Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

E Filing Income Tax

Free Tax Filing Hr BlockH&r Block At Home MilitaryTurbo Tax1040ez FormFile Taxes Online FreeCan A Full Time Student File TaxesSample 1040ezFree Amended Tax ReturnFree 1040xIrs Free File 2012How To File An Amended Tax Return2012.taxhow1040x EfileFree 1040x FormAmend Federal Tax ReturnH R Block 1040x2012 1040 Tax Return FormFree File State And Federal TaxesHrblockFederal Tax 1040ezOnline Tax PreparationForms 1040xTax AmendmentsFree Tax Filing 2013 Low IncomeIrs Tax ReturnIrs Free State FilingCan You Efile A 1040xDeadline For Filing TaxesE File Tax ReturnsIrs 1040 Ez Form 20121040ez Irs GovFree Online Tax FilingFree State Tax Prep OnlineFree State Income Tax PreparationStatetaxreturn1040x FormsFederal Tax FormsHow To File Your State Taxes For Free1040x Amended Tax Return FormFile My 2011 Taxes Free

E Filing Income Tax

E filing income tax 9. E filing income tax   Obligations Not in Registered Form Tax is imposed on any person who issues a registration-required obligation not in registered form. E filing income tax The tax is: 1% of the principal of the obligation, multiplied by The number of calendar years (or portions of calendar years) during the period starting on the date the obligation was issued and ending on the date it matures. E filing income tax A registration-required obligation is any obligation other than one that meets any of the following conditions. E filing income tax It is issued by a natural person. E filing income tax It is not of a type offered to the public. E filing income tax It has a maturity (at issue) of not more than 1 year. E filing income tax It can only be issued to a foreign person. E filing income tax For item (4), if the obligation is not in registered form, the interest on the obligation must be payable only outside the United States and its possessions. E filing income tax Also, the obligation must state on its face that any U. E filing income tax S. E filing income tax person who holds it shall be subject to limits under the U. E filing income tax S. E filing income tax income tax laws. E filing income tax Prev  Up  Next   Home   More Online Publications
Español

Study in the U.S.

Find resources on student visas, financial assistance, working in the U.S., and more.

Start Here

  • Study in the States  – Find the steps you need to take in order to study in the U.S., such as getting accepted to school, paying your I-901 SEVIS fee, and applying for a visa.

Back to Top

The E Filing Income Tax

E filing income tax Publication 957 - Main Content Table of Contents 1. E filing income tax What is Back Pay?Reporting Back Pay Back Pay Under a Statute Nonstatutory Back Pay Format for Report to the SSA Questions 2. E filing income tax Special Wage PaymentsReporting Special Wage Payments Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments Nonqualified Deferred Compensation and Section 457 Plans Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) PlansSpecial rule for box 11 of Form W-2 (distributions and deferral in the same year). E filing income tax 1. E filing income tax What is Back Pay? Back pay is pay received in a tax year(s) for actual or deemed employment in an earlier tax year(s). E filing income tax For social security coverage and benefit purposes, all back pay, whether or not under a statute, is wages if it is payment for covered employment. E filing income tax Damages for personal injury, interest, penalties, and legal fees included with back pay awards are not wages. E filing income tax Report all back pay. E filing income tax However, the tax year(s) for which back pay is credited as wages for social security purposes is different if it is awarded under a statute. E filing income tax See Back Pay Under a Statute , later, for more information. E filing income tax Reporting Back Pay The Internal Revenue Service (IRS) and the SSA consider back pay awards to be wages. E filing income tax However, for income tax purposes, the IRS treats all back pay as wages in the year paid. E filing income tax Employers should use Form W-2, Wage and Tax Statement, or electronic wage reports to report back pay as wages in the year they actually pay the employee. E filing income tax The SSA no longer accepts reports on tapes, cartridges, and diskettes. E filing income tax Example. E filing income tax In 2012, Terry Morris earned wages of $50,000. E filing income tax In the same year, she received $100,000 in settlement of a back pay case against her employer that covered the periods January 2007 through December 2011. E filing income tax Her employer properly reflected social security wages of $110,100 and Medicare wages of $150,000 on her 2012 Form W-2. E filing income tax However, if an employer did not include back pay wages on a previously filed Form W-2, magnetic media, or electronically filed wage report, the employer should prepare a wage correction report, Form W-2c, Corrected Wage and Tax Statement, or electronically filed report, to add the back pay award to the wages previously reported. E filing income tax Example. E filing income tax If, in the above example, Terry Morris' employer had prepared her 2012 Form W-2 reporting social security and Medicare wages of only $50,000 each, the employer would have to correct that report. E filing income tax A Form W-2c correcting the 2012 Form W-2 would show previously reported social security and Medicare wages of $50,000 and the correct amount of $110,100 for social security wages and $150,000 for Medicare wages. E filing income tax SSA treatment of back pay under a statute. E filing income tax   Under the law, the SSA credits back pay awarded under a statute to an individual's earnings record in the period(s) the wages should have been paid. E filing income tax This is important because wages not credited to the proper year may result in lower social security benefits or failure to meet the requirements for benefits. E filing income tax   However, back pay under statute payments will remain posted to the employee's social