If you woked in 2006 but do not get paid until 2007, does the income count for 2006 or 2007?

Question

My brother-in-law got paid today (2007) for his last week he worked in December of 2006. His employer put on his paytub something about end of year (2006) earnings. Which included this paycheck he got today. If this is suppose to be for 2007, where can I read (forum, website, etc) Anywhere I can print out proof that it should not reflect the 2006 year but reflect the 2007 year. Someone please help me as soon as possible. Thank you.

Pay period is Dec 24 to dec 30. Dated the check for dec 29th. Now how can you date a check a day before you have actually worked??

The pay period for the week before was 12/17/06 -12/23/06 pay date 12/29/06. They made the payperiod end on the 29th.

They made the check date and the pay period end same time so she could make it 2006 income.

Actually for my sister & her husband it does matter because if it is counted for 2006, then it shows he got 6 paychecks instead of 5. Then they loose there medical benefits for their 4 kids. Her husband does not have any type of insurance at work. There kids meds cost almost a total of $1000/mo. He only works construction so they don't have the money.

Answer 1

Typically, when you begin a job, the employer will hold your pay a week.

If you think about it, it makes sense. You work in week one, and during week two, the time clock (or whatever) is calculated, the check is printed, and you receive the paycheck on the friday of week two.

Then you work during week two, and during week three the pay check if processed, and so on and so on.

So from this, take a look at the last week of the year. You work it, but the paycheck is not processed until the first week of the following year, and on the first friday of the year, you receive a paycheck for the previous week's work, and in this case, it's the last week of the previous year.

How confusing was that?

But whenever you receive a paycheck, it's always for the previous week's work.

It doesn't matter when you receive the check. There's always dates on the check that indicate the week when the work was performed, and also the date when the check was issued.

The check he received in the first week of 2007 will always reflect the work performed during the last week of 2006. It's been like that since he's worked there!

The paycheck always represents pay for work performed the previous week.

Answer 2

If the employer actually cut the check AND made it available to your BIL prior to 1/1/07 (and putting it in the mail counts as making it available), then it is 2006 income.

If the employer didn't make the check available until after 12/31/06, then it should not be included in 2006 income.

Does it really matter? One way or the other, taxes will be paid on that money. What difference does it make if it is on the 2006 or the 2007 return, as far as your BIL is concerned?

Answer 3

It sounds like the employer was trying to take his deductions in 2006. All he has to do is estimate the wages (hours) for the period and the tax liability is based upon when the checks were written and distributed to the employees.

My company closed from 12/22 to 1/2 and I got my year end check through 12/24 on 12/22.

Answer 4

If the check is dated 2006, then it's 2006 income. Since it was for work done in 2006, this is legal for the employer to do. If it had included hours actually worked in 2007, then it wouldn't be legal for them to do.

Answer 5

The IRS counts the time of the check date for taxes, this is reported on the W-2 that is submitted for your reconciliation of taxes, so if the check is dated iin 2007 that is when the wages are reported. Look at the IRS website for the Circular E under forms and you will see the rules regulating the employer.

Answer 6

2007.

He worked last year, yes, but was paid this year.

Not sure what his employer was trying to say.... weird.

Employer's expenses would be 07 as well