Special Reporting Situations for Form W-2
Adoption benefits.
Amounts paid or expenses incurred by an employer for qualified adoption expenses under an adoption assistance
program are not subject to federal income tax withholding and are not reportable in box 1. However, these amounts (including
adoption benefits
paid from a section 125 (cafeteria) plan, but not including adoption benefits forfeited from a cafeteria plan) are subject to social
security,
Medicare, and railroad retirement taxes and must be reported in boxes 3 and 5. Also, the total amount must be reported in
box 12 with code
T.
See Notice 97-9, 1997-1 C.B. 365, for more information on adoption benefits. You can find Notice 97-9 on page 35 of
Internal Revenue Bulletin
1997-2 at
www.irs.gov/pub/irs-irbs/irb97-02.pdf. Advise your employees to see the Instructions for
Form 8839, Qualified Adoption Expenses.
Agent reporting.
Generally, an agent who has an approved Form 2678, Employer Appointment of Agent, should enter the agent's name
as the employer in box c of Form W-2, and file only one Form W-2 for each employee. However, if the agent (a) is acting as
an agent for two or more
employers or is an employer and is acting as an agent for another employer, and (b) pays social security wages for more than
one employer in excess of
the wage base to an individual, the agent must file separate Forms W-2 for the affected employee reflecting the wages paid
by each employer. On each
Form W-2, the agent should enter the following in box c of Form W-2:
| (Name of agent) |
| Agent for (name of employer) |
| Address of agent |
Each Form W-2 should reflect the EIN of the
agent in
box b. An agent files one Form W-3 for all of the Forms W-2 and enters its own information in boxes e, f, and g of Form W-3
as it appears on the
agent's related employment tax returns (for example, Form 941). Enter the client-employer's EIN in box h of Form W-3 if the
Forms W-2 relate to only
one employer (other than the agent); if not, leave box h blank. See Rev. Proc. 70-6, 1970-1 C.B. 420, for procedures to be
followed in applying to be
an agent.
Generally, an agent is not responsible for refunding excess social security or railroad retirement (RRTA) tax on employees.
If an employee worked
for more than one employer during 2008 and had more than $6,324.00 in social security and Tier I RRTA tax withheld, he or
she should claim the excess
on the appropriate line of Form 1040 or Form 1040A. If an employee had more than $2,960.10 in Tier II RRTA tax withheld from
more than one employer,
the employee should claim a refund on Form 843, Claim for Refund and Request for Abatement.
Archer MSA.
An
employer's contribution to an employee's Archer MSA is not subject to federal income tax withholding, or
social security, Medicare, or railroad retirement taxes if it is reasonable to believe at the time of the payment that the
contribution will be
excludable from the employee's income. However, if it is not reasonable to believe at the time of payment that the contribution
will be excludable
from the employee's income, employer contributions are subject to income tax withholding and social security and Medicare
taxes (or railroad
retirement taxes, if applicable) and must be reported in boxes 1, 3, and 5.
You must report all employer contributions to an Archer MSA in box 12 of Form W-2 with code
R. Employer contributions to an Archer MSA
that are not excludable from the income of the employee also must be reported in box 1.
An
employee's contributions to an Archer MSA are includible in income as wages and are subject to federal income tax withholding and
social security and Medicare taxes (or railroad retirement taxes, if applicable). Employee contributions are deductible, within
limits, on the
employee's Form 1040.
See Notice 96-53, 1996-2 C.B. 219 and Pub. 969, Health Savings Accounts and Other Tax-Favored Health Plans, for more
information. You can find
Notice 96-53 on page 5 of Internal Revenue Bulletin 1996-51 at
www.irs.gov/pub/irs-irbs/irb96-51.pdf.
Clergy and religious workers.
For certain members of the clergy and religious workers who are not subject to social security and Medicare taxes as
employees, boxes 3 and 5 of Form W-2 should be left blank. You may include a minister's parsonage and/or utilities allowance
in box 14. For
information on the rules that apply to ministers and certain other religious workers, see Pub. 517, Social Security and Other
Information for Members
of the Clergy and Religious Workers, and
Section 4-Religious Exemptions in
Pub. 15-A.
Corrections.