security earnings record in the year reported on Form W-2 (or Form W-2c) unless the employer or employee notifies the SSA (in a separate, special report) of the back pay under a statute payment. E filing income tax Then, the SSA can allocate the statutory back pay to the appropriate periods. E filing income tax   If a back pay award is not made under a statute, the SSA credits back pay as wages in the year paid. E filing income tax    If employers do notify the SSA of this payment, they should prepare a special report (with the information noted below) and send it to: Social Security Administration Attn: CPS Back Pay Staff 7-B-15 SWT 1500 Woodlawn Drive Baltimore, MD 21241-0001 Be sure to send this special report to the above address because the SSA handles it separately from other reports. E filing income tax    If you paid the back pay award in the same tax year to which it applies, report the wages on that year's Form W-2. E filing income tax No further action is necessary. E filing income tax Example. E filing income tax In 2012, Judy Wilson received a salary of $30,000 and a back pay under statute award of $2,000 for the period January through June 2012. E filing income tax Her employer properly reported wages of $32,000 for social security and Medicare on her 2012 Form W-2. E filing income tax No further action is necessary. E filing income tax Information the SSA needs to properly credit back pay under a statute (special report). E filing income tax   After you complete the special report, you or the employee should send it to the SSA when or after you submit the Form W-2 (on paper or electronically) to the SSA for the year you pay the statutory back pay to the employee. E filing income tax There is no statute of limitations on the filing of the special report to enable the SSA to allocate the wages. E filing income tax The special report must include the following information. E filing income tax The employer's name, address, and employer identification number (EIN). E filing income tax A signed statement citing the federal or state statute under which the payment was made. E filing income tax If the statute is not identified, the SSA will assume the payment was not under a statute and will not allocate to earlier period(s). E filing income tax The name and telephone number of a person to contact. E filing income tax The SSA may have additional questions concerning the back pay case or the individual employee's information. E filing income tax A list of employees receiving the payment and the following information for each employee: The tax year you paid and reported the back pay. E filing income tax The employee's social security number (SSN). E filing income tax The employee's name (as shown on his or her social security card). E filing income tax The amount of the back pay award excluding any amounts specifically designated otherwise, for example, damages for personal injury, interest, penalties, and legal fees. E filing income tax The period(s) the back pay award covers (beginning and ending dates—month and year). E filing income tax The other wages paid subject to social security and/or Medicare taxes and reported in the same year as the back pay award (if none, show zero)*. E filing income tax Do not include the back pay award shown in that wage report. E filing income tax If you originally submitted the report under an establishment number, show that number and the amount of money that is to remain under that establishment number. E filing income tax The amount to allocate to each reporting period*. E filing income tax This includes any amount you want allocated (if applicable) to the tax year of the award payment. E filing income tax If you do not give the SSA specific amounts to allocate, the SSA does the allocation by dividing the back pay award by the number of months or years covered by the award. E filing income tax *Note. E filing income tax   For periods before January 1, 1978 (before January 1, 1981, for state and local government employers covered by a Section 218 agreement), show the wage amounts for each calendar quarter ending March 31, June 30, September 30, and December 31. E filing income tax For all tax years, show and identify the social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) separately. E filing income tax MQGE is applicable to federal employees beginning in 1983, and for certain state and local government employees beginning in 1986. E filing income tax For tax years 1991 and later, list the social security and Medicare wages separately. E filing income tax If you originally reported the individual's wages under an establishment or payroll record unit number, show the amount of wages to remain in the award year for that number and furnish that number to the SSA along with the EIN. E filing income tax Back Pay Under a Statute Back pay awarded under a statute is a payment by an employer following an award, determination, or agreement approved or sanctioned by a court or government agency responsible for enforcing a federal or state statute that protects an employee's right to employment or wages. E filing income tax Examples of pertinent statutes include: Age Discrimination in Employment Act, Americans with Disabilities Act, Equal Pay Act, Fair Labor Standards Act, National Labor Relations Act, State minimum wage laws, and State statutes that protect rights to employment and wages. E filing income tax Payments based on laws that have a similar effect to those listed above also may qualify as payments made under a statute. E filing income tax Back pay awards, under some of the statutes listed above, may be compensation for personal injury and not pay for employment. E filing income tax Such awards are not wages for social security coverage purposes. E filing income tax If a court-approved or sanctioned settlement agreement states that the agreement is not an admission of discrimination, liability, or act of wrongdoing, the statement does not change the nature of a back pay award. E filing income tax The payments made in such