Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2016 Page 9
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32section 2 of Pub. 15-B for more information. Also see Box
This does not apply to household and agricultural
1—Wages, tips, other compensation.
employers. If you pay a household or agricultural
!
employee's social security and Medicare taxes,
Election workers. Report on Form W-2 payments of
CAUTION
you must include these payments in the employee's
$600 or more to election workers for services performed
wages for income tax withholding purposes. However, the
in state, county, and municipal elections. File Form W-2
wage increase due to the tax payments is not subject to
for payments of less than $600 paid to election workers if
social security, Medicare, or FUTA taxes. For information
social security and Medicare taxes were withheld under a
on completing Forms W-2 and W-3 in this situation, see
section 218 (Social Security Act) agreement. Do not
the Instructions for Schedule H (Form 1040) and section 4
report election worker payments on Form 1099-MISC.
of Pub. 51 (Circular A).
If the election worker is employed in another capacity
with the same government entity, see Rev. Rul. 2000-6,
Foreign agricultural workers. You must report
which is on page 512 of Internal Revenue Bulletin 2000-6
compensation of $600 or more paid in a calendar year to
at
an H-2A visa agricultural worker for agricultural labor. If
the H-2A visa agricultural worker furnishes a valid
Employee business expense reimbursements.
taxpayer identification number, report these payments in
Reimbursements to employees for business expenses
box 1 of Form W-2. If the worker does not furnish a valid
must be reported as follows.
taxpayer identification number, report the payments on
Generally, payments made under an accountable plan
Form 1099-MISC. See Form 1099-MISC below.
are excluded from the employee's gross income and are
On Form W-2, no amount should be reported in boxes
not reported on Form W-2. However, if you pay a per diem
3 or 5. In most cases, you do not need to withhold federal
or mileage allowance and the amount paid for
income tax from compensation paid to H-2A visa
substantiated miles or days traveled exceeds the amount
agricultural workers. Employers should withhold federal
treated as substantiated under IRS rules, you must report
income tax only if the H-2A visa agricultural worker and
as wages on Form W-2 the amount in excess of the
the employer agree to withhold. The H-2A visa agricultural
amount treated as substantiated. The excess amount is
worker must provide a completed Form W-4. If the
subject to income tax withholding and social security and
employer withholds income tax, the employer must report
Medicare taxes (or railroad retirement taxes, if
the tax withheld in box 2 of Form W-2 and on line 8 of
applicable). Report the amount treated as substantiated
Form 943. See Pub. 51 (Circular A).
(that is, the nontaxable portion) in box 12 using code L.
Form 1099-MISC. If the H-2A visa agricultural worker
See Box 12—Codes for Code L— Substantiated
fails to furnish a taxpayer identification number to the
employee business expense reimbursements. (Use
employer, and the total annual payments made to the
box 14 if railroad retirement taxes apply.)
H-2A visa agricultural worker are $600 or more, the
Payments made under a nonaccountable plan are
employer must begin backup withholding on the payments
reported as wages on Form W-2 and are subject to
made until the H-2A visa agricultural worker furnishes a
federal income tax withholding and social security and
valid taxpayer identification number. Employers must
Medicare taxes (or railroad retirement taxes, if
report the compensation paid and any backup withholding
applicable). (Use box 14 if railroad retirement taxes
on Forms 1099-MISC and Form 945, Annual Return of
apply.)
Withheld Federal Income Tax. See the 2016 Instructions
For more information on accountable plans,
for Form 1099-MISC and the 2016 Instructions for Form
nonaccountable plans, amounts treated as substantiated
945.
under a per diem or mileage allowance, the standard
For more information, enter “foreign agricultural
mileage rate, the per diem substantiation method, and the
workers” in the search box on IRS.gov.
high-low substantiation method, see Pub. 463, Travel,
Entertainment, Gift, and Car Expenses; and section 5 of
Fringe benefits. Include all taxable fringe benefits in
Pub. 15 (Circular E).
box 1 of Form W-2 as wages, tips, and other
compensation and, if applicable, in boxes 3 and 5 as
Employee's social security and Medicare taxes (or
social security and Medicare wages. Although not
railroad retirement taxes, if applicable) paid by em-
required, you may include the total value of fringe benefits
ployer. If you paid your employee's share of social
in box 14 (or on a separate statement). However, if you
security and Medicare taxes rather than deducting them
provided your employee a vehicle and included 100% of
from the employee's wages, you must include these
its annual lease value in the employee's income, you must
payments as wages subject to federal (or American
separately report this value to the employee in box 14 (or
Samoa, CNMI, Guam, or U.S. Virgin Islands) income tax
on a separate statement). The employee can then figure
withholding and social security, Medicare, and federal
the value of any business use of the vehicle and report it
unemployment (FUTA) taxes. If you paid your employee's
on Form 2106, Employee Business Expenses. Also see
share of railroad retirement taxes, you must include these
Pub. 15-B for more information.
amounts as compensation subject to railroad retirement
taxes. The amount to include as wages and/or
If you used the commuting rule or the vehicle
compensation is determined by using the formula
cents-per-mile rule to value the personal use of
!
contained in the discussion of Employee's Portion of
the vehicle, you cannot include 100% of the value
Taxes Paid by Employer in section 7 of Pub. 15-A and in
CAUTION
of the use of the vehicle in the employee's income. See
Rev. Proc. 83-43, 1983-24 I.R.B. 60.
Pub. 15-B.
-9-
General Instructions for Forms W-2 and W-3 (2016)
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