Understanding Your Annual IRS Form W-2

IRS instructions for form W-2 are listed on the back of your W-2 (copy C). For your convenience, we have provided the information below on certain boxes on the form that we hope you find helpful. Please address specific tax questions to the IRS or your tax preparer.

Box 1 – Wages, Tips, other compensation

This box includes gross wages earned during the calendar year (not school year), less your non-taxable contributions to: PERS, TRS, health plan, 403(b) annuity plans, Section 125 Medical and/or Dependent Care Flexible Spending Account Program, Health Savings Account (HSA), plus the taxable portion of mileage over the federally approved rate of 54 cents per mile and the cost of group term life insurance in excess of $50,000.

Box 3 and Box 5 – Social security (FICA) and Medicare wages

For PERS eligible employees, this box includes gross wages earned during the calendar year (not school year), less your non-taxable contributions to: health plan and Section 125 Medical and/or Dependent Care Flexible Spending Account Program, plus the taxable portion of mileage over the federally approved rate of 54 cents per mile and the cost of group term life insurance in excess of $50,000. TRS eligible employees are not subject to social security and may or may not be subject to Medicare depending on the date of hire. Since PERS and 403(b) contributions are subject to FICA and Medicare taxes and TRS contributions (in some cases) are subject to Medicare taxes, Box 3 and 5 may be greater than the amounts in Box 1.

Box 10 – Dependent care benefits

If you participated in a Section 125 Dependent Care Flexible Spending Account, this box shows your total contributions made to that program in the calendar year. These contributions are excluded from Box 1, Box 3, and Box 5.

Box 12 – Various information in four boxes (a, b, c, d)

These boxes list various amounts that you may or may not need for preparing your income tax return. The items that may show up in these boxes are:

Code C:  The cost of group-term life insurance over $50,000 included in Box 1, Box 3 and Box 5.

Code DD:  New required reporting beginning in 2013. This is the total cost of employer-sponsored health coverage. The amount reported with code DD is informational only and is not taxable.

Code E:  Elective deferrals under a Section 403(b) salary reduction agreement. This amount is excluded from Box 1.

Code L:  The non-taxable mileage at the federally approved rate of 54 cents per mile.

Code W:  Employee elected deferrals to your health savings account. This amount is excluded from Box 1.

Box 14 – Benefits included in Box 1

This box includes the amount of any taxable fringe benefit included in Box 1 and not shown in Box 10 or Box 12, including mileage over the federally approved rate (stated above) and any taxable business expense (FRB).

NOTE: Changing your W-4 federal tax withholding allowances for the calendar year. If you need to make a change in your federal income tax withholding allowances, prepare a new W-4 Form.  For applicable employees, the tax-sheltered 403(b) annuity deferral limit for 2018 will be $18,500. Depending on your age and years of service with the FNSBSD you may be eligible for additional limits beyond this amount.