a settlement may still be back pay and wages under the rules discussed here. E filing income tax Nonstatutory Back Pay A payment for back wages negotiated between an employer and employee without an award, determination, or agreement approved or sanctioned by a court or government agency, the payment is not made under a statute. E filing income tax Delayed wage payments and retroactive pay increases resulting from union negotiation or payments under local ordinances or regulations are back pay and are wages. E filing income tax However, they are not payments made under a statute. E filing income tax If you are uncertain whether the back pay award was under a qualified statute, you may need to contact your personnel department or legal counsel or the attorney who filed the suit. E filing income tax Format for Report to the SSA Use the format shown in Table 1, later, to send the SSA the information needed to properly credit back pay under a statute. E filing income tax In a cover letter, include: Name and address of the employer, Statute under which you paid the back pay, Name and telephone number of the employer contact, and Signature of the reporting official. E filing income tax Under certain circumstances, back pay may be a special wage payment and excluded from wages counted under the social security earnings test. E filing income tax If you pay back pay to an employee age 61 or older, report it to the SSA in accordance with this section. E filing income tax Read Special Wage Payments, later, for additional reporting instructions. E filing income tax Questions If you have questions concerning back pay under a statute, call the SSA at 1-800-772-6270. E filing income tax Exception. E filing income tax   If you are a state or local government employer who was covered by an agreement under Section 218 of the Social Security Act before January 1, 1987, and you paid a back pay award before January 1, 1987, which you did not report to the SSA, contact your state Social Security Administrator's office. E filing income tax Table 1. E filing income tax Format for Report (Under Covering Letter) to Request SSA to Allocate Back Pay Under Statute Wages Employer's EIN: xx-xxxxxxx Tax Year in Which Award Payment Was Paid: 2012 (1) SSN and Employee Name (2)1 Award Amount and Period(s) (3)2,3 Other Soc. E filing income tax Sec. E filing income tax /Med. E filing income tax Wages Paid In Award Year (4)3 Allocation     Soc. E filing income tax Sec. E filing income tax Med. E filing income tax /MQGE Year Soc. E filing income tax Sec. E filing income tax Med. E filing income tax /MQGE xxx-xx-xxxx HELEN T. E filing income tax SMITH $100,000 1/2009 - 12/2012 $40,000 $40,000 2009 2010 2011 2012 $20,000 25,000 27,000 28,000 $20,000 25,000 27,000 28,000 xxx-xx-xxxx SAM W. E filing income tax EVANS 30,000 7/89-12/91 -0- -0- 1989 1990 1991   6,000 12,000 12,000 xxx-xx-xxxx ROLAND S. E filing income tax ADAMS 15,000 7/80-12/81 -0- -0- 9/80 12/80 1981 3,500 3,500 8,000   1Exclude amounts specifically designated as damages, penalties, etc. E filing income tax  2Exclude the amount of back pay, if any, included in that amount. E filing income tax  3For periods before January 1, 1978 (and for state and local government (Section 218) employers before January 1, 1981), show the wage amounts by calendar quarters. E filing income tax The social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) must be shown separately FOR ALL YEARS. E filing income tax (Wages subject ONLY to MQGE would be shown in the Medicare/MQGE column; no wages would be shown in the Soc. E filing income tax Sec. E filing income tax column. E filing income tax ) For tax years 1991 and later, the social security and Medicare wages must be listed separately. E filing income tax Explanation of examples. E filing income tax Helen T. E filing income tax Smith–The back pay award, excluding interest, was $100,000 for the periods 1/2009-12/2012. E filing income tax In 2012, this employee was also paid $40,000 in other wages. E filing income tax (Her Form W-2 for 2012 reported $110,100 for social security and $140,000 for Medicare. E filing income tax The SSA allocation will result in adjusted posted wages of $68,000 for social security and $68,000 for Medicare for 2012. E filing income tax ) Sam W. E filing income tax Evans–The back pay award was $30,000 for the periods 7/89-12/91. E filing income tax This employee was hired in 1989 and was subject to MQGE only. E filing income tax He was no longer employed by this governmental employer in 2012. E filing income tax (His Form W-2 for 2012 reported $30,000 for social security and $30,000 for Medicare. E filing income tax After the SSA allocation, he will not have any net posted wages for 2012. E filing income tax ) Roland S. E filing income tax Adams–The back pay award was $15,000 for the periods 7/80-12/81. E filing income tax He was no longer employed by this state and local government (Section 218) employer in 2012. E filing income tax (His Form W-2 for 2012 reported $15,000 for social security and $15,000 for Medicare; after the SSA allocation, he will not have any net posted wages for 2012. E filing income tax ) If the state Social Security Administrator's office needs more information, they can contact the SSA at the following address:   Social Security Administration Office of Income Security Programs Office of Earnings and Program Integrity Policy 6401 Security Boulevard 2506 OPS Baltimore, MD 21235 2. E filing income tax Special Wage Payments A special wage payment (SWP) is an amount paid by an employer to an employee (or former employee) for services performed in a prior year. E filing income tax Employers should report to the SSA special wage payments made to employees and former employees who are recipients of social security retirement benefits. E filing income tax Special wage payments made to a retired employee receiving social security or to an employee who continues to work while receiving social security benefits may reduce the benefits the individual receives if not reported