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For employees who were 50 years of age or older at any

governmental or nongovernmental section 457(b)

time during the year and made elective deferral and/or

deferred compensation plan. Do not report either section

designated Roth “catch-up” contributions, report the elective

457(b) or section 457(f) amounts that are subject to a

deferrals and the elective deferral “catch-up” contributions

substantial risk of forfeiture.

as a single sum in box 12 using the appropriate code, and

Code H — Elective deferrals to a section 501(c)(18)(D)

the designated Roth contributions and designated Roth

tax-exempt organization plan. Be sure to include this

“catch-up” contributions as a single sum in box 12 using the

amount in box 1 as wages. The employee will deduct the

appropriate code.

amount on his or her Form 1040.

If any elective deferrals, salary reduction amounts, or

Code J — Nontaxable sick pay. Show any sick pay that

TIP

nonelective contributions to a section 457(b) plan

was paid by a third-party and was not includible in income

during the year are makeup amounts under the

(and not shown in boxes 1, 3, and 5) because the employee

Uniformed Services Employment and Reemployment Rights

contributed to the sick pay plan.

Act of 1994 (USERRA) for a prior year, you must enter the

Code K — 20% excise tax on excess golden parachute

prior year contributions separately. Beginning with the

payments. If you made excess “golden parachute”

earliest year, enter the code, the year, and the amount. For

payments to certain key corporate employees, report the

example, elective deferrals of $2,250 for 2004 and $1,250

20% excise tax on these payments. If the excess payments

for 2005 under USERRA to a section 401(k) plan are

are considered to be wages, report the 20% excise tax

reported in box 12 as follows:

withheld as income tax withheld in box 2.

D 04 2250.00, D 05 1250.00. The 2006 contribution of

Code L — Substantiated employee business expense

$7,000 does not require a year designation; enter it as D

reimbursements. Use this code only if you reimbursed

7000.00. Report the code (and year for prior year USERRA

your employee for employee business expenses using a per

contributions) to the left of the vertical line in boxes 12a-d.

diem or mileage allowance and the amount that you

The following are not elective deferrals and may be

reimbursed exceeds the amount treated as substantiated

reported in box 14, but not in box 12:

under IRS rules. See Employee business expense

•

Nonelective employer contributions made on behalf of an

reimbursements on page 5.

employee.

Report in box 12 only the amount treated as

•

After-tax contributions that are not designated Roth

substantiated (such as the nontaxable part). In boxes 1, 3

contributions, such as voluntary contributions to a pension

(up to the social security wage base), and 5, include the part

plan that are deducted from an employee’s pay. See the

of the reimbursement that is more than the amount treated

instructions below in codes AA and BB for reporting

as substantiated.

designated Roth contributions.

•

Code M — Uncollected social security or RRTA tax on

Required employee contributions.

•

taxable cost of group-term life insurance over $50,000

Employer matching contributions.

(for former employees). If you provided your former

Code D — Elective deferrals to a section 401(k) cash

employees (including retirees) more than $50,000 of

or deferred arrangement (plan). Also show deferrals

group-term life insurance coverage for periods during which

under a SIMPLE retirement account that is part of a section

an employment relationship no longer exists, enter the

401(k) arrangement.

amount of uncollected social security or RRTA tax on the

coverage in box 12. Also see Group-term life insurance on

Example of reporting elective deferrals and

page 6.

designated Roth contributions to a section 401(k) plan.

For 2006, Employee A (age 45) elected to defer $15,500 to

Code N — Uncollected Medicare tax on taxable cost of

a section 401(k) plan, made a designated Roth contribution

group-term life insurance over $50,000 (for former

of $1,000 to the plan, and made a voluntary (non-Roth)

employees). If you provided your former employees

after-tax contribution of $600. In addition, the employer, on

(including retirees) more than $50,000 of group-term life

A’s behalf, made a qualified nonelective contribution of

insurance coverage for periods during which an employment

$2,000 to the plan and a nonelective profit-sharing employer

relationship no longer exists, enter the amount of

contribution of $3,000.

uncollected Medicare tax or RRTA Medicare tax on the

coverage in box 12. Also see Group-term life insurance on

The total elective deferral of $15,500 is reported in box

page 6.

12 with code D (D 15500.00) and the designated Roth

contribution is reported in box 12 with code AA (AA

Code P — Excludable moving expense

1000.00). Even though the 2006 limit for elective deferrals

reimbursements paid directly to employee. Show the

and designated Roth contributions is $15,000, the employer

total moving expense reimbursements that you paid directly

must separately report the total amount of $15,500 and

to your employee for qualified (deductible) moving

$1,000 in box 12. The excess is not reported in box 1. The

expenses. See Moving expenses on page 6.

return of excess salary deferrals and excess designated

Code Q — Nontaxable combat pay. If you are a military

Roth contributions, including earnings on both, is reported

employer, report any nontaxable combat pay in box 12.

on Form 1099-R.

Code R — Employer contributions to an Archer MSA.

The $600 voluntary after-tax contribution may be reported

Show any employer contributions to an Archer MSA. See

in box 14 (this is optional) but not in box 12. The $2,000

Archer MSA on page 4.

nonelective contribution and the $3,000 nonelective

Code S — Employee salary reduction contributions

profit-sharing employer contribution are not required to be

under a section 408(p) SIMPLE. Show deferrals under a

reported on Form W-2, but may be reported in box 14.

section 408(p) salary reduction SIMPLE retirement account.

Check the “Retirement plan” box in box 13.

However, if the SIMPLE is part of a section 401(k)

Code E — Elective deferrals under a section 403(b)

arrangement, use code D. If you are reporting prior year

salary reduction agreement.

contributions under USERRA, see the TIP above Code D

above.

Code F — Elective deferrals under a section 408(k)(6)

salary reduction SEP.

Code T — Adoption benefit. Show the total that you

Code G — Elective deferrals and employer

paid or reimbursed for qualified adoption expenses

contributions (including nonelective deferrals) to any

furnished to your employee under an adoption assistance

-12-

Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2006 Page 16

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