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1o40 Ez Form

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1o40 Ez Form

1o40 ez form Publication 939 - Main Content Table of Contents General Information Taxation of Periodic PaymentsInvestment in the Contract Expected Return Computation Under the General Rule How To Use Actuarial TablesUnisex Annuity Tables Special Elections Worksheets for Determining Taxable Annuity Actuarial Tables Requesting a Ruling on Taxation of Annuity How To Get Tax HelpLow Income Taxpayer Clinics General Information Some of the terms used in this publication are defined in the following paragraphs. 1o40 ez form A pension is generally a series of payments made to you after you retire from work. 1o40 ez form Pension payments are made regularly and are for past services with an employer. 1o40 ez form An annuity is a series of payments under a contract. 1o40 ez form You can buy the contract alone or you can buy it with the help of your employer. 1o40 ez form Annuity payments are made regularly for more than one full year. 1o40 ez form Note. 1o40 ez form Distributions from pensions and annuities follow the same rules as outlined in this publication unless otherwise noted. 1o40 ez form Types of pensions and annuities. 1o40 ez form   Particular types of pensions and annuities include: Fixed period annuities. 1o40 ez form You receive definite amounts at regular intervals for a definite length of time. 1o40 ez form Annuities for a single life. 1o40 ez form You receive definite amounts at regular intervals for life. 1o40 ez form The payments end at death. 1o40 ez form Joint and survivor annuities. 1o40 ez form The first annuitant receives a definite amount at regular intervals for life. 1o40 ez form After he or she dies, a second annuitant receives a definite amount at regular intervals for life. 1o40 ez form The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant. 1o40 ez form Variable annuities. 1o40 ez form You receive payments that may vary in amount for a definite length of time or for life. 1o40 ez form The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds or cost-of-living indexes. 1o40 ez form Disability pensions. 1o40 ez form You are under minimum retirement age and receive payments because you retired on disability. 1o40 ez form If, at the time of your retirement, you were permanently and totally disabled, you may be eligible for the credit for the elderly or the disabled discussed in Publication 524. 1o40 ez form If your annuity starting date is after November 18, 1996, the General Rule cannot be used for the following qualified plans. 1o40 ez form A qualified employee plan is an employer's stock bonus, pension, or profit-sharing plan that is for the exclusive benefit of employees or their beneficiaries. 1o40 ez form This plan must meet Internal Revenue Code requirements. 1o40 ez form It qualifies for special tax benefits, including tax deferral for employer contributions and rollover distributions. 1o40 ez form However, you must use the General Rule if you were 75 or over and the annuity payments are guaranteed for more than 5 years. 1o40 ez form A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements. 1o40 ez form A tax-sheltered annuity is a special annuity plan or contract purchased for an employee of a public school or tax-exempt organization. 1o40 ez form   The General Rule is used to figure the tax treatment of various types of pensions and annuities, including nonqualified employee plans. 1o40 ez form A nonqualified employee plan is an employer's plan that does not meet Internal Revenue Code requirements. 1o40 ez form It does not qualify for most of the tax benefits of a qualified plan. 1o40 ez form Annuity worksheets. 1o40 ez form   The worksheets found near the end of the text of this publication may be useful to you in figuring the taxable part of your annuity. 1o40 ez form Request for a ruling. 1o40 ez form   If you are unable to determine the income tax treatment of your pension or annuity, you may ask the Internal Revenue Service to figure the taxable part of your annuity payments. 1o40 ez form This is treated as a request for a ruling. 1o40 ez form See Requesting a Ruling on Taxation of Annuity near the end of this publication. 1o40 ez form Withholding tax and estimated tax. 1o40 ez form   Your pension or annuity is subject to federal income tax withholding unless you choose not to have tax withheld. 1o40 ez form If you choose not to have tax withheld from your pension or annuity, or if you do not have enough income tax withheld, you may have to make estimated tax payments. 1o40 ez form Taxation of Periodic Payments This section explains how the periodic payments you receive under a pension or annuity plan are taxed under the General Rule. 1o40 ez form Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of time greater than one year (such as for 15 years or for life). 1o40 ez form These payments are also known as amounts received as an annuity. 