Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2016 Page 8
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32contributions to an Archer MSA that are not excludable
(less the social security and Medicare taxes withheld) was
from the income of the employee also must be reported in
paid to A's estate on July 6, 2016. Because X made the
boxes 1, 3, and 5 (box 14 if railroad retirement taxes
payment during the year of death, X must withhold social
apply).
security and Medicare taxes on the $3,000 payment and
must complete Form W-2 as follows.
An employee's contributions to an Archer MSA are
Box a – Employee A's SSN
includible in income as wages and are subject to federal
Box e – Employee A's name
income tax withholding and social security and Medicare
Box f – Employee A's address
taxes (or railroad retirement taxes, if applicable).
Box 1 – 10000.00 (does not include the $3,000
Employee contributions are deductible, within limits, on
accrued wages and vacation pay)
the employee's Form 1040.
Box 2 – 1500.00
For more information, see Pub. 969, Health Savings
Box 3 – 13000.00 (includes the $3,000 accrued wages
Accounts and Other Tax-Favored Health Plans, and
and vacation pay)
Notice 96-53, which is found on page 5 of Internal
Box 4 – 806.00 (6.2% of the amount in box 3)
Revenue Bulletin 1996-51 at
Box 5 – 13000.00 (includes the $3,000 accrued wages
irb96-51.pdf.
and vacation pay)
Clergy and religious workers. For certain members of
Box 6 – 188.50 (1.45% of the amount in box 5)
the clergy and religious workers who are not subject to
social security and Medicare taxes as employees, boxes
Employer X also must complete Form 1099-MISC
3 and 5 of Form W-2 should be left blank. You may
as follows.
!
include a minister's parsonage and/or utilities allowance in
CAUTION
box 14. For information on the rules that apply to ministers
and certain other religious workers, see Pub. 517, Social
Boxes for recipient’s name, address, and TIN—the
Security and Other Information for Members of the Clergy
estate's name, address, and TIN.
and Religious Workers, and section 4 in Pub. 15-A.
Box 3: 3000.00 (Even though amounts were withheld
for social security and Medicare taxes, the gross amount
Deceased employee's wages. If an employee dies
is reported here.)
during the year, you must report the accrued wages,
vacation pay, and other compensation paid after the date
If Employer X made the payment after the year of
of death. Also report wages that were available to the
death, the $3,000 would not be subject to social security
employee while he or she was alive, regardless of
and Medicare taxes and would not be shown on Form
whether they actually were in the possession of the
W-2. However, the employer would still file Form
employee, as well as any other regular wage payment,
1099-MISC.
even if you may have to reissue the payment in the name
Designated Roth contributions. Under section 402A, a
of the estate or beneficiary.
participant in a section 401(k) plan, under a 403(b) salary
If you made the payment after the employee's death
reduction agreement, or in a governmental 457(b) plan
but in the same year the employee died, you must
that includes a qualified Roth contribution program, may
withhold social security and Medicare taxes on the
elect to make designated Roth contributions to the plan or
payment and report the payment on the employee's Form
program in lieu of elective deferrals. Designated Roth
W-2 only as social security and Medicare wages to ensure
contributions are subject to federal income tax withholding
proper social security and Medicare credit is received. On
and social security and Medicare taxes (and railroad
the employee's Form W-2, show the payment as social
retirement taxes, if applicable) and must be reported in
security wages (box 3) and Medicare wages and tips
boxes 1, 3, and 5. (Use box 14 if railroad retirement taxes
(box 5) and the social security and Medicare taxes
apply.)
withheld in boxes 4 and 6. Do not show the payment in
Section 402A requires separate reporting of the yearly
box 1.
designated Roth contributions. Designated Roth
If you made the payment after the year of death, do not
contributions to 401(k) plans will be reported using code
report it on Form W-2, and do not withhold social security
AA in box 12; designated Roth contributions under 403(b)
and Medicare taxes.
salary reduction agreements will be reported using code
Whether the payment is made in the year of death or
BB in box 12; and designated Roth contributions under a
after the year of death, you also must report it in box 3 of
governmental section 457(b) plan will be reported using
Form 1099-MISC, Miscellaneous Income, for the payment
code EE in box 12. For reporting instructions, see Box
to the estate or beneficiary. Use the name and taxpayer
12—Codes for Code AA, Code BB, and Code EE.
identification number (TIN) of the payment recipient on
Educational assistance programs. Employer-provided
Form 1099-MISC. However, if the payment is a
educational assistance that qualifies as a working
reissuance of wages that were constructively received by
condition benefit is excludable from an employee's
the deceased individual while he or she was still alive, do
wages. For employer-provided educational assistance
not report it on Form 1099-MISC.
that does not qualify as a working condition benefit, a
Example. Before Employee A's death on June 15,
$5,250 exclusion may apply if the assistance is provided
2016, A was employed by Employer X and received
under an educational assistance program under section
$10,000 in wages on which federal income tax of $1,500
127. See Pub. 970, Tax Benefits for Education, and
was withheld. When A died, X owed A $2,000 in wages
and $1,000 in accrued vacation pay. The total of $3,000
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General Instructions for Forms W-2 and W-3 (2016)
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