Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2017 Page 11

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you must withhold social security and Medicare taxes, but
You must report all employer contributions (including
not federal income tax. For coverage provided to former
an employee's contributions through a cafeteria plan) to
employees, the former employees must pay the employee
an HSA in box 12 of Form W-2 with code W. Employer
part of social security and Medicare taxes (or railroad
contributions to an HSA that are not excludable from the
retirement taxes, if applicable) on the taxable cost of
income of the employee also must be reported in boxes 1,
group-term life insurance over $50,000 on Form 1040.
3, and 5. (Use box 14 if railroad retirement taxes apply.)
You are not required to collect those taxes. However, you
An employee's contributions to an HSA (unless made
must report the uncollected social security tax (or railroad
through a cafeteria plan) are includible in income as
retirement taxes, if applicable) with code M and the
wages and are subject to federal income tax withholding
uncollected Medicare tax (or RRTA Medicare tax, if
and social security and Medicare taxes (or railroad
applicable) with code N in box 12 of Form W-2. However,
retirement taxes, if applicable). Employee contributions
any uncollected Additional Medicare Tax (on the cost of
are deductible, within limits, on the employee's Form
group-term life insurance, which, in combination with other
1040. For more information about HSAs, see Notice
wages, is in excess of $200,000) is not reported with code
2004-2, Notice 2004-50, and Notice 2008-52. Notice
N in box 12.
2004-2, 2004-2 I.R.B. 269, is available at
IRS.gov/irb/
2004-02_IRB/ar09.html. Notice 2004-50, 2004-33 I.R.B.
Health flexible spending arrangement (FSA). For plan
196, is available at IRS.gov/irb/2004-33_IRB/ar08.html.
year 2017, a cafeteria plan may not allow an employee to
Notice 2008-52, 2008-25 I.R.B. 1166, is available at
request salary reduction contributions for a health FSA in
IRS.gov/irb/2008-25_IRB/ar10.html. Also see Form 8889,
excess of $2,600 (as indexed for inflation).
Health Savings Accounts (HSAs), and Pub. 969.
If a cafeteria plan timely complies with the written plan
requirement limiting health FSA salary reduction
Lost Form W-2—reissued statement. If an employee
contributions, but one or more employees are erroneously
loses a Form W-2, write “REISSUED STATEMENT” on
allowed to elect a salary reduction of more than $2,600 for
the new copy and furnish it to the employee. You do not
a plan year, the cafeteria plan will continue to be a section
have to add “REISSUED STATEMENT” on Forms W-2
125 cafeteria plan for that plan year if:
provided to employees electronically. Do not send Copy A
The terms of the plan apply uniformly to all participants,
of the reissued Form W-2 to the SSA. Employers are not
The error results from a reasonable mistake by the
prohibited (by the Internal Revenue Code) from charging
employer (or the employer’s agent) and is not due to
a fee for the issuance of a duplicate Form W-2.
willful neglect by the employer (or the employer’s agent),
Military differential pay. Employers paying their
and
employees while they are on active duty in the United
Salary reduction contributions in excess of $2,600 are
States uniformed services should treat these payments as
paid to the employee and reported as wages for income
wages. Differential wage payments made to an individual
tax withholding and employment tax purposes on the
while on active duty for periods scheduled to exceed 30
employee’s Form W-2 (or Form W-2c) for the employee’s
days are subject to income tax withholding, but are not
taxable year in which, or with which, ends the cafeteria
subject to social security, Medicare, and unemployment
plan year in which the correction is made.
taxes. Report differential wage payments in box 1 and any
The salary reduction contribution limit of $2,600
federal income tax withholding in box 2. Differential wage
does not include any amount (up to $500) carried
payments made to an individual while on active duty for
!
over from a previous year.
30 days or less are subject to income tax withholding,
CAUTION
social security, Medicare, and unemployment taxes, and
For more information, see Notice 2012-40, 2012-26
are reported in boxes 1, 3, and 5. See Rev. Rul. 2009-11,
I.R.B. 1046, available at
IRS.gov/irb/2012-26_IRB/
2009-18 I.R.B. 896, available at
IRS.gov/irb/2009-18_IRB/
ar09.html
and Notice 2013-71, 2013-47 I.R.B. 532
ar07.html.
available at IRS.gov/irb/2013-47_IRB/ar10.html.
Moving expenses. Report moving expenses as follows.
Health savings account (HSA). An employer's
Qualified moving expenses that an employer paid to a
contribution (including an employee's contributions
third party on behalf of the employee (for example, to a
through a cafeteria plan) to an employee's HSA is not
moving company) and services that an employer
subject to federal income tax withholding or social
furnished in kind to an employee are not reported on Form
security, Medicare, or railroad retirement taxes (or FUTA
W-2.
tax) if it is reasonable to believe at the time of the payment
Qualified moving expense reimbursements paid directly
that the contribution will be excludable from the
to an employee by an employer are reported only in
employee's income. However, if it is not reasonable to
box 12 of Form W-2 with code P.
believe at the time of payment that the contribution will be
Nonqualified moving expense reimbursements are
excludable from the employee's income, employer
reported in boxes 1, 3, and 5 (use box 14 if railroad
contributions are subject to federal income tax
retirement taxes apply) of Form W-2. These amounts are
withholding, social security and Medicare taxes (or
subject to federal income tax withholding and social
railroad retirement taxes, if applicable), and FUTA tax,
security and Medicare taxes (or railroad retirement taxes,
and must be reported in boxes 1, 3, and 5 (use box 14 if
if applicable).
railroad retirement taxes apply), and on Form 940,
For more information on qualified and nonqualified
Employer's Annual Federal Unemployment (FUTA) Tax
moving expenses, see Pub. 521, Moving Expenses.
Return.
-11-
General Instructions for Forms W-2 and W-3 (2017)

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