Use the current version of Form W-2c, Corrected Wage and Tax Statement, to correct errors (such as
incorrect name, SSN, or amount) on a previously filed Form W-2. To file your corrections electronically, see
Online wage reporting on page
1.
If the SSA issues your employee a replacement card after a name change, or a new card with a different social security
number after a change in
alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2. It is not necessary
to correct the prior
years if the previous name and number were used for the years prior to the most recently filed Form W-2.
File Form W-3c, Transmittal of Corrected Wage and Tax Statements, whenever you file a Form W-2c with the SSA, even
if you are only filing a Form
W-2c to correct an employee's name or SSN. However, see
Incorrect address on employee's Form W-2 below for information on correcting an
employee's address. See the Instructions for Forms W-2c and W-3c if an error was made on a previously filed Form W-3.
If you discover an error on Form W-2 after you issue it to your employee but before you send it to the SSA, check
the
“Void” box at
the top of the incorrect Form W-2 on Copy A. Prepare a new Form W-2 with the correct information, and send Copy A to the SSA.
Write “
CORRECTED”
on the
employee's new copies (B, C, and 2), and furnish them to the employee. If the “
Void” Form W-2 is on a page with a correct Form
W-2, send the entire page to the SSA. The “
Void” form will not be processed.
Do not write “
CORRECTED” on Copy A of Form W-2.
If you are making an adjustment in 2008 to correct social security and Medicare
taxes for a prior year, you must file
Form 941c, Supporting Statement To Correct Information, with your Form 941, Form 943, or Form 944 in the return period that
you find the error, and
issue the employee a Form W-2c for the prior year. If you are correcting social security or Medicare
wages or tips, also file the entire
Copy A page of Form W-2c and Form W-3c with the SSA to correct the social security records and
any other items on the original Form W-2
(or previously filed Form W-2c) that were in error.
Incorrect address on employee's Form W-2.
If you filed a Form W-2 with the SSA showing an incorrect address for the employee but all other information
on Form W-2 is correct,
do not file Form W-2c with the SSA merely to correct the address.
However, if the address was incorrect on the Form W-2 furnished to the employee,
you must do one of the following:
-
Issue a new, corrected Form W-2 to the employee, including the new address. Indicate “REISSUED STATEMENT”
on the new copies. Do not send Copy A to the SSA.
-
Issue a Form W-2c to the employee showing the correct address in box f and all other correct information. Do not send Copy A to the
SSA.
-
Mail the Form W-2 with the incorrect address to the employee in an envelope showing the correct address or otherwise deliver
it to the
employee.
Deceased employee's wages.
If an employee dies during the year, you must report the accrued wages, vacation pay, and other
compensation paid after the date of death. Follow the instructions below even if you reissued the deceased employee's uncashed
paycheck in the name of
his or her estate or beneficiary.
If you made the
payment in the same year that the employee died, you must withhold social security and Medicare taxes on the payment and
report the payment on the employee's Form W-2 only as social security and Medicare wages to ensure proper social security
and Medicare credit is
received.
On the employee's Form W-2, show the payment as social security wages (box 3) and Medicare wages and tips (box 5)
and the social security and
Medicare taxes withheld in boxes 4 and 6.
Do not show the payment in box 1.
If you made the
payment after the year of death, do not report it on Form W-2, and do not withhold social security and Medicare taxes.
Whether the payment is made in the year of death or after the year of death, you also must report it in box 3 of Form 1099-MISC,
Miscellaneous Income, for the payment to the estate or beneficiary. Use the name and taxpayer identification number (TIN)
of the payment recipient on
Form 1099-MISC.
Example.
Before Employee A's death on June 15, 2008, A was employed by Employer X and received $10,000 in wages on which federal income
tax of $1,500 was
withheld. When A died, X owed A $2,000 in wages and $1,000 in accrued vacation pay. The total of $3,000 (less the social security
and Medicare taxes
withheld) was paid to A's estate on July 20, 2008. Because X made the payment during the year of death, X must withhold social
security and Medicare
taxes on the $3,000 payment and must complete Form W-2 as follows:
-
Box a - Employee A's SSN
-
Box e - Employee A's name
-
Box f - Employee A's address
-
Box 1 - 10000.00 (does not include the $3,000 accrued wages and vacation pay)
-
Box 2 - 1500.00
-
Box 3 - 13000.00 (includes the $3,000 accrued wages and vacation pay)
-
Box 4 - 806.00 (6.2% of the amount in box 3)
-
Box 5 - 13000.00 (includes the $3,000 accrued wages and vacation pay)
-
Box 6 - 188.50 (1.45% of the amount in box 5)
Employer X also must complete Form 1099-MISC as follows:
-
Boxes for: Recipient's name, address, and TIN—The estate's name, address, and TIN
-
Box 3: 3000.00 (Even though amounts were withheld for social security and Medicare taxes, the gross amount is reported
here.)
