How should I report a corrected W-2 form from the prior year? Do I report the mistake on the current year tax return?

ANSWER

The BIDaWIZ Team's Answer:

No, you need to apply the correction to your prior year tax return by filing a Form 1040X. You need to file this amended return if the corrected W-2 form increases your prior year tax liability and affects your allowable credits or deductions. When you file your form 1040X, attach a copy of your corrected Form W-2 to the amended return. Please also note that you might also need to amend your state return.