Breaking Down the W-2 Form: What Each Box Means for Your Taxes 1099 National Software

1141, General Rules and Specifications for Substitute Forms W-2 and W-3. 1141 is a revenue procedure that explains the requirements for format and content of substitute Forms W-2 and W-3. For 2025, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $3,300. The salary reduction contribution limitation of $3,300 does not include any amount carried over from a previous year. For more information, see Health flexible spending arrangement (FSA) .

How NQDC Plans Are Taxed

However, section 6103 allows or requires the Internal Revenue Service to disclose or give the information shown on your return to others as described in the Code. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. This number is assigned by the individual state where your business is located. However, you may want to complete this item if you use copies of this form for your state returns. Check this box if you are a military employer correcting Forms W-2 for members of the uniformed services.

The amounts to enter in boxes 1 through 19, described next, are totals from only the Forms W-2 (excluding any Forms W-2 marked “VOID”) that you are sending with this Form W-3. If the employee later provides proof of MEC establishing eligibility for a lesser value permitted benefit, report this lesser value permitted benefit on Form W-2. This reporting requirement does not apply to the exercise of a statutory stock option, or the sale or disposition of stock acquired pursuant to the exercise of a statutory stock option. For more information about the taxability of employee stock options, see Pub.

• The, the IRS did change reporting requirements for 2022.
• If the name has changed, the employee must get a corrected social security card from any SSA office.
• The amount an employee chooses to defer reduces their taxable income and the amount deferred is not taxed until they receive the funds, usually in retirement.
• Report distributions to an employee from a nonqualified plan or nongovernmental section 457(b) plan in box 11.
• This does not affect extensions of time to furnish Forms W-2 to employees.

If you are correcting more than one kind of form, please group forms of the same kind of payer/employer combination, and send them in separate groups. File Form W-3c 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 Employee’s incorrect address on Form W-2 , later, for information on correcting an employee’s address. See Correcting an incorrect tax year and/or EIN incorrectly reported on Form W-2 or Form W-3 , later, if an error was made on a previously filed Form W-3. Use this code to report the cost of employer-sponsored health coverage. Additional reporting guidance, including information about the transitional reporting rules that apply, is available on IRS.gov at Affordable Care Act (ACA) Tax Provisions.

Code FF—Permitted benefits under a qualified small employer health reimbursement arrangement.

You are not required to complete box 12 with code Y (Deferrals under a section 409A nonqualified deferred compensation plan). Section 409A provides that all amounts deferred under a nonqualified deferred compensation (NQDC) plan for all tax years are includible in gross income unless certain requirements are satisfied. See Nonqualified deferred compensation plans under Special Reporting Situations for Form W-2 and the Nonqualified Deferred Compensation Reporting Example Chart.

Extension of time to file Forms W-2 with the SSA.

Retain your reconciliation information in case you receive inquiries from the IRS or the SSA. Payroll service providers, enter your client’s information for these fields. Check this box if you are a state or local government or instrumentality, and you have received a determination letter from the IRS indicating that you are also a tax-exempt organization under section 501(c)(3). Do not report either section 457(b) or section 457(f) amounts that are subject to a substantial risk of forfeiture. Do not show titles or academic degrees, such as “Dr.,” “RN,” or “Esq.,” at the beginning or end of the employee’s name.

One Form W-2 correctly reported social security wages of $20,000. The other Form W-2 incorrectly reported social security wages of $30,000, whereas $25,000 should have been reported. The other Form W-2 incorrectly reported social security wages of $30,000.

• 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).
• Use Form W-2c to correct errors on Forms W-2, W-2AS, W-2CM, W-2GU, W-2VI, or W-2c filed with the SSA.
• 1141 prohibits advertising on Form W-2 and envelopes containing Form W-2.
• If Sam’s employer 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 day of reckoning will come when you start to collect your deferred compensation.
• For example, Code EE represents designated Roth contributions under a government 457(b) plan, which are taxed differently from traditional deferrals.

Taxation on Non-Qualified Deferred Compensation Plans

Two Forms W-2 were filed under the same EIN, but only one should have been filed. To correct an incorrect tax year and/or EIN on a previously submitted Form W-2 or Form W-3, you must prepare two sets of Forms W-2c and W-3c. Use Form W-3c to send Copy A of Form W-2c to the SSA.

What Are the Types of Non-Qualified Plans?

If an employee dies during the year, you must report the accrued wages, vacation pay, and other compensation paid after the date of death. Requests for an extension of time to furnish Forms W-2 to employees are not automatically granted. If approved, an extension will generally be granted for no more than 15 days from the due date, unless the need for up to a total of 30 days is clearly shown.

You may request only one extension of time to file Form W-2 with the SSA by submitting a complete application on Form 8809, Application for Extension of Time To File Information Returns. When completing the Form 8809, indicate that at least one of the criteria on the form and instructions for granting an extension applies. You must sign the application under penalties of perjury. Send the application to the address shown on Form 8809.

Visit the SSA’s Employer W-2 Filing Instructions & Information website at SSA.gov/employer for more information about using BSO to save time for your organization. Here you will also find forms and publications used for wage reporting, information about verifying employee social security numbers box 11 nonqualified plans online, how to reach an SSA employer services representative for your region, and more. Deferred compensation plans affect income reporting and tax withholding.

Also see E-filing and E-filing Forms W-2c and W-3c . Unless otherwise noted, references to Medicare tax include Additional Medicare Tax. Do not write “corrected” or “amended” on any resubmitted reports. The SSA will reject Form W-2 electronic and paper wage reports under the following conditions. Rejected wage reports from the Social Security Administration (SSA).

I have a client who has a W-2 with a fairly large amount listed in box 11 (nonqualified plans). I have input the W2 as shown, but when I go to form view, the amount of wages on line 1a on the Form 1040 is reducing taxable wages by the amount of nonqualified plans. Complete these boxes to correct Medicare wages and tips and Medicare tax withheld. Box 5 must equal or exceed the sum of boxes 3 and 7. Check this box if you are a railroad employer sending Forms W-2 for employees covered under the RRTA. Do not show employee RRTA tax in boxes 3 through 7.