If Employer X made the payment after the year of death, the $3,000 would
not be subject to social security and Medicare taxes
and would
not be shown on Form W-2. However, the employer would still file Form 1099-MISC.
Designated Roth contributions.
Under section 402A, a participant in a section 401(k) plan or under a 403(b) salary reduction agreement that includes
a qualified Roth contribution
program may elect to make designated Roth contributions to the plan or program in lieu of elective deferrals. Designated Roth
contributions are
subject to federal income tax withholding and social security and Medicare taxes (and railroad retirement taxes, if applicable)
and must be reported
in boxes 1, 3, and 5.
Section 402A requires separate reporting of the yearly designated Roth contributions. Designated Roth contributions
to 401(k) plans will be
reported using code
AA in box 12; designated Roth contributions under 403(b) salary reduction agreements will be reported using code
BB in
box 12. For reporting instructions, see
Code AA and
Code BB on page 13.
Educational assistance programs.
A $5,250 exclusion for employer-provided educational assistance applies to benefits provided to
your employees under an educational assistance program. However, educational assistance that exceeds $5,250 may be excludable
from an employee's wages
if it qualifies as a working condition benefit. See Pub. 970, Tax Benefits for Education, and section 2 of Pub. 15-B for more
information. Also see
Box 1-Wages, tips, other compensation on page 9.
Election workers.
Report on Form W-2 payments of $600 or more to election workers for services performed in state, county, and
municipal elections. File Form W-2 for payments of less than $600 paid to election workers if social security and Medicare
taxes were withheld under a
section 218 (Social Security Act) agreement.
Do not report election worker payments on Form 1099-MISC.
If the election worker is employed in another capacity with the same government entity, see Rev. Rul. 2000-06 on page
512 of Internal Revenue
Bulletin 2000-06 at
www.irs.gov/pub/irs-irbs/irb00-06.pdf.
Employee business expense reimbursements.
Reimbursements to employees for business expenses must be reported as follows:
-
Generally, payments made under an accountable plan are excluded from the employee's gross income and are not reported on Form
W-2. However, if you pay a per diem or mileage allowance and the amount paid for substantiated miles or days traveled exceeds
the amount treated as
substantiated under IRS rules, you must report as wages on Form W-2 the amount in excess of the amount treated as substantiated.
The excess amount is
subject to income tax withholding and social security and Medicare taxes. Report the amount treated as substantiated (that
is, the nontaxable portion)
in box 12 using code L. See Code L- Substantiated employee business expense reimbursements on page 12.
-
Payments made under a nonaccountable plan are reported as wages on Form W-2 and are subject to federal income tax withholding and
social security and Medicare taxes.
For more information on accountable plans, nonaccountable plans, amounts treated as substantiated under a per diem
or mileage allowance, the
standard mileage rate, the per diem substantiation method, and the high-low substantiation method, see Pub. 463, Travel, Entertainment,
Gift, and Car
Expenses; Pub. 1542, Per Diem Rates; and section 5 of Pub. 15 (Circular E).
Employee's social security and Medicare taxes paid by employer.
If you paid your employee's share of social security and Medicare taxes rather than deducting
them from the employee's wages, you must include these payments as wages subject to federal income tax withholding and social
security, Medicare, and
federal unemployment (FUTA) taxes. The amount to include as wages is determined by using the formula contained in the discussion
of
Employee's
Portion of Taxes Paid by Employer in section 7 of Pub. 15-A.
This does not apply to household and agricultural employers. If you pay a household or agricultural
employee's social security and Medicare taxes, you must include these payments in the employee's wages for income tax withholding
purposes. However,
the wage increase due to the tax payments is not subject to social security, Medicare, or FUTA taxes. For information on completing
Forms W-2 and W-3
in this situation, see the Instructions for Schedule H (Form 1040), Household Employers, and section 3 of Pub. 51 (Circular
A).
