Strange 140 REF, please help!

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allaboutgc

Registered Users (C)
One of my friends got a strange REF. Please help!

The reason for the REF is: he submitted his previous years W-2 along with 140 application (no pay stub). His actual salary is the same (actually several hundreds more) than what is stated on LC.

BUT the problem is that he put a big portion of his salary to retirement plan etc., which is the so-called "before tax deduction". So the amount of money on his W2 is his actual salary MINUS all those before-tax deductions. (you can check your own w2, the total salary shown there is called "taxable salary", which is your gross income - all the tax-free deductions).

Therefore his W2 shows much less than what he actually earns, and this has triggered the "company ability to pay" REF. He is very very upset. Lawyer says never saw this type of REF before. PLEASE HELP WITH SUGGESTIONS! Thanks!!!
 
W-2 has all information about your salary, including details on what was paid into a before tax retirement plan. That's why wages, tips etc. section is different from Social Security wages and Medicare wages. Also secion 12 of W-2 should tell you how much was set aside for a 401K or similar plans, including group life insurance. In other words, there should not be any confusion on what a person is earning before and after tax from a W-2. It doesn't add up.
 
had asked my attorney about similar situation

I was in a similar situation a year ago and my employer gave me a choice, When I asked my attorney, I got this response from him:

"Unfortunately this type of retirement plan contribution cannot be counted
for prevailing wage purposes".

So, I had to give up on the advantages of the retirement plan and add it to my taxable income. Sorry to give you the negative feedback, if you find a way to convince the USCIS to include the retirement plan in the gross, please let us know.

Thanks.
 
Dont worry. Some stupid guy is looking at the application.

Nothing to worry about, the column 1 in the W-2 tells how much salary was made by the person.

Send him the pay stub, and explain each item deduction in paystub. Also, it would helpful, if your friend can provide the annual statements for his retirement plan.

Contribution to 401K or any other retirement plans DONOT disqualify anyone. The prevailing wage mentioned is pretax dollars (including social security and medicare). If all the taxes are counted, most people are paying more than 30-40% of their salary as tax dollars. In addition, money contributed to the retirement is counted many people would receive only 40-50% of what they actually earn.

allaboutgc said:
One of my friends got a strange REF. Please help!

The reason for the REF is: he submitted his previous years W-2 along with 140 application (no pay stub). His actual salary is the same (actually several hundreds more) than what is stated on LC.

BUT the problem is that he put a big portion of his salary to retirement plan etc., which is the so-called "before tax deduction". So the amount of money on his W2 is his actual salary MINUS all those before-tax deductions. (you can check your own w2, the total salary shown there is called "taxable salary", which is your gross income - all the tax-free deductions).

Therefore his W2 shows much less than what he actually earns, and this has triggered the "company ability to pay" REF. He is very very upset. Lawyer says never saw this type of REF before. PLEASE HELP WITH SUGGESTIONS! Thanks!!!
Click to expand...
 
Last edited by a moderator:
Mickey23

He double checked his w2 more than 100 times, and indeed it ONLY shows his earning AFTER all the retirement deductions...

Colume 1,3,5 "wages, tips,..." is TAXABLE income only. I checked mine and it is the same.
 
allaboutgc said:
He double checked his w2 more than 100 times, and indeed it ONLY shows his earning AFTER all the retirement deductions...

Colume 1,3,5 "wages, tips,..." is TAXABLE income only. I checked mine and it is the same.
Click to expand...

I have contributed to 401K at work, and in all my W2 column 1 indicates the taxable income, column 3 and column 5 indicates total pre-tax salary.

Ask your friend about the column 12 in W2, that indicates the amount of money contributed towards 401K.

If your friend is not contributing towards 401K, 403B, then please specify.

Also, tell your friend to look for all the paystubs during that period. I am wondering whether your friend had got errorenous W2 in the first place.
 
is it a deduction or contribution?

what your friend needs to check is if the amount is a deduction or a contribution. If its a deduction, it should appear on the W2. If its a company's contribution to a retirement plan, it will not show on the W2. The employee does not declare it anywhere on the individual tax return. It will show on the individual's tax return only when the money is withdrawn - which can be done without penalty only after age 55/60.

In either case, the amount should be available to the company's "ability to pay". If its a contribution towards a "Profit sharing" or "Money purchase" retirement plan, ask your friend to get the statements for the plan(s) and submit them along with the other documents when responding to the RFE. Usually these would be part of the tax returns filed by the corporation and would be coming out of the "Net Income". In which case, your friends W2 amt + the company's net income should be well over the LC amt. Unless ofcourse, the company has bigger losses elsewhere.

There are a lot of threads about company's ability to pay. Some suggest that you get a good attorney, who should in turn hire the services of a good CPA and present a very solid case of proving the company's ability to pay.

Disclaimer: I am neither an attorney nor a CPA!
 
Once again:
Section 1: Wages, Tips, other comp
Section 3: Social Security wages
Section 5: Medicare wages

Now, no matter what company you work for or what you do, you pay social security and medicare taxes on your gross income (this is called double taxation of your income, an age long debate). So, your section 3 and 5 show your actual income, even though you never see the SS and Medicare dollars. Consequently, the $$ in section 1 are mostly lower than section 3 and 5.

Second, section 12 shows your pre-tax deductions towards stuff like 401K and group life insurance.

These are as per IRS requirements, so its not upto your company to modify. Bottomline, a W-2 is required to show what you earned before and after taxes, SS, medicare, retirement plans etc. If your friends' W-2 doesn't show that, there's something wrong with the W-2. Have him/her talk to payroll, pronto.
 
Also,
The ability to pay issue shouldn't even be looked at via a W-2, since the company is required to pay the stated wages upon approval of green card. Ability to pay is supported by documents like company's audited financial reports, statements by CFO etc.
 
Although w-2 itself will not prove the employer's current ability to pay the 'proffered' amount (It does if the current w-2 income is equal or more than the proffered amount), it will be crucial in determining.
If the current w-2 amount does not match the proffered amount, then the company should have a profit of at least the difference between the currentw-2 and proffered amount.
If the w-2 shows same or more than proffered amount, then w-2 alone can prove that ability to pay. Otherwise more documents. crazy huh !!

Mickey_32 said:
Also,
The ability to pay issue shouldn't even be looked at via a W-2, since the company is required to pay the stated wages upon approval of green card. Ability to pay is supported by documents like company's audited financial reports, statements by CFO etc.
Click to expand...
 
IndoKiddo said:
Although w-2 itself will not prove the employer's current ability to pay the 'proffered' amount (It does if the current w-2 income is equal or more than the proffered amount), it will be crucial in determining.
If the current w-2 amount does not match the proffered amount, then the company should have a profit of at least the difference between the currentw-2 and proffered amount.

>>> That is correct.

If the w-2 shows same or more than proffered amount, then w-2 alone can prove that ability to pay. Otherwise more documents. crazy huh !!

>>> Not necessarily, you could have been paid the profferred wages last year and your company may have filed for chapter 11 since then, jeopardizing the continued ability to pay. You have to submit evidence in terms of financial statements and annual reports no matter what your W-2 says.
Click to expand...
 
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