Publication 957 - Reporting Back Pay And Special Wage Payments To The Social Security Administration Page 9
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13Example — risk of forfeiture. At the end of the
risk-of-forfeiture period for Company Y’s nonqualified de-
Reporting Payments and Deferrals in the
ferred compensation plan, employee B’s accumulated de-
Same Year
ferrals, plus interest earned by the plan, are $120,000, not
including B’s $20,000 deferral for this year. B’s wages,
Do not complete box 11 when payments (distributions) are
including this year’s deferred amount, are $80,000.
made from a nonqualified plan and deferrals are reported
in boxes 3 and/or 5 of Form W-2 (including current year
Form W-2 Completion
deferrals). Report to the SSA on Form SSA-131 the total
Box
Amount
amount the employee earned during the tax year. Nor-
1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,000
mally, the amount earned is the amount reported in box 1
3* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,800
of Form W-2 less payments from a nonqualified (section
5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000
457) plan, but including any amounts deferred under the
11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000
plan during the tax year. See Form SSA-131 and its in-
*Wage base maximum for tax year 2009
structions on pages 6 and 7.
Example. Employee K retired this year from Company
Reporting Payments From Nonqualified and
XYZ and began receiving social security benefits. During
Nongovernmental Section 457 Plans
the year he earned wages of $50,000 and deferred
$35,000 of the wages into the company’s nonqualified
When an employee or former employee retires and begins
deferred compensation plan. K also received $75,000 in
receiving payments (distributions) from a nonqualified or
payments from the company’s nonqualified plan.
nongovernmental section 457 plan, report the payments in
boxes 1 and 11 of Form W-2. Report payments (distribu-
Form W-2 Completion
tions) from a governmental section 457 plan on Form
Special Wage Payment . . . . . . . . . . . . . . . . . . . $75,000
1099-R, Distributions from Pensions, Annuities, Retire-
Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
ment or Profit-Sharing Plans, IRAs, Insurance Contracts,
Minus: deferral . . . . . . . . . . . . . . . . . . . . . . . . .
35,000
etc.
Total reported in Box 1 . . . . . . . . . . . . . . . . . . $90,000
Example. Employee D retired from the XYZ company
Wages including deferral reported in
and began receiving social security benefits. XYZ paid D a
Boxes 3 and 5 . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
$12,000 bonus upon retirement for sales made in a prior
year, and D received $25,000 in payments from XYZ’s
Leave Box 11 blank. File Form SSA-131 . . . . .
-0-
nonqualified deferred compensation plan. In addition, D
agreed to continue performing services for XYZ, but on a
Form SSA-131 Completion
part-time basis for wages of $15,000 per year. D made no
Amount from Box 1 of Form W-2 . . . . . . . . . . . $90,000
deferrals to the nonqualified plan this year.
Minus: payments from a nonqualified plan . . . .
75,000
Plus: amounts deferred into the plan during the
Form W-2 Completion
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35,000
Box
Amount
Total wages earned for purposes of Form
1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $52,000
SSA-131 (item 6) . . . . . . . . . . . . . . . . . . . . . . . $50,000
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,000
5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,000
11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,000
Report the $12,000 bonus to the SSA using electronic
reporting, magnetic media, a paper listing, or Form
SSA-131. For more information, see
Reporting Special
Wage Payments
on page 5.
Publication 957 (May 2010)
Page 9
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