Fringe benefits.
Include all taxable fringe benefits in box 1 of Form W-2 as wages, tips, and other compensation and, if
applicable, in boxes 3 and 5 as social security and Medicare wages. Although not required, you may include the total value
of fringe benefits in box
14 (or on a separate statement). However, if you provided your employee a vehicle and included 100% of its annual lease value
in the employee's
income, you
must separately report this value to the employee in box 14 (or on a separate statement). The employee can then figure the
value of any business use of the vehicle and report it on Form 2106, Employee Business Expenses. Also see Pub. 15-B for more
information.
If you used the commuting rule or the vehicle cents-per-mile rule to value the personal use of the vehicle, you cannot include
100% of the value of
the use of the vehicle in the employee's income. See Pub. 15-B.
Golden parachute payments.
Include any golden parachute payments in boxes 1, 3, and 5 of Form W-2. Withhold federal income, social
security, and Medicare taxes as usual and report them in boxes 2, 4, and 6, respectively. Excess parachute payments are also
subject to a 20% excise
tax. If the excess payments are considered wages, withhold the 20% excise tax and include it in box 2 as income tax withheld.
Also report the excise
tax in box 12 with code
K. For definitions and additional information, see Regulations section 1.280G-1 and Rev. Proc. 2003-68. You can
find Rev. Proc. 2003-68 on page 398 of Internal Revenue Bulletin 2003-34 at
www.irs.gov/pub/irs-irbs/irb03-34.pdf.
Government employers.
Federal, state, and local agencies have two options for reporting their employees' wages that are subject
only to Medicare tax for part of the year and full social security and Medicare taxes for part of the year.
Option one (which the SSA prefers) is to file a single Form W-2 reflecting the employees' wages for the entire year, even if only part
of the year's wages was subject to both social security and Medicare taxes. The Form W-3 must have the “
941” box checked in box b. The wages in
box 5 must be equal to or greater than the wages in box 3 on Form W-2.
Option two is to file two Forms W-2 and two Forms W-3. File one Form W-2 for wages subject to Medicare tax only. Be sure to check the
“
Medicare govt. emp.” box in box b of Form W-3. File the second Form W-2 for wages subject to both social security and Medicare taxes with the
“
941” box checked in box b of Form W-3. The wages in box 5 on each Form W-2 must be equal to or greater than the wages in
box 3 on that same Form W-2.
Group-term life insurance.
If you paid for group-term life insurance over $50,000 for an employee or a former employee, you must
report the taxable cost of excess coverage, determined by using the table in section 2 of Pub. 15-B, in boxes 1, 3, and 5
of Form W-2. Also, show the
amount in box 12 with code
C. For employees, you must withhold social security and Medicare taxes, but not federal income tax. Former
employees must pay the employee part of social security and Medicare taxes on the taxable cost of group-term life insurance
over $50,000 on Form 1040.
You are not required to collect those taxes. However, you must report the uncollected social security tax with code
M and the uncollected
Medicare tax with code
N in box 12 of
Form W-2.
Health Savings Account (HSA).
An
employer's contribution (including an employee's contributions through a cafeteria
plan) to an employee's HSA is not subject to federal income tax withholding, or social security, Medicare, or railroad retirement
taxes (or FUTA tax)
if it is reasonable to believe at the time of the payment that the contribution will be excludable from the employee's income.
However, if it is not
reasonable to believe at the time of payment that the contribution will be excludable from the employee's income, employer
contributions are subject
to federal income tax withholding and social security and Medicare taxes (or railroad retirement taxes, if applicable) and
FUTA tax and must be
reported in boxes 1, 3, and 5 (and on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return).
You must report all employer contributions to an HSA in
box 12 of Form W-2 with code
W. Employer contributions to an HSA that are not excludable from the income of the employee also must be
reported in boxes 1, 3, and 5.
An
employee's contributions to an HSA (unless made through a cafeteria plan) are includible in income as wages and are subject to
federal income tax withholding and social security and Medicare taxes (or railroad retirement taxes, if applicable). Employee
contributions are
deductible, within limits, on the employee's Form 1040. For more information about HSAs, see Notice 2004-2 and Notice 2004-50.
