Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2017 Page 17

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employer. The total of boxes 3 and 7 cannot exceed
Example of how to report social security and
$127,200 (2017 maximum social security wage base).
Medicare wages. You paid your employee $140,000 in
wages. Enter in box 3 (social security wages) 127200.00
Report in box 3 elective deferrals to certain qualified
but enter in box 5 (Medicare wages and tips) 140000.00.
cash or deferred compensation arrangements and to
There is no limit on the amount reported in box 5. If the
retirement plans described in box 12 (codes D, E, F, G,
amount of wages paid was $127,200 or less, the amounts
and S) even though the deferrals are not includible in
entered in boxes 3 and 5 will be the same.
box 1. Also report in box 3 designated Roth contributions
made under a section 401(k) plan, under a section 403(b)
Box 6—Medicare tax withheld. Enter the total
salary reduction agreement, or under a governmental
employee Medicare tax (including any Additional
section 457(b) plan described in box 12 (codes AA, BB,
Medicare Tax) withheld. Do not include your share.
and EE).
Include only tax withheld for 2017 wages and tips. If you
paid your employee's share of the taxes, see Employee's
Amounts deferred (plus earnings or less losses) under
social security and Medicare taxes (or railroad retirement
a section 457(f) or nonqualified plan or nongovernmental
taxes, if applicable) paid by employer.
section 457(b) plan must be included in boxes 3 and/or 5
as social security and/or Medicare wages as of the later of
For more information on Additional Medicare Tax, go to
when the services giving rise to the deferral are performed
IRS.gov and enter “Additional Medicare Tax” in the search
or when there is no substantial forfeiture risk of the rights
box.
to the deferred amount. Include both elective and
Box 7—Social security tips. Show the tips that the
nonelective deferrals for purposes of nongovernmental
employee reported to you even if you did not have enough
section 457(b) plans.
employee funds to collect the social security tax for the
Wages reported in box 3 also include:
tips. The total of boxes 3 and 7 should not be more than
Signing bonuses an employer pays for signing or
$127,200 (the maximum social security wage base for
ratifying an employment contract. See Rev. Rul.
2017). Report all tips in box 1 along with wages and other
2004-109, 2004-50 I.R.B. 958 available at
IRS.gov/irb/
compensation. Include any tips reported in box 7 in box 5
2004-50_IRB/ar07.html.
also.
Taxable cost of group-term life insurance over $50,000
Box 8—Allocated tips (not applicable to Forms
included in box 1. See Group-term life insurance.
W-2AS, W-2CM, W-2GU, or W-2VI). If you operate a
Cost of accident and health insurance premiums for
large food or beverage establishment, show the tips
2%-or-more shareholder-employees paid by an S
allocated to the employee. See the Instructions for Form
corporation, but only if not excludable under section
8027, Employer's Annual Information Return of Tip
3121(a)(2)(B).
Income and Allocated Tips. Do not include this amount in
Employee and nonexcludable employer contributions to
boxes 1, 3, 5, or 7.
an MSA or HSA. However, do not include employee
contributions to an HSA that were made through a
Box 9—Verification code (not applicable to Forms
cafeteria plan. See Archer MSA and Health savings
W-2AS, W-2CM, W-2GU, or W-2VI). If you are
account (HSA).
participating in the W-2 Verification Code Initiative, enter
Employee contributions to a SIMPLE retirement
the appropriate verification code in box 9. Otherwise,
account. See SIMPLE retirement account.
leave box 9 blank. For more information, see
IRS.gov/
Adoption benefits. See Adoption benefits.
individuals/w-2-verification-code.
Box 4—Social security tax withheld. Show the total
Box 10—Dependent care benefits (not applicable to
Forms W-2AS, W-2CM, W-2GU, or W-2VI). Show the
employee social security tax (not your share) withheld,
total dependent care benefits under a dependent care
including social security tax on tips. For 2017, the amount
assistance program (section 129) paid or incurred by you
should not exceed $7,886.40 ($127,200 × 6.2%). Include
only taxes withheld (or paid by you for the employee) for
for your employee. Include the fair market value (FMV) of
2017 wages and tips. If you paid your employee's share,
care in a daycare facility provided or sponsored by you for
see Employee's social security and Medicare taxes (or
your employee and amounts paid or incurred for
railroad retirement taxes, if applicable) paid by employer.
dependent care assistance in a section 125 (cafeteria)
plan. Report all amounts paid or incurred (regardless of
Box 5—Medicare wages and tips. The wages and tips
any employee forfeitures), including those in excess of the
subject to Medicare tax are the same as those subject to
$5,000 exclusion. This may include (a) the FMV of
social security tax (boxes 3 and 7) except that there is no
benefits provided in kind by the employer, (b) an amount
wage base limit for Medicare tax. Enter the total Medicare
paid directly to a daycare facility by the employer or
wages and tips in box 5. Be sure to enter tips that the
reimbursed to the employee to subsidize the benefit, or (c)
employee reported even if you did not have enough
benefits from the pre-tax contributions made by the
employee funds to collect the Medicare tax for those tips.
employee under a section 125 dependent care flexible
See Box 3—Social security wages, for payments to report
spending account. Include any amounts over $5,000 in
in this box. If you paid your employee's share of taxes, see
boxes 1, 3, and 5. For more information, see Pub. 15-B.
Employee's social security and Medicare taxes (or
railroad retirement taxes, if applicable) paid by employer.
An employer that amends its cafeteria plan to
provide a grace period for dependent care
If you are a federal, state, or local governmental agency
TIP
assistance may continue to rely on Notice 89-111
with employees paying only Medicare tax, enter the
by reporting in box 10 the salary reduction amount elected
Medicare wages in this box. See Government employers.
-17-
General Instructions for Forms W-2 and W-3 (2017)

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