to the SSA. E filing income tax Special wage payments may include (but are not limited to): Accumulated sick and vacation pay, Back pay, Bonuses, Deferred compensation, Payments because of retirement, Sales commissions, Severance pay, and Stock options. E filing income tax Note. E filing income tax Payments made after retirement that are part of the normal payroll cycle should not be routinely reported as special wage payments. E filing income tax Earnings Test. E filing income tax   Benefits paid to a social security beneficiary under full retirement age may be reduced if the beneficiary continues to work. E filing income tax The SSA uses the information in boxes 1, 3, and 5 of Form W-2 to determine the beneficiary's current year earnings. E filing income tax Special wage payments, which are for services performed in a prior year, will increase the current year earnings on Form W-2, which also may result in a reduction in the beneficiary's benefits. E filing income tax If a benefit is reduced because of a special wage payment, the beneficiary must get documentation from the employer before the SSA can restore the deducted portion. E filing income tax Therefore, employer reports of special wage payments help prevent incorrect benefit reductions. E filing income tax Reporting Special Wage Payments Employers must report special wage payments for income tax purposes and social security and Medicare taxes in the year received. E filing income tax Report income, social security, and/or Medicare taxes for special wage payments on Form W-2. E filing income tax See Nonqualified Deferred Compensation and Section 457 Plans, later, for reporting nonqualified deferred compensation plan deferrals and payments on Form W-2. E filing income tax In addition, report to the SSA special wage payments made during the reporting year to retired employees and employees who continue to work while receiving social security benefits. E filing income tax Submit reports after the close of the tax year. E filing income tax To avoid delays in processing, submit reports in time to reach the SSA by April 1. E filing income tax Use one of the following reporting methods. E filing income tax Electronic reporting. E filing income tax   Special wage payment files can be sent electronically by logging onto Business Services Online (BSO) via the socialsecurity. E filing income tax gov website. E filing income tax BSO enables organizations and authorized individuals to conduct business with and submit confidential information to the Social Security Administration. E filing income tax You must register to use this website. E filing income tax The web address is www. E filing income tax socialsecurity. E filing income tax gov/bso/bsowelcome. E filing income tax htm. E filing income tax   Use the specifications and record layout shown in  Table 2, later. E filing income tax Only one file at a time may be submitted. E filing income tax If your file is large (>10MB), or you have a slow internet connection, the transmission will be faster if the file is zipped. E filing income tax A zipped file contains a file that has been compressed to reduce its file size. E filing income tax WinZip and PKZIP are examples of acceptable compression packages. E filing income tax   Electronic submissions not meeting the specifications in Table 2 will be rejected. E filing income tax Paper listing. E filing income tax   A paper listing can be used to report special wage payments to several employees. E filing income tax Use the format shown in Table 3, later. E filing income tax Submit paper listings to the local SSA office nearest your place of business. E filing income tax Visit www. E filing income tax socialsecurity. E filing income tax gov/locator to find a Social Security office near you. E filing income tax Form SSA-131. E filing income tax   Use Form SSA-131 to report special wage payments made to an employee. E filing income tax Also use this form to report nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in box 11 of Form W-2. E filing income tax    This image is too large to be displayed in the current screen. E filing income tax Please click the link to view the image. E filing income tax Publication 957 Reporting Back Pay to the Social Security Administration Instructions for Form SSA–131   EMPLOYER INSTRUCTIONS FOR COMPLETING SPECIAL WAGE PAYMENT FORM 1. E filing income tax Provide the EIN that was used or will be used to report the employee's wages on the Form W-2. E filing income tax 2. E filing income tax Enter the date the employee retired. E filing income tax Enter “Not Retired” if the employee has not retired. E filing income tax 3. E filing income tax Enter the date that the employee last performed services; was not expected to return to work; and was not subject to recall to render additional services. E filing income tax This date should be the same as or earlier than the date in item “2”. E filing income tax Enter “Not Retired” if the employee has not retired. E filing income tax 4. E filing income tax Enter the wages that were paid to the employee in the tax year that were for services that were performed in years prior to the tax year or that were paid on account of retirement. E filing income tax  Examples (not all inclusive) of payments to be included: Payments in lieu of vacation that were earned in a year prior to the tax year. E filing income tax Accumulated sick payments which were paid in a lump sum based on “retirement” as the sole condition of payment. E filing income tax Accumulated sick payments paid at or after the date in item 3, which were earned in a year prior to the tax year. E filing income tax Payments “on account of retirement”–dismissal, severance or termination pay paid because of retirement. E filing income tax Bonuses which are paid pursuant to a prior contract, agreement or promise causing the employee to expect such payments regularly; or announced to induce the employee to work more steadily, rapidly or efficiently or to remain with the employer. E filing income tax Stock Options. E