How's the partial federal government shutdown affecting you?

[Turksmom]

Are there any accountants out there who can explain how this might work for federal employees? I am working but not getting paid. How can I get a W2 if my employeer (federal government) hasn't finished paying me yet for 2018? This of course assumes the W2 people havent been sent home. Will I get a partial W2 for what I have received and then file an ammended return once they get around to paying me? Im hoping this isnt a case of "federal employees cant file their taxes".

Wages are taxed in the year they are actually paid, not when earned. So the last pay received in December 2018 will be the last wage amount included on the W-2

 

[barkley]

Are there any accountants out there who can explain how this might work for federal employees? I am working but not getting paid. How can I get a W2 if my employeer (federal government) hasn't finished paying me yet for 2018? This of course assumes the W2 people havent been sent home. Will I get a partial W2 for what I have received and then file an ammended return once they get around to paying me? Im hoping this isnt a case of "federal employees cant file their taxes".

Wages are taxed in the year they are actually paid, not when earned. So the last pay received in December 2018 will be the last wage amount included on the W-2

that's right.

where it will get interesting is when this is all resolved and the back pay is done. will they do it in a way so that you are taxed at the normal rate had you gotten it timely or the higher rate (like when you get a bonus)? makes a big difference at the time the pay is issued (pretty much all evens out when you'll file taxes for 2019 in 2020). i'm wondering about this b/c when i worked for gov. my union had a contract negotiation that dragged on for almost 2 years (agency wanted a raise to be classified as a pay differential vs. an actual raise b/c then it wouldn't factor into future raises, it WAS a raise and the employees/union wanted the pay steps for the classification to reflect it so it went back and forth w/the monies held till an agreement was reached). when all was said and done the agency processed it separately from our regular paychecks so we got stuck w/a 20% federal withholding. if that happens and then on top of it all the individual month's healthcare premiums, pension contributions....get pulled at the same time it might be allot less than if it had been timely received.

 

[bcla]

that's right.

where it will get interesting is when this is all resolved and the back pay is done. will they do it in a way so that you are taxed at the normal rate had you gotten it timely or the higher rate (like when you get a bonus)? makes a big difference at the time the pay is issued (pretty much all evens out when you'll file taxes for 2019 in 2020). i'm wondering about this b/c when i worked for gov. my union had a contract negotiation that dragged on for almost 2 years (agency wanted a raise to be classified as a pay differential vs. an actual raise b/c then it wouldn't factor into future raises, it WAS a raise and the employees/union wanted the pay steps for the classification to reflect it so it went back and forth w/the monies held till an agreement was reached). when all was said and done the agency processed it separately from our regular paychecks so we got stuck w/a 20% federal withholding. if that happens and then on top of it all the individual month's healthcare premiums, pension contributions....get pulled at the same time it might be allot less than if it had been timely received.

I’ve been there when it came to lump sum payments. I got a bonus that was four months salary once. I was wondering where it all went. It was withheld as if I was earning that much every two weeks. I got it back with my refund, but it was still a pretty big interest free loan to the US Treasury.

I’ve also gotten laid off, where HR suggested spreading out the payments over two months (I had 10+ weeks) to reduce the withholding. It also took a while to find a job, so my refund was still a bunch because I didn’t hit my normal tax bracket. Lump sum payments always have that tendency to mess up withholding.

 

[tinkerdorabelle]

Many do. I guess they are fools.

Actually I think the ones that are "fools" real putzes are the ones that feel that they are at fault or should have done better because of a political ego driven gov shutdown, by politicians that themselves get paid, and are going along believing they are at fault bc they should have saved more, or prepared better, even tho 70+ percent of them live paycheck to paycheck. I think those guys or ones supporting that are the "fools" or worse.

 

[kdonnel]

I’ve also gotten laid off, where HR suggested spreading out the payments over two months (I had 10+ weeks) to reduce the withholding.

Depending on the state, how severance is paid has a direct impact on unemployment eligibility. In some states you can not receive unemployment while receiving severance. Companies know this and will structure payments hoping you find a job before the severance runs out.

 

[Gumbo4x4]

I’ve been there when it came to lump sum payments. I got a bonus that was four months salary once. I was wondering where it all went. It was withheld as if I was earning that much every two weeks. I got it back with my refund, but it was still a pretty big interest free loan to the US Treasury.

I’ve also gotten laid off, where HR suggested spreading out the payments over two months (I had 10+ weeks) to reduce the withholding. It also took a while to find a job, so my refund was still a bunch because I didn’t hit my normal tax bracket. Lump sum payments always have that tendency to mess up withholding.