You can find Notice
2004-2 on page 269 of Internal Revenue Bulletin 2004-2 at
www.irs.gov/pub/irs-irbs/irb04-02.pdf. You can find Notice 2004-50 on
page 196 of Internal Revenue Bulletin 2004-33 at
www.irs.gov/pub/irs-irbs/irb04-33.pdf. Also see Form 8889, Health
Savings Accounts (HSAs), and Pub. 969.
Lost Form W-2—reissued statement.
If an employee loses a Form W-2, write “
REISSUED STATEMENT” on the new copy and furnish it to the employee.
You do not have to add “
REISSUED STATEMENT” on Forms W-2 provided to employees electronically.
Do not send Copy A of the reissued Form W-2
to the SSA. Employers are not prohibited (by the Internal Revenue Code) from charging a fee for the issuance of a duplicate Form W-2.
Moving expenses.
Report moving expenses as follows:
-
Qualified moving expenses that an employer paid to a third party on behalf of the employee (for example, to a moving company)
and services
that an employer furnished in kind to an employee are not reported on Form W-2.
-
Qualified moving expense reimbursements paid directly to an employee by an employer are reported only in box 12 of Form W-2
with code
P.
-
Nonqualified moving expense reimbursements are reported in boxes 1, 3, and 5 of Form W-2. These amounts are subject to federal
income tax
withholding and social security and Medicare taxes (or railroad retirement taxes, if applicable).
Nonqualified deferred compensation plans.
Section 409A, added by the American Jobs Creation Act of 2004, provides that all amounts deferred under a nonqualified
deferred compensation (NQDC)
plan for all tax years are currently includible in gross income unless certain requirements are met. If section 409A requires
an amount to be included
in gross income, the section imposes a substantial additional tax. Section 409A, generally, is effective with respect to amounts
deferred in tax years
beginning after December 31, 2004, but deferrals made prior to that year may be subject to section 409A under some circumstances.
The Act requires reporting of the
yearly deferrals (plus earnings) under a section 409A nonqualified deferred compensation plan, using
code
Y in box 12. For more information, see section 5 of Pub. 15-A.
Income included under section 409A from a nonqualified deferred compensation plan will be reported in box 1, and in box 12 using code
Z. This income is also subject to an additional tax reported on Form 1040. For more information, see section 5 of Pub. 15-A.
See Notice
2007-100 at
www.irs.gov/pub/irs-drop/n-07-100.pdf for
more information on amounts includible in gross income.
Railroad employers.
Railroad employers must file Form W-2 to report their employees' wages and income tax withholding in boxes 1
and 2. Electronic reporting may be required; see
Electronic reporting on page 3. If you have both FICA employees and RRTA employees, you
must file a separate Form W-3 to transmit the Forms W-2 for each group of employees.
If an employee is covered by social security and Medicare, also complete boxes 3, 4, 5, 6, and 7 of Form W-2 to show
the social security and
Medicare wages and the amounts withheld for social security and Medicare taxes. On the Form W-3 used to transmit these Forms
W-2, check the “
941”
box in box b.
For employees covered by RRTA tax, you also must report the Tier I and Tier II taxes withheld in box 14 of Form W-2.
Label them “
Tier I tax”
and “
Tier II tax.” Boxes 3, 4, 5, 6, and 7 apply only to covered social security and Medicare employees and are not to be used to report railroad
retirement wages and taxes. On the Form W-3 used to transmit these Forms W-2, check the “
CT-1” box in box b.
Repayments.
If an employee repays you for wages received in error, do not offset the repayments against
current year's wages unless the repayments are for amounts received in error in the current year. Repayments made in the current
year, but related to
a prior year or years, must be repaid in gross, not net, and require special tax treatment by employees in some cases. You
may advise the employee of
the total repayments made during the current year and the amount (if any) related to prior years. This information will help
the employee account for
such repayments on his or her federal income tax return.
If the repayment was for a prior year, you must file Form W-2c with the SSA to correct only social security and Medicare
wages and taxes.
Do
not correct “Wages” in box 1 on Form W-2c for the amount paid in error. For information on reporting adjustments to Form 941, Form 943, or
Form 944, see section 13 of Pub. 15 (Circular E) or section 9 of Pub. 51 (Circular A).
