Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2016 Page 16
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32federal income tax withholding must be shown in box 1 as
or when there is no substantial forfeiture risk of the rights
other compensation. See Statutory employee.
to the deferred amount. Include both elective and
nonelective deferrals for purposes of nongovernmental
17. Cost of current insurance protection under a
section 457(b) plans.
compensatory split-dollar life insurance arrangement.
Wages reported in box 3 also include:
18. Employee contributions to a health savings account
Signing bonuses an employer pays for signing or
(HSA).
ratifying an employment contract. See Rev. Rul.
19. Employer contributions to an HSA if includible in the
2004-109, 2004-50 I.R.B. 958 available at
income of the employee. See Health savings account
irb/2004-50_IRB/ar07.html.
(HSA).
Taxable cost of group-term life insurance over $50,000
20. Amounts includible in income under an NQDC plan
included in box 1. See Group-term life insurance.
because of section 409A. See Nonqualified deferred
Cost of accident and health insurance premiums for
compensation plans under Special Reporting Situations
2%-or-more shareholder-employees paid by an S
for Form W-2.
corporation, but only if not excludable under section
21. Payments made to former employees while they are
3121(a)(2)(B).
on active duty in the Armed Forces or other uniformed
Employee and nonexcludable employer contributions to
services.
an MSA or HSA. However, do not include employee
contributions to an HSA that were made through a
22. All other compensation, including certain
cafeteria plan. See Archer MSA and Health savings
scholarship and fellowship grants. See Scholarship and
account (HSA).
fellowship grants. Other compensation includes taxable
Employee contributions to a SIMPLE retirement
amounts that you paid to your employee from which
account. See SIMPLE retirement account.
federal income tax was not withheld. You may show other
compensation on a separate Form W-2. See Multiple
Adoption benefits. See Adoption benefits.
forms.
Box 4—Social security tax withheld. Show the total
employee social security tax (not your share) withheld,
Box 2—Federal income tax withheld. Show the total
including social security tax on tips. For 2016, the amount
federal income tax withheld from the employee's wages
should not exceed $7,347 ($118,500 × 6.2%). Include
for the year. Include the 20% excise tax withheld on
only taxes withheld (or paid by you for the employee) for
excess parachute payments. See Golden parachute
2016 wages and tips. If you paid your employee's share,
payments.
see Employee's social security and Medicare taxes (or
For Forms W-2AS, W-2CM, W-2GU, or W-2VI, show
railroad retirement taxes, if applicable) paid by employer.
the total American Samoa, CNMI, Guam, or U.S. Virgin
Islands income tax withheld.
Box 5—Medicare wages and tips. The wages and tips
subject to Medicare tax are the same as those subject to
Box 3—Social security wages. Show the total wages
social security tax (boxes 3 and 7) except that there is no
paid (before payroll deductions) subject to employee
wage base limit for Medicare tax. Enter the total Medicare
social security tax but not including social security tips and
wages and tips in box 5. Be sure to enter tips that the
allocated tips. If reporting these amounts in a subsequent
employee reported even if you did not have enough
year (due to lapse of risk of forfeiture), the amount must
employee funds to collect the Medicare tax for those tips.
be adjusted by any gain or loss. See Box 7—Social
See Box 3—Social security wages, for payments to report
security tips and Box 8—Allocated tips. Generally,
in this box. If you paid your employee's share of taxes, see
noncash payments are considered to be wages. Include
Employee's social security and Medicare taxes (or
employee business expense reimbursements reported in
railroad retirement taxes, if applicable) paid by employer.
box 1. If you paid the employee's share of social security
If you are a federal, state, or local governmental agency
and Medicare taxes rather than deducting them from
with employees paying only Medicare tax, enter the
wages, see Employee's social security and Medicare
Medicare wages in this box. See Government employers.
taxes (or railroad retirement taxes, if applicable) paid by
Example of how to report social security and
employer. The total of boxes 3 and 7 cannot exceed
Medicare wages. You paid your employee $140,000 in
$118,500 (2016 maximum social security wage base).
wages. Enter in box 3 (social security wages) 118500.00
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 $118,500 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 2016 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
when the services giving rise to the deferral are performed
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General Instructions for Forms W-2 and W-3 (2016)
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