IIRC, the withholding on lump sums has been reduced somewhat with the most recent tax changes.

 

[bcla]

Depending on the state, how severance is paid has a direct impact on unemployment eligibility. In some states you can not receive unemployment while receiving severance. Companies know this and will structure payments hoping you find a job before the severance runs out.

Not in my state. Severance isn’t counted as income for determination of unemployment eligibility, regardless of whether it’s lump sum or spread out.

https://edd.ca.gov/unemployment/FAQ_-_Collecting_Benefits.htm

• How does severance pay affect my eligibility to receive unemployment insurance benefits?

Severance pay is not deducted from unemployment insurance benefits and does not affect your eligibility to receive benefits. The method of payment, such as a lump sum payment or payments paid to you at regular pay period intervals does not change the nature of the payment. However, you must report severance pay at the time you file your unemployment insurance claim.​

 

[rickybobby]

Back to the original question, how is it affecting me?
It pisses me off that people are being punished that should not be punished. This needs to end.
Stop the paychecks of those that are involved in the shutdown and you just might see resolution.

 

[tarheelmjfan]

Back to the original question, how is it affecting me?
It pisses me off that people are being punished that should not be punished. This needs to end.
Stop the paychecks of those that are involved in the shutdown and you just might see resolution.

Unfortunately, some who have the most power wouldn't be hurt by a pay stoppage. There needs to be a punishment that would affect everyone who has any say in the National budget.

 

[tarheelmjfan]

One of our local channels sent an email stating Miami International will be closing a terminal early, due to TSA shortage.

 

[Colleen27]

The issue with that one is it won't work. Most of congress doesn't need the money. Most of congress could in fact posture even if there pay is on hold.

And in the long run, it would be yet another deterrent keeping "real" people (not the already-wealthy) from running for office because they couldn't afford to chance having to manage the living expenses and other costs of serving without any certainty of being paid timely. None of the key figures in this shutdown would even bat an eye if they were losing their pay, but a whole lot of the newly-elected class in the House (which more closely represents the actual US population than most incoming Congresses) would struggle and perhaps even have to step down if it stretches on too long.

 

[Colleen27]

I don't remember if it was in this thread or another one, but someone mentioned federal student aid being affected. Well, in some ways it is. If certain paperwork is requested it has to come from the IRS. Guess whose offices are closed? Exactly. So these students are in a bit of limbo on whether their they will get their financial aid and when. If this goes on long enough, it will begin to affect the colleges.

I'm waiting to see how FAFSA processing is impacted. It might be coincidence at this point, but my daughter added two regular-decision applications to her list after I'd already filed her freshman year FAFSA. I updated to have it sent to those additional schools on 12/22 - by pure dumb luck, the day the shutdown began - and neither of the applicant portals indicate the schools have received it. I haven't read anything that suggests the processing of federal aid will be impacted and DS's second semester aid came through uninterrupted, but it didn't take this long for the first batch of schools to get the info from the feds.

 

[Planogirl]

I'm wondering about tax returns. How will the IRS handle all of it if this drags out?

 

[starry_solo]

I'm wondering about tax returns. How will the IRS handle all of it if this drags out?

I thought I read they would start taking returns on 1/28.

 

[Planogirl]

I thought I read they would start taking returns on 1/28.

They can take them but can they process them in a timely way? It's good if they have that covered but I hadn't heard.

 

[underdesea]

Many do. I guess they are fools.

Does the air up there on your high horse ever get thin?

 

[Christine]

They can take them but can they process them in a timely way? It's good if they have that covered but I hadn't heard.

Many returns (if you use tax prep software and do electronic filing) are processed without a human touching them. As long as they are standard type of returns and no audit flags are triggered which would then require a person at the IRS to review, I think most processing will continue as long as the system that processes is kept running and maintained.

 

[DawnM]

My friend is in the process of adopting and she can't get her Visa or anything done on this end to be able to go get her new son.

 

[jormom1030]

My friend is in the process of adopting and she can't get her Visa or anything done on this end to be able to go get her new son.

That is odd because you get your Visa from the consulate of the country you are traveling to. All of the people on my China adoption groups that I am in are still getting all their adoption paperwork processed.

 

[Christine]

That is odd because you get your Visa from the consulate of the country you are traveling to. All of the people on my China adoption groups that I am in are still getting all their adoption paperwork processed.

I thought that was odd also. Visas come from the country you are going to, not the federal government.