1o40 ez form If you receive an amount from your plan that is a nonperiodic payment (amount not received as an annuity), see Taxation of Nonperiodic Payments in Publication 575. 1o40 ez form In general, you can recover your net cost of the pension or annuity tax free over the period you are to receive the payments. 1o40 ez form The amount of each payment that is more than the part that represents your net cost is taxable. 1o40 ez form Under the General Rule, the part of each annuity payment that represents your net cost is in the same proportion that your investment in the contract is to your expected return. 1o40 ez form These terms are explained in the following discussions. 1o40 ez form Investment in the Contract In figuring how much of your pension or annuity is taxable under the General Rule, you must figure your investment in the contract. 1o40 ez form First, find your net cost of the contract as of the annuity starting date (defined later). 1o40 ez form To find this amount, you must first figure the total premiums, contributions, or other amounts paid. 1o40 ez form This includes the amounts your employer contributed if you were required to include these amounts in income. 1o40 ez form It also includes amounts you actually contributed (except amounts for health and accident benefits and deductible voluntary employee contributions). 1o40 ez form From this total cost you subtract: Any refunded premiums, rebates, dividends, or unrepaid loans (any of which were not included in your income) that you received by the later of the annuity starting date or the date on which you received your first payment. 1o40 ez form Any additional premiums paid for double indemnity or disability benefits. 1o40 ez form Any other tax-free amounts you received under the contract or plan before the later of the dates in (1). 1o40 ez form The annuity starting date   is the later of the first day of the first period for which you receive payment under the contract or the date on which the obligation under the contract becomes fixed. 1o40 ez form Example. 1o40 ez form On January 1 you completed all your payments required under an annuity contract providing for monthly payments starting on August 1, for the period beginning July 1. 1o40 ez form The annuity starting date is July 1. 1o40 ez form This is the date you use in figuring your investment in the contract and your expected return (discussed later). 1o40 ez form Adjustments If any of the following items apply, adjust (add or subtract) your total cost to find your net cost. 1o40 ez form Foreign employment. 1o40 ez form   If you worked abroad, your cost may include contributions by your employer to the retirement plan, but only if those contributions would be excludible from your gross income had they been paid directly to you as compensation. 1o40 ez form The contributions that apply are: Contributions before 1963 by your employer, Contributions after 1962 by your employer if the contributions would be excludible from your gross income (without regard to the foreign earned income exclusion) had they been paid directly to you, or Contributions after 1996 by your employer on your behalf if you performed the services of a foreign missionary (a duly ordained, commissioned, or licensed minister of a church or a lay person) if the contributions would be excludible from your gross income had they been paid directly to you. 1o40 ez form Foreign employment contributions while a nonresident alien. 1o40 ez form   In determining your cost, special rules apply if you are a U. 1o40 ez form S. 1o40 ez form citizen or resident alien who received distributions from a plan to which contributions were made while you were a nonresident alien. 1o40 ez form Your contributions and your employer's contributions are not included in your cost if the contributions: Were made based on compensation which was for services performed outside the United States which you were a nonresident alien, and Were not subject to income tax under the laws of the United States or any foreign country, but only if the contribution would have been subject to income tax if they had been paid as cash compensation when the services were performed. 1o40 ez form Death benefit exclusion. 1o40 ez form   If you are the beneficiary of a deceased employee (or former employee), who died before August 21, 1996, you may qualify for a death benefit exclusion of up to $5,000. 1o40 ez form The beneficiary of a deceased employee who died after August 20, 1996, will not qualify for the death benefit exclusion. 1o40 ez form How to adjust your total cost. 1o40 ez form   If you are eligible, treat the amount of any allowable death benefit exclusion as additional cost paid by the employee. 1o40 ez form Add it to the cost or unrecovered cost of the annuity at the annuity starting date. 1o40 ez form See Example 3 under Computation Under General Rule for an illustration of the adjustment to the cost of the contract. 