The Social Security Administration (SSA) is offering two free booklets targeted to employers as part of an initiative to increase the accuracy of form W-2
One of the key requirements of the new rules includes annual reporting on Form W-2
or Form 1099-MISC of all amounts deferred, whether or not includible in income for the year.
Taxpayers argued that all of the special valuation rules should be available for use, even if an employer neglected to include the proper safe-harbor value on an employee's original (or amended) Form W-2
or 1099 and the mistake was discovered on audit.
Revenue ruling 91-26 (1991-1 CB 184) says the cost of accident and health insurance premium payments made by an S corporation for a 2% shareholder must be reported as wages on form W-2
The amount of combat pay to be excluded as taxable wages on Form W-2
should already be reduced for any qualifying combat zone pay and would typically not need to be determined by return preparers; see IRS Pub.
In early 1991 the Internal Revenue Service ruled health insurance premiums paid by an S corporation for a shareholder-employee must be reported as wages on form W-2
(revenue ruling 91-26).
The Internal Revenue Service, Social Security Administration, and the Federation of Tax Administrators are in the process of assessing the feasibility of a consolidated National wage Reporting System (NWRS) concerning information now provided to the federal government and the states under the Form W-2
Wage and Tax Statement filing program.
T earns $50,000 in wages and deposits the income in a separate account, but receives a Form W-2
that reports wages of $45,000.
Certain scholarships for which no form W-2
is received may no be earned income.
Problem: The size of the boxes into which numbers are inserted on the proposed 1990 Form W-2
(Wage and Tax Statement) remains a concern.
In addition, these payments need not be reported on the employee's form W-2
, and no withholding is required.
For example, we have offered comments on how large the boxes should be on Form W-2
(3) and on the federal tax deposit coupon, and we have recommended that the IRS print its form on standard sized, 8-1/2 by 11 inch paper.