filing income tax   Do not include in item “4” payments: For annual, sick, holiday, or vacation pay if used (absence from work) prior to the date of retirement (earlier of items “2” or “3”). E filing income tax That were reported or will be reported under “Nonqualified Plans” on the Form W-2. E filing income tax That were deducted from the employee's wages and paid to a deferred compensation plan (e. E filing income tax g. E filing income tax , 401k). E filing income tax Employees health and dental plan benefits (non-covered/non-taxable for Social Security Wages). E filing income tax Bonuses earned and paid in the tax year. E filing income tax 5. E filing income tax Check whether payments listed in item 4 will be made for years after the tax year. E filing income tax If yes, please show the amounts and years in which these will be paid, if known. E filing income tax 6. E filing income tax Nonqualified deferred compensation and section 457 plans only. E filing income tax If you were unable to report nonqualified deferred compensation or section 457 plan payments and deferrals (contributions) on Form W-2 because both payments and deferrals occurred during the year, show the amount of wages earned by the employee during the tax year. E filing income tax Generally, the wages earned will be the compensation reported in block 1 of Form W-2 less payments from a nonqualified deferred compensation (or 457) plan, but including any amounts deferred under the plan during the tax year (See IRS Publication 957). E filing income tax Paperwork/Privacy Act Notice: This report is authorized by regulation 20 CFR 404. E filing income tax 702. E filing income tax The information that you provide will be used in making a determination regarding the amount of Social Security benefits payable to the above named individual. E filing income tax While your response is voluntary, if you do not respond we may not be able to make a correct determination regarding the amount of Social Security benefits payable to the above named individual for the year in question. E filing income tax We may also use the information you give us when we match records by computer. E filing income tax Matching programs compare our records with those of other Federal, State, or local government agencies. E filing income tax Many agencies may use matching programs to find or prove that a person qualifies for benefits paid by the Federal Government. E filing income tax The law allows us to do this even if you do not agree to it. E filing income tax Explanations about these and other reasons why information you provide us may be used or given out are available in Social Security Offices. E filing income tax If you want to learn more about this, contact any Social Security Office. E filing income tax The Paperwork Reduction Act: This information collection meets the clearance requirements of 44 U. E filing income tax S. E filing income tax C. E filing income tax §3507, as amended by Section 2 of the Paperwork Reduction Act of 1995. E filing income tax You are not required to answer these questions unless we display a valid Office of Management and Budget control number. E filing income tax We estimate that it will take you about 20 minutes to read the instructions, gather the necessary facts, and answer the questions. E filing income tax Form SSA-131 (8-2001) EF (06-2002)   Submit Form SSA-131 to the SSA office nearest your place of business. E filing income tax Or, the employee can submit it to the SSA office handling the claim. E filing income tax You or the employee must submit this form before the SSA can exclude the special wage payments for purposes of the earnings test. E filing income tax If reporting on more than one employee, complete a separate Form SSA-131 for each employee or use the paper listing format (except for reporting nonqualified and section 457 plan deferrals and payments) in Table 3. E filing income tax Do not report payments from nonqualified deferred compensation or section 457 plans that were reported in box 11 of Form W-2. E filing income tax Use Form SSA-131 if deferrals to and payments from nonqualified or section 457 plans occurred during the tax year. E filing income tax Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments A nonstatutory (nonqualified) option to purchase stock which is exercised in a year after the year in which the option was earned is a special wage payment. E filing income tax It should not count for the social security earnings test. E filing income tax Nonstatutory (nonqualified) options exercised as special wage payments by retired employees or employees who continue to work while receiving social security benefits should be reported by employers using the above reporting methods. E filing income tax Nonqualified Deferred Compensation and Section 457 Plans A nonqualified deferred compensation plan is a plan or arrangement established and maintained by an employer for one or more of its employees that provides for the deferral of compensation, but does not meet the requirements for a tax-qualified deferred compensation plan. E filing income tax For social security and Medicare purposes, deferred compensation plans for employees of state and local governments (section 457 plans) are treated the same as nonqualified plans. E filing income tax Nonqualified and section 457 plans are reported differently than other special wage payments. E filing income tax See Reporting Amounts Deferred to Nonqualified and Section 457 Plans below for specific instructions. E filing income tax Reporting Amounts Deferred to Nonqualified and Section 457 Plans Generally, when the related services are performed, nonqualified deferred compensation is subject to social security and Medicare tax when deferred. E filing income tax However, if nonqualified and section 457 plans contain provisions that delay the employee's right to receive payments from the plan, a period of substantial risk of forfeiture exists. E filing income tax The plans' deferrals, or contributions, are not subject to social