Tell your employee that the wages paid in error in a prior year remain taxable to him or her for that year. This is because
the employee received
and had use of those funds during that year. The employee is not entitled to file an amended return (Form 1040X) to recover
the income tax on these
wages. Instead, the employee is entitled to a deduction (or a credit, in some cases) for the repaid wages on his or her Form
1040 for the year of
repayment.
Scholarship and fellowship grants.
Give a Form W-2 to each recipient of a scholarship or fellowship grant only if you are reporting amounts includible
in income under section 117(c) (relating to payments for teaching, research, or other services required as a condition for
receiving the qualified
scholarship). Also see Pub. 15-A and Pub. 970. These payments are subject to federal income tax withholding. However, their
taxability for social
security and Medicare taxes depends on the nature of the employment and the status of the organization. See
Students in section 15 of Pub.
15 (Circular E).
Sick pay.
If you had employees who received sick pay in 2008 from an insurance company or other third-party payer and the third
party notified you of the amount of sick pay involved, you may be required to report the information on the employees' Forms
W-2. If the insurance
company or other third-party payer did not notify you in a timely manner about the sick pay payments, it must prepare Forms
W-2 and W-3 for your
employees showing the sick pay. For specific reporting instructions, see
Sick Pay Reporting in section 6 of Pub. 15-A.
SIMPLE retirement account.
An
employee's salary reduction contributions to a SIMPLE (savings incentive match plan for
employees) retirement account are not subject to federal income tax withholding but are subject to social security, Medicare,
and railroad retirement
taxes. Do not include an employee's contribution in box 1 but do include it in boxes 3 and 5. An employee's total contribution
also must be included
in box 12 with code
D or
S.
An
employer's matching or nonelective contribution to an employee's SIMPLE is not subject to federal income tax withholding or social
security, Medicare, or railroad retirement taxes and is not to be shown on Form W-2.
See Notice 98-4, 1998-1 C.B. 269, for more information on SIMPLE retirement accounts. You can find Notice 98-4 on
page 25 of Internal Revenue
Bulletin 1998-2 at
www.irs.gov/pub/irs-irbs/irb98-02.pdf.
Successor/predecessor employers.
If you buy or sell a business during the year, see Rev. Proc. 2004-53 for information on who
must file Forms W-2 and employment tax returns. You can find Rev. Proc. 2004-53 on page 320 of Internal Revenue Bulletin 2004-34
at
www.irs.gov/pub/irs-irbs/irb04-34.pdf.
Terminating a business.
If you terminate your business, you must provide Forms W-2 to your employees for the calendar year of
termination by the due date of your final Form 941. You must also file Forms W-2 with the SSA by the last day of the month
that follows the due date
of your final Form 941. If filing on paper, make sure you obtain Forms W-2 and W-3 preprinted with the correct year. If filing
electronically, make
sure your software has been updated for the current tax year.
However, if any of your employees are immediately employed by a successor employer, see
Successor/predecessor employers above. Also, see
Rev. Proc. 96-57, 1996-2 C.B. 389 for information on automatic extensions for furnishing Forms W-2 to employees and filing
Forms W-2. You can find
Rev. Proc. 96-57 on page 14 of Internal Revenue Bulletin 1996-53 at
www.irs.gov/pub/irs-irbs/irb96-53.pdf.
Get Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, for information
on reconciling
wages and taxes reported on Forms W-2 with amounts reported on Forms 941, Form 943, or Form 944.
Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) makeup amounts to a pension plan.
If an employee returned to your employment after military service and certain makeup amounts were
contributed to a pension plan for a prior year(s) under the USERRA, report the prior year contributions separately in
box 12. See the
TIP above
Code D on page 12. You also may report certain makeup amounts in box 14. See
Box 14—Other on page 14.
Instead of reporting in box 12 (or box 14),
you may choose to provide a separate statement to your employee showing USERRA makeup
contributions. The statement must identify the type of plan, the year(s) to which the contributions relate, and the amount contributed for
each
year.
Specific Instructions for Form W-2
How to complete Form W-2.
Form W-2 is a six-part form.
Please ensure that all copies are legible. Send Copy A to
the SSA; Copy 1 to your state, city, or local tax department; and Copies B, C, and 2 to your employee. Keep Copy D, and a
copy of Form W-3, with
your records for 4 years.
