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program. Also include adoption benefits paid or reimbursed

retailers, contractors, or operators of hotels, restaurants, or

from the pre-tax contributions made by the employee to a

other similar establishments. The goods sold must be

section 125 (cafeteria) plan. However, do not include

merchandise for resale or supplies for use in the buyer’s

adoption benefits forfeited from a section 125 (cafeteria)

business operation. The work performed for you must be the

plan. Report all amounts including those in excess of the

salesperson’s principal business activity.

$10,960 exclusion.

For details on statutory employees and common-law

employees, see section 1 in Pub. 15-A.

Code V — Income from the exercise of nonstatutory

•

Retirement plan. Check this box if the employee was an

stock option(s). Show the spread (that is, the fair market

“active participant” (for any part of the year) in any of the

value of stock over the exercise price of option(s) granted to

following:

your employee with respect to that stock) from your

employee’s (or former employee’s) exercise of nonstatutory

1. A qualified pension, profit-sharing, or stock-bonus plan

stock option(s). Include this amount in boxes 1, 3 (up to the

described in section 401(a) (including a 401(k) plan).

social security wage base), and 5.

2. An annuity plan described in section 403(a).

3. An annuity contract or custodial account described in

This reporting requirement does not apply to the exercise

section 403(b).

of a statutory stock option, or the sale or disposition of stock

4. A simplified employee pension (SEP) plan described

acquired pursuant to the exercise of a statutory stock option.

in section 408(k).

For more information concerning stock options, see Pub.

5. A SIMPLE retirement account described in section

15-B.

408(p).

Code W — Employer contributions to a Health

6. A trust described in section 501(c)(18).

Savings Account (HSA). Show any employer contributions

7. A plan for federal, state, or local government

(including amounts the employee elected to contribute using

employees or by an agency or instrumentality thereof (other

a section 125 (cafeteria) plan) to a Health Savings Account

than a section 457(b) plan).

(HSA). See Health Savings Account (HSA) on page 6.

Generally, an employee is an active participant if

Code Y — Deferrals under a section 409A nonqualified

covered by (a) a defined benefit plan for any tax year that he

deferred compensation plan. Include current year

or she is eligible to participate or (b) a defined contribution

deferrals under a section 409A nonqualified deferred

plan (for example, a section 401(k) plan) for any tax year

compensation plan. Any earnings during the year on current

that employer or employee contributions (or forfeitures) are

year and prior year deferrals must also be reported here.

added to his or her account. For additional information on

See Nonqualified deferred compensation plans on page 7.

employees who are eligible to participate in a plan, contact

your plan administrator. For details on the active participant

Code Z — Income under section 409A on a

rules, see Notice 87-16, 1987-1 C.B. 446, Notice 98-49,

nonqualified deferred compensation plan. Show any

1998-2 C.B. 365, section 219(g)(5), and Pub. 590, Individual

income under section 409A on a nonqualified deferred

Retirement Arrangements (IRAs). You can find Notice 98-49

compensation plan that was included in box 1. This income

on page 5 of Internal Revenue Bulletin 1998-38 at

is also subject to an additional tax reported on the

employee’s Form 1040. See Nonqualified deferred

compensation plans on page 7.

Do not check this box for contributions made to a

Code AA — Designated Roth contributions to a

TIP

nonqualified or section 457(b) plan.

section 401(k) plan. Use this code to report designated

Roth contributions to a section 401(k) plan. Do not use this

•

Third-party sick pay. Check this box only if you are a

code to report elective deferrals under code D. See

third-party sick pay payer filing a Form W-2 for an insured’s

Designated Roth contributions on page 5.

employee or are an employer reporting sick pay payments

Code BB — Designated Roth contributions under a

made by a third party. See Sick Pay Reporting in section 6

section 403(b) salary reduction agreement. Use this

of Pub. 15-A.

code to report designated Roth contributions under a section

Box 14 — Other. The lease value of a vehicle provided to

403(b) salary reduction agreement. Do not use this code to

report elective deferrals under code E. See Designated Roth

your employee and reported in box 1 must be reported here

contributions on page 5.

or on a separate statement to your employee. You may also

use this box for any other information that you want to give

Box 13 — Checkboxes. Check all boxes that apply.

•

to your employee. Please label each item. Examples

Statutory employee. Check this box for statutory

include state disability insurance taxes withheld, union dues,

employees whose earnings are subject to social security

uniform payments, health insurance premiums deducted,

and Medicare taxes but not subject to federal income tax

nontaxable income, educational assistance payments, or a

withholding. Do not check this box for common-law

member of the clergy’s parsonage allowance and utilities. In

employees. There are workers who are independent

addition, you may enter the following contributions to a

contractors under the common-law rules but are treated by

pension plan: (a) nonelective employer contributions made

statute as employees. They are called statutory employees.

on behalf of an employee, (b) voluntary after-tax

1. A driver who distributes beverages (other than milk),

contributions (but not designated Roth contributions) that

or meat, vegetable, fruit, or bakery products; or who picks

are deducted from an employee’s pay, (c) required

up and delivers laundry or dry cleaning if the driver is your

employee contributions, and (d) employer matching

agent or is paid on commission.

contributions.

2. A full-time life insurance sales agent whose principal

business activity is selling life insurance or annuity

If you are reporting prior year contributions under

contracts, or both, primarily for one life insurance company.

USERRA (see the TIP above Code D on page 12 and

3. An individual who works at home on materials or

USERRA makeup amounts to a pension plan on page 7),

goods that you supply and that must be returned to you or to

you may report in box 14 makeup amounts for nonelective

a person you name if you also furnish specifications for the

employer contributions, voluntary after-tax contributions,

work to be done.

required employee contributions, and employer matching

4. A full-time traveling or city salesperson who works on

contributions. Report such amounts separately for each

your behalf and turns in orders to you from wholesalers,

year. Railroad employers, see page 7.

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Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2006 Page 17

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