, I.O.M.A.

Publications
I.O.M.A. and BNA

Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

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