Type the entries on Form W-2 using black ink in 12-point Courier font, if possible. Because Copy A is read by machine, handwritten
entries or the use of inks other than black to make entries on the form hinder processing by the SSA. Do not use script type,
inverted font, italics,
or dual case alpha characters. It is important that entries in the boxes do not cross one or more of the vertical or horizontal
lines that separate
the boxes. Please do not erase, whiteout, or strike over an entry.
Make all dollar entries on Copy A without the dollar sign and comma but with
the decimal point (00000.00). Show the cents portion of the money amounts. If a box does not apply, leave it blank.
Send the whole Copy A page of Form W-2 with Form W-3 to the SSA even if one of the Forms W-2 on the page is blank or void.
Do not staple
Forms W-2 together or to Form W-3. Also, if possible, please file Forms W-2 either alphabetically by employees' last names
or numerically by
employees' SSNs. This will help the SSA to locate specific forms.
Calendar year basis.
The entries on Form W-2 must be based on wages paid during the calendar year. Use Form W-2 for the correct
tax year. For example, if the employee worked from December 21, 2008, through January 3, 2009, and the wages for that period
were paid on January 5,
2009, include those wages on the 2009 Form W-2.
Multiple forms.
If necessary, you can issue more than one Form W-2 to an employee. For example, you may
need to report more than four coded items in box 12 or you may want to report other compensation on a second form. If you
issue a second Form W-2,
complete boxes b, c, d, e, and f with the same information as on the first Form W-2. Show any items that were not included
on the first Form W-2 in
the appropriate boxes. Also, see the
TIP below
Box 12—Codes on page 11.
Do not report the same federal tax data to the SSA on more than one Copy A.
For each Form W-2 showing an amount in box 3 or box 7, make certain that box 5 equals or exceeds the sum of boxes 3 and 7.
Void.
Check this box when an error is made on Form W-2 and you are voiding it because you are going to
complete a new Form W-2.
Be careful not to include any amounts shown on “Void” forms in the totals that you enter on Form W-3.
See
Corrections on page 4.
Box a—Employee's social security number.
Enter the number shown on the employee's social security card. If the employee does not have a card, he or
she should apply for one by completing Form SS-5, Application for a Social Security Card.
If the employee has applied for a card but the number is not received in time for filing, enter “
Applied For” in box
a on paper
Forms W-2 filed with the SSA. (Enter zeros (000-00-0000) if Form W-2 is filed electronically with the SSA.)
Ask the employee to inform you of the number and name as they are shown on the social security card when it is received.
Then correct your previous
report by filing Form W-2c showing the employee's SSN. If the employee needs to change his or her name from that shown on
the card, the employee
should call the SSA at 1-800-772-1213.
If you do not provide the correct employee name and TIN on Form W-2, you may owe a penalty unless you have reasonable
cause. For more information,
see Publication 1586, Reasonable Cause Regulations and Requirements for Missing/Incorrect Name/TINs.
Box b—Employer identification number (EIN).
Show the employer identification number (EIN) assigned to you by the IRS (00-0000000). This
should be the same number that you used on your federal employment tax returns (Form 941, Form 943, Form 944, Form CT-1, or
Schedule H (Form 1040)).
Do not use a prior owner's EIN. If you do not have an EIN when filing Forms W-2, enter “
Applied For” in box b; do not use your SSN. You can get
an EIN by applying online at
www.irs.gov, by calling the toll-free number 1-800-829-4933, or by filing Form
SS-4, Application for Employer Identification Number. Also see
Agent reporting on page 4.
Box c—Employer's name, address, and ZIP code.
This entry should be the same as shown on your Form 941, Form 943, Form 944, Form CT-1, or Schedule H (Form 1040).
Also see
Agent reporting
on page 4.
Box d—Control number.
You may use this box to identify individual Forms W-2. You do not have to use this box.
Boxes e and f—Employee's name and address.
Enter the name as shown on your employee's social security card (first, middle initial, last). Generally, do not enter
“
Jr.,” “
Sr.,”
etc., in the “
Suff.” box on Copy A
unless the suffix appears on the card. However, SSA still prefers that you do not enter the suffix
on Copy A. If the name does not fit, you may show first name initial, middle initial, and last name (and ignore the vertical
line). If the name has
changed, the employee must get a corrected card from any SSA office. Use the name on the original card until you see the corrected
one.