security and Medicare taxes until the period of substantial risk of forfeiture ends. E filing income tax No risk of forfeiture. E filing income tax   If there is no risk of forfeiture, report wage amounts deferred to a nonqualified deferred compensation or section 457 plan in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. E filing income tax Example. E filing income tax Company X's nonqualified deferred compensation plan allows the deferral of up to $20,000 of employee salaries each year. E filing income tax The plan has no risk of forfeiture. E filing income tax In 2012, Employee A defers $20,000 to the plan from a total salary of $200,000. E filing income tax Form W-2 Completion Amount Box 1 $200,000 Box 3* 110,100 Box 5 200,000 *Wage base maximum for tax year 2012 Risk of forfeiture lapses before retirement. E filing income tax   If the substantial risk of forfeiture lapses before the employee retires, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. E filing income tax The accumulated deferrals are reported along with any other social security and Medicare wages earned during the year. E filing income tax   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. E filing income tax If the employee continues working, future deferrals are social security and Medicare wages when they are earned. E filing income tax    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. E filing income tax Risk of forfeiture lapses at retirement. E filing income tax   When an employee's right to a payment is contingent upon working until retirement, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, as social security and/or Medicare wages in the year of retirement. E filing income tax Add the amount to other wages paid in that year, and enter in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. E filing income tax   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. E filing income tax    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. E filing income tax Example—risk of forfeiture. E filing income tax At the end of the risk-of-forfeiture period for Company Y's nonqualified deferred compensation plan, Employee B's accumulated deferrals, plus interest earned by the plan, are $120,000, not including B's $20,000 deferral for this year. E filing income tax B's wages, including this year's deferred amount, are $80,000. E filing income tax Form W-2 Completion Amount Box 1 $60,000 Box 3* 110,100 Box 5 200,000 Box 11 120,000 *Wage base maximum for tax year 2012 Reporting Payments From Nonqualified and Nongovernmental Section 457 Plans When an employee or former employee retires and begins receiving payments (distributions) from a nonqualified or nongovernmental section 457 plan, report the payments in boxes 1 and 11 of Form W-2. E filing income tax Report payments (distributions) from a governmental section 457 plan on Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. E filing income tax Example. E filing income tax Employee D retired from the XYZ company and began receiving social security benefits. E filing income tax XYZ paid D a $12,000 bonus upon retirement for sales made in a prior year, and D received $25,000 in payments from XYZ's nonqualified deferred compensation plan. E filing income tax In addition, D agreed to continue performing services for XYZ, but on a part-time basis for wages of $15,000 per year. E filing income tax D made no deferrals to the nonqualified plan this year. E filing income tax Form W-2 Completion Amount Box 1 $52,000 Box 3 27,000 Box 5 27,000 Box 11 25,000 Report the $12,000 bonus to the SSA using electronic reporting, a paper listing, or Form SSA-131. E filing income tax For more information, see Reporting Special Wage Payments , earlier. E filing income tax Reporting Payments and Deferrals in the Same Year Do not complete box 11 when payments (distributions) are made from a nonqualified plan and deferrals are reported in boxes 3 and/or 5 of Form W-2 (including current year deferrals). E filing income tax Report to the SSA on Form SSA-131 the total amount the employee earned during the tax year. E filing income tax Normally, the amount earned is the amount reported in box 1 of Form W-2 less payments from a nonqualified or section 457 plan, but including any amounts deferred under the plan during the tax year. E filing income tax See Form SSA-131 and its instructions, earlier. E filing income tax Example. E filing income tax Employee K retired this year from Company XYZ and began receiving social security benefits. E filing income tax During the year he earned wages of $50,000 and deferred $35,000 of the wages into the company's nonqualified deferred compensation plan. E filing income tax K also received $75,000 in payments from the company's nonqualified plan. E filing income tax Form W-2 Completion Amount Special Wage Payment $75,000 Wages 50,000 Minus: deferral 35,000 Total reported in Box 1 $90,000     Wages including deferral reported in  Boxes 3 and 5 $50,000     Leave Box 11 blank. E filing income tax File Form SSA-131 -0-     Form SSA-131 Completion Amount from Box 1 of Form W-2 $90,000 Minus: payments from a nonqualified plan 75,000 Plus: amounts deferred into the plan during the year 35,000 Total wages earned for purposes of Form SSA-131 (item 6) $50,000 Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) Plans It is not necessary to show amounts deferred during the year under an NQDC plan subject to section 409A. E filing income tax If you report section 409A deferrals, show the amount in box 12 of Form W-2 using code Y. E filing income tax For more information, see Notice 2008-115, 2008-52 I. E filing income tax R. E filing income tax B. E filing income tax 1367, available at www. E filing income tax irs. E filing income tax gov/irb/2008-52_IRB/ar10. E filing income tax html. E filing income tax Special reporting rules apply when an NQDC plan is not compliant with section 409A (when there has been a “plan failure”). E filing income tax Income included under section 409A from an NQDC plan is reported in box 1 and box 