Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2017 Page 10
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33compensation and, if applicable, in boxes 3 and 5 as
Federal employers in the CNMI. The U.S. Treasury
social security and Medicare wages. Although not
Department and the CNMI Division of Revenue and
required, you may include the total value of fringe benefits
Taxation entered into an agreement under 5 U.S.C. 5517
in box 14 (or on a separate statement). However, if you
(“5517 agreement”) in December 2006. Under this
provided your employee a vehicle and included 100% of
agreement, all federal employers (including the
its annual lease value in the employee's income, you must
Department of Defense) are required to withhold CNMI
separately report this value to the employee in box 14 (or
income taxes, rather than federal income taxes, and
on a separate statement). The employee can then figure
deposit the CNMI taxes with the CNMI Treasury for
the value of any business use of the vehicle and report it
employees who are subject to CNMI taxes and whose
on Form 2106, Employee Business Expenses. Also see
regular place of federal employment is in the CNMI.
Pub. 15-B for more information.
Federal employers are also required to file quarterly and
annual reports with the CNMI Division of Revenue and
If you used the commuting rule or the vehicle
Taxation. For questions, contact the CNMI Division of
cents-per-mile rule to value the personal use of
!
Revenue and Taxation.
the vehicle, you cannot include 100% of the value
CAUTION
of the use of the vehicle in the employee's income. See
Federal employers may use Form W-2 (rather than
Pub. 15-B.
Forms W-2CM or OS-3710) to report income taxes
withheld and paid to CNMI, as well as to report social
Golden parachute payments (not applicable to
security and Medicare taxes. Use the state boxes 15, 16,
Forms W-2AS, W-2CM, W-2GU, or W-2VI). Include any
and 17 for CNMI income tax reporting. See Specific
golden parachute payments in boxes 1, 3, and 5 of Form
Instructions for Form W-2 for boxes 15, 16, and 17, later.
W-2. Withhold federal income, social security, and
This rule applies only to income tax reporting. Federal
Medicare taxes (or railroad retirement taxes, if applicable)
employers should withhold and report social security and
as usual and report them in boxes 2, 4, and 6,
Medicare taxes for these employees in the same way as
respectively. (Use box 14 if railroad retirement taxes
for other federal employees. For more information, go to
apply.) Excess parachute payments are also subject to a
IRS.gov/individuals/international-taxpayers/special-
20% excise tax. If the excess payments are considered
withholding-rules-for-us-federal-agency-employers-with-
wages, withhold the 20% excise tax and include it in box 2
employees-in-cnmi-or-puerto-rico.
as income tax withheld. Also report the excise tax in
Foreign agricultural workers. You must report
box 12 with code K. For definitions and additional
compensation of $600 or more paid in a calendar year to
information, see Regulations section 1.280G-1 and Rev.
an H-2A visa agricultural worker for agricultural labor. If
Proc. 2003-68, 2003-34 I.R.B. 398, available at
IRS.gov/
the H-2A visa agricultural worker furnishes a valid
irb/2003-34_IRB/ar16.html.
taxpayer identification number, report these payments in
Government employers. Federal, state, and local
box 1 of Form W-2. If the worker does not furnish a valid
governmental agencies have two options for reporting
taxpayer identification number, report the payments on
their employees' wages that are subject to only Medicare
Form 1099-MISC. See Form 1099-MISC below.
tax for part of the year and both social security and
On Form W-2, no amount should be reported in boxes
Medicare taxes for part of the year.
3 or 5. In most cases, you do not need to withhold federal
The first option (which the SSA prefers) is to file a
income tax from compensation paid to H-2A visa
single set of Forms W-2 per employee for the entire year,
agricultural workers. Employers should withhold federal
even if only part of the year's wages are subject to both
income tax only if the H-2A visa agricultural worker and
social security and Medicare taxes. Check “941” (or “944”)
the employer agree to withhold. The H-2A visa agricultural
in box b of Form W-3 or check “941-SS” in box b of Form
worker must provide a completed Form W-4. If the
W-3SS. The wages in box 5 of Form W-2 must be equal to
employer withholds income tax, the employer must report
or greater than the wages in box 3 of Form W-2.
the tax withheld in box 2 of Form W-2 and on line 8 of
Form 943. See Pub. 51 (Circular A).
The second option is to file one set of Forms W-2 for
Form 1099-MISC. If the H-2A visa agricultural worker
wages subject only to Medicare tax and another set for
wages subject to both social security and Medicare taxes.
fails to furnish a taxpayer identification number to the
Use a separate Form W-3 to transmit each set of Forms
employer, and the total annual payments made to the
W-2. For the Medicare-only Forms W-2, check “Medicare
H-2A visa agricultural worker are $600 or more, the
employer must begin backup withholding on the payments
govt. emp.” in box b of Form W-3. For the Forms W-2
made until the H-2A visa agricultural worker furnishes a
showing wages subject to both social security and
valid taxpayer identification number. Employers must
Medicare taxes, check “941” (or “944”) in box b of Form
report the compensation paid and any backup withholding
W-3 or check “941-SS” in box b of Form W-3SS. The
on Forms 1099-MISC and Form 945, Annual Return of
wages in box 5 of Form W-2 must be equal to or greater
Withheld Federal Income Tax. See the 2017 Instructions
than the wages in box 3 of Form W-2.
for Form 1099-MISC and the 2017 Instructions for Form
Group-term life insurance. You must include in boxes
945.
1, 3, and 5 (or 14, if railroad retirement taxes apply) the
For more information, enter “foreign agricultural
cost of group-term life insurance that is more than the cost
workers” in the search box on IRS.gov.
of $50,000 of coverage, reduced by the amount the
employee paid toward the insurance. Use Table 2-2 in
Fringe benefits. Include all taxable fringe benefits in
Pub. 15-B to determine the cost of the insurance. Also,
box 1 of Form W-2 as wages, tips, and other
show the amount in box 12 with code C. For employees,
-10-
General Instructions for Forms W-2 and W-3 (2017)
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