Do not
show titles or academic degrees, such as “Dr.,” “RN,” or “Esq.,” at the beginning or end of the employee's name.
Include in the address the number, street, apartment or suite number (or P.O. box number if mail is not delivered
to a street address). For a
foreign address, give the information in the following order: city, province or state, and country. Follow the country's practice
for entering the
postal code. Do not abbreviate the country name.
Third-party payers of sick pay filing third-party sick pay recap Forms W-2 and W-3 must enter “
Third-Party Sick Pay Recap” in place of the
employee's name in box e. Also,
do not enter the employee's SSN in box
a. See
Sick Pay Reporting in section 6 of Pub.
15-A.
Box 1—Wages, tips, other compensation.
Show the total taxable wages, tips, and other compensation (before any payroll deductions) that you paid to your employee
during the year. However, do not include elective deferrals (such as employee contributions to a section 401(k) or 403(b)
plan) except section
501(c)(18) contributions.
Include the following:
-
Total wages, bonuses (including signing bonuses), prizes, and awards paid to employees during the year. See Calendar year basis
above.
-
Total noncash payments, including certain fringe benefits. See Fringe benefits on page 6.
-
Total tips reported by the employee to the employer (not allocated tips).
-
Certain employee business expense reimbursements (see Employee business expense
reimbursements on
page 5).
-
The cost of accident and health insurance premiums for 2% or more shareholder-employees paid by an S corporation.
-
Taxable benefits from a section 125 (cafeteria) plan (that is, employee chooses cash).
-
Employee contributions to an Archer MSA.
-
Employer contributions to an Archer MSA if includible in the income of the employee. See Archer MSA on page
4.
-
Employer contributions for qualified long-term care services to the extent that such coverage is provided through a flexible
spending or similar arrangement.
-
Taxable cost of group-term life insurance in excess of $50,000. See Group-term life insurance on page 6.
-
Unless excludable under Educational assistance programs (see page 5), payments for
non-job-related education expenses or for payments under a nonaccountable plan. See Pub. 970.
-
The amount includible as wages because you paid your employee's share of social security and
Medicare taxes. See Employee's social security and Medicare taxes paid by employer on page 6. If you also paid your employee's income tax
withholding, treat the grossed-up amount of that withholding as supplemental wages and report those wages in boxes 1, 3, 5,
and 7. No exceptions to
this treatment apply to household or agricultural wages.
-
Designated Roth contributions made under a section 401(k) plan or under a section 403(b) salary
reduction agreement. See Designated Roth contributions on page 5.
-
Distributions to an employee or former employee from a nonqualified deferred compensation plan (including a rabbi trust) or
a nongovernmental section 457(b) plan.
-
Amounts includible in income under section 457(f) because the amounts are no longer subject to a substantial risk of forfeiture.
-
Payments to statutory employees who are subject to social security and Medicare taxes but not subject to federal income tax
withholding must
be shown in box 1 as other compensation. See Statutory employee
on page 13.
-
Cost of current insurance protection under a compensatory split-dollar life insurance arrangement.
-
Employee contributions to a Health Savings Account (HSA).
-
Employer contributions to an HSA if includible in the income of the employee. See Health Savings
Account (HSA) on page 6.
-
Amounts includible in income under a nonqualified deferred compensation plan because of section 409A. See Nonqualified
deferred compensation plans on page 6.
-
All other compensation, including certain scholarship and fellowship grants (see page 7). Other compensation includes taxable
amounts that
you paid to your employee from which federal income tax was not withheld. You may show other compensation on a separate Form
W-2. See Multiple
forms on page 9.
Box 2—Federal income tax withheld.
Show the total federal income tax withheld from the employee's wages for the year (do not reduce the wages by
any advance EIC payments made to the employee). Include the 20% excise tax withheld on excess parachute payments. See
Golden parachute payments
on page 6.
Box 3—Social security wages.
Show the total wages paid (before payroll deductions) subject to employee social security tax but
not including
social security tips and
allocated tips. See
Box 7—Social security tips and
Box 8—Allocated tips on page 11. Generally, noncash payments are considered to be wages. Include employee business expense
reimbursements reported in box 1. If you paid the employee's share of social security and Medicare taxes rather than deduct