12 of Form W-2 using code Z. E filing income tax See Notice 2008-115. E filing income tax The following examples use small dollar amounts for illustrative purposes. E filing income tax However, the amount reported in box 3 of Form W-2 is always limited by the social security earnings wage base (for example, $110,100 for 2012). E filing income tax The term “vested” in the following examples means that the amount deferred is not subject to a substantial risk of forfeiture. E filing income tax Conversely, the term “not vested” means that the amount deferred is subject to a substantial risk of forfeiture. E filing income tax The examples assume that the NQDC plan is in compliance with section 409A, and that amounts deferred under the plan are not includible in gross income as they are deferred. E filing income tax For purposes of the examples, it is assumed that the regular pay of the employee is remuneration for employment and wages for employment tax purposes except to the extent the deferral of a portion of the regular pay results in a reduction in wages. E filing income tax Example 1: Deferral that is immediately vested (no substantial risk of forfeiture) with no distributions and no vesting of prior-year deferrals. E filing income tax For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into her employer’s NQDC plan. E filing income tax The deferral of $20 was vested upon deferral and there was an employer match of $10 under the plan, which was also vested. E filing income tax Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10. E filing income tax Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 vested deferral) $180 Box 3 ($200 Regular pay plus $10 Employer match, vested) 210 Box 5 ($200 Regular pay plus $10 Employer match, vested) 210 Box 11 -0- Example 2: Deferral with delayed vesting (substantial risk of forfeiture) of employee and employer portions (no distributions and no vesting of prior-year deferrals). E filing income tax For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. E filing income tax The deferral of $20 was not vested upon deferral, and there was an employer match of $10 under the plan, which was also not vested. E filing income tax Regular pay = $200; Deferral, not vested = $20; Employer match, not vested = $10. E filing income tax Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, not vested) $180 Box 3 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 5 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 11 -0- Example 3: Deferral that is immediately vested with prior-year deferrals and investment earnings on the prior-year deferrals that are now vesting (no distributions). E filing income tax For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. E filing income tax The deferral of $20 was vested upon deferral. E filing income tax During the year, $100 of prior-year deferrals and $15 of investment earnings on the $100 of prior-year deferrals became vested. E filing income tax Regular pay = $200; Deferral, vested = $20; Vesting of prior-year deferrals = $100; Vesting of investment earnings on $100 of prior-year deferral = $15. E filing income tax Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, vested) $180 Box 3 ($200 Regular pay plus $100 vested prior-year deferral plus $15 earnings on deferral) 315 Box 5 ($200 Regular pay plus $100 vested prior-year deferral plus $15 vested investment earnings on prior year deferral) 315 Box 11 ($100 vested prior-year deferral plus $15 earnings) 115 Example 4: No deferrals but there are distributions (no vesting of prior-year deferrals). E filing income tax For the year, the employee’s regular pay was $100, and the employee deferred no pay into the employer’s NQDC plan. E filing income tax There was no vesting of prior-year deferrals under the plan. E filing income tax During the year, there were total distributions of $50 from the plan to the employee. E filing income tax Regular pay = $100; Distribution = $50. E filing income tax Form W-2 Completion Amount Box 1 ($100 Regular pay plus $50 Distribution) $150 Box 3 ($100 Regular pay ) 100 Box 5 ($100 Regular pay) 100 Box 11 ($50 Distribution) 50 Special rule for box 11 of Form W-2 (distributions and deferral in the same year). E filing income tax   If, in the same year, there are NQDC distributions and there are deferrals that are reportable in boxes 3 and/or 5 (current or prior-year deferrals) of Form W-2, do not complete box 11. E filing income tax Instead, report on Form SSA-131 the total amount the employee earned during the year. E filing income tax * Submit the SSA-131 to the nearest SSA office or give it to the employee. E filing income tax   *Generally, the amount earned by the employee during the tax year for purposes of item 6 of Form SSA-131 is the amount reported in box 1 of Form W-2 plus current-year deferrals that are vested (employee and employer portions) less distributions. E filing income tax Do not consider prior-year deferrals that are vesting in the current year. E filing income tax If there was a plan failure, the box 1 amount in this calculation should be as if there were no plan failure. E filing income tax Example 5: Deferral that is immediately vested and there are distributions (no vesting of prior-year deferrals). E filing income tax For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. E filing income tax There was also an employer match of $10. E filing income tax The deferral and employer match were vested upon deferral. E filing income tax There was no vesting of prior-year deferrals under the plan. E filing income tax During the year, there were total distributions of $50 from the plan to the employee. E filing income tax Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10; Distribution = $50. E filing income tax Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, vested) $230 Boxes 3 and 5 ($200 Regular pay plus $10 vested employer match) 210 Leave Box 11 blank. E filing income tax File Form SSA-131 -0-     Form SSA-131 Completion Item 6 - amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $30 vested current year employee deferral and employer match) $210 Example 6: Deferral with delayed vesting and there are distributions (no vesting of prior-year deferrals). E filing income tax For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. E filing income tax The deferral was not vested upon deferral. E filing income tax There was no vesting of prior-year deferrals under the plan. E filing income tax During the year, there were total distributions of $50 from the plan to the employee. E filing income tax Regular pay = $200; Deferral, not vested = $20; Distribution = $50. E filing income tax Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay minus $20 deferral that is not vested) 180 Box 11 ($50 Distribution). E filing income tax 50 Example 7: Deferral that is immediately vested and there are distributions (also vesting of prior-year deferrals and earnings on those prior-year deferrals). E filing income tax For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. E filing income tax The deferral was vested upon deferral. E filing income tax There was vesting of $100 of prior-year deferrals and $15 of earnings on the $100 prior-year deferral under the plan. E filing income tax During the year, there were total distributions of $50 from the plan to the employee. E filing income tax Regular pay = $200; Deferral, vested = $20; Distribution = $50; Vesting of prior-year deferrals ($100) and earnings on those prior-year deferrals ($15) = $115. E filing income tax Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 vested deferral $230 Boxes 3 and 5 ($200 Regular pay Plus $115 vested prior deferral (with vested earnings on the deferral)) 315 Leave Box 11 blank. E filing income tax File Form SSA-131 -0-     Form SSA-131 Completion Item 6, amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $20 vested current year deferral) $200 Example 8: Deferral with delayed vesting and there are distributions (vesting of prior-year deferrals, including employer matches, and earnings on those deferrals). E filing income tax For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. E filing income tax The deferral was not vested upon deferral. E filing income tax There was also vesting of prior-year deferrals and employer matches and earnings on these amounts under the plan ($115). E filing income tax During the year, there were total distributions of $50 from the plan to the employee. E filing income tax Regular pay = $200; Deferral, not vested = $20; Distribution = $50; Vesting of prior-year deferrals and employer match = $100 plus earnings on that $100 of $15. E filing income tax Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay plus $115 vested prior-year deferral and prior year employer match and earning on the prior year amounts minus $20 deferral that is not vested) 295 Leave Box 11 blank. E filing income tax File Form SSA-131 -0-     Form SSA-131 Completion Item 6 ($230 Amount from Box 1 of Form W-2 minus $50 Distribution) $180 Table 2. E filing income tax Specifications for Electronic Reporting of Special Wage Payments Record Position  Field Size   Description Start End 1 3 3 Record Type—must include only the capital letters “SWP” 4 12 9 SSN—must be numeric and may not be all zeros 13 27 15 Last Name—all capitals and no punctuation; may have blanks on right only 28 38 11 First Name—all capitals and no punctuation; may have blanks on right only 39 39 1 Middle Initial—must be either a capital letter or blank 40 48 9 EIN—must be numeric and may not be all zeros 49 59 11 Payment—must be numeric; may not be all zeros; last two digits on right are assumed to be cents; no period or dollar sign 60 63 4 Payment Year—must be only a four-digit year 64 66 3 SSA Office Code—must be numeric and may be all zeros 67 67 1 Payment Type Code—must be the capital letter “T” 68 117 50 Filler  The record format is a fixed length of 117. E filing income tax  The file format is ASCII. E filing income tax  Submit only one file at a time. E filing income tax   Table 3. E filing income tax Sample—Paper Listing for Reporting Special Wage Payments to Several Employees Report of Special Wage PaymentsTax Year: Page of A. E filing income tax Employer Name: EIN:   Address: Contact Name:     Phone: ( )   . E filing income tax 1) B. E filing income tax Employee Name: (Last) (First) (MI)   C. E filing income tax SSN: D. E filing income tax SWP:$ E. E filing income tax Type: Other: 2) B. E filing income tax Employee Name: (Last) (First) (MI)   C. E filing income tax SSN: D. E filing income tax SWP:$ E. E filing income tax Type: Other: 3) B. E filing income tax Employee Name: (Last) (First) (MI)   C. E filing income tax SSN: D. E filing income tax SWP:$ E. E filing income tax Type: Other: 4) B. E filing income tax Employee Name: (Last) (First) (MI)   C. E filing income tax SSN: D. E filing income tax SWP:$ E. E filing income tax Type: Other: 5) B. E filing income tax Employee Name: (Last) (First) (MI)   C. E filing income tax SSN: D. E filing income tax SWP:$ E. E filing income tax Type: Other:     INSTRUCTIONS:   Enter tax year and page number. E filing income tax   A. E filing income tax Employer name, employer identification number (EIN), address, the name of a contact person, and a phone number where the contact person can be reached during normal business hours. E filing income tax   B. E filing income tax Employee's name. E filing income tax   C. E filing income tax Employee's social security number (SSN). E filing income tax   D. E filing income tax Total amount of special wage payments made to the employee. E filing income tax   E. E filing income tax Type of special wage payment from the following list: (1) Vacation Pay, (2) Sick Pay, (3) Severance Pay,  (4) Bonus, (5) Deferred Compensation, (6) Stock Options, and (7) Other—Please explain. E filing income tax   Do not use a paper listing for nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in block 11 of Form W-2. E filing income tax (Get Form SSA-131. E filing income tax )                 Prev  Up  Next   Home   More Online Publications