1o40 ez form Net cost. 1o40 ez form   Your total cost plus certain adjustments and minus other amounts already recovered before the annuity starting date is your net cost. 1o40 ez form This is the unrecovered investment in the contract as of the annuity starting date. 1o40 ez form If your annuity starting date is after 1986, this is the maximum amount that you may recover tax free under the contract. 1o40 ez form Refund feature. 1o40 ez form   Adjustment for the value of the refund feature is only applicable when you report your pension or annuity under the General Rule. 1o40 ez form Your annuity contract has a refund feature if: The expected return ( discussed later) of an annuity depends entirely or partly on the life of one or more individuals, The contract provides that payments will be made to a beneficiary or the estate of an annuitant on or after the death of the annuitant if a stated amount or a stated number of payments has not been paid to the annuitant or annuitants before death, and The payments are a refund of the amount you paid for the annuity contract. 1o40 ez form   If your annuity has a refund feature, you must reduce your net cost of the contract by the value of the refund feature (figured using Table III or VII at the end of this publication, also see How To Use Actuarial Tables , later) to find the investment in the contract. 1o40 ez form Zero value of refund feature. 1o40 ez form   For a joint and survivor annuity, the value of the refund feature is zero if: Both annuitants are age 74 or younger, The payments are guaranteed for less than 2½ years, and The survivor's annuity is at least 50% of the first annuitant's annuity. 1o40 ez form   For a single-life annuity without survivor benefit, the value of the refund feature is zero if: The payments are guaranteed for less than 2½ years, and The annuitant is: Age 57 or younger (if using the new (unisex) annuity tables), Age 42 or younger (if male and using the old annuity tables), or Age 47 or younger (if female and using the old annuity tables). 1o40 ez form   If you do not meet these requirements, you will have to figure the value of the refund feature, as explained in the following discussion. 1o40 ez form Examples. 1o40 ez form The first example shows how to figure the value of the refund feature when there is only one beneficiary. 1o40 ez form Example 2 shows how to figure the value of the refund feature when the contract provides, in addition to a whole life annuity, one or more temporary life annuities for the lives of children. 1o40 ez form In both examples, the taxpayer elects to use Tables V through VIII. 1o40 ez form If you need the value of the refund feature for a joint and survivor annuity, write to the Internal Revenue Service as explained under Requesting a Ruling on Taxation of Annuity near the end of this publication. 1o40 ez form Example 1. 1o40 ez form At age 65, Barbara bought for $21,053 an annuity with a refund feature. 1o40 ez form She will get $100 a month for life. 1o40 ez form Barbara's contract provides that if she does not live long enough to recover the full $21,053, similar payments will be made to her surviving beneficiary until a total of $21,053 has been paid under the contract. 1o40 ez form In this case, the contract cost and the total guaranteed return are the same ($21,053). 1o40 ez form Barbara's investment in the contract is figured as follows: Net cost $21,053 Amount to be received annually $1,200   Number of years for which payment is guaranteed ($21,053 divided by $1,200) 17. 1o40 ez form 54   Rounded to nearest whole number of years 18   Percentage from Actuarial Table VII for age 65 with 18 years of guaranteed payments 15%   Value of the refund feature (rounded to the nearest dollar)—15% of $21,053 3,158 Investment in the contract, adjusted for value of refund feature $17,895       If the total guaranteed return were less than the $21,053 net cost of the contract, Barbara would apply the appropriate percentage from the tables to the lesser amount. 1o40 ez form For example, if the contract guaranteed the $100 monthly payments for 17 years to Barbara's estate or beneficiary if she were to die before receiving all the payments for that period, the total guaranteed return would be $20,400 ($100 × 12 × 17 years). 1o40 ez form In this case, the value of the refund feature would be $2,856 (14% of $20,400) and Barbara's investment in the contract would be $18,197 ($21,053 minus $2,856) instead of $17,895. 1o40 ez form Example 2. 1o40 ez form John died while still employed. 1o40 ez form His widow, Eleanor, age 48, receives $171 a month for the rest of her life. 1o40 ez form John's son, Elmer, age 9, receives $50 a month until he reaches age 18. 1o40 ez form John's contributions to the retirement fund totaled $7,559. 1o40 ez form 45, with interest on those contributions of $1,602. 1o40 ez form 53. 1o40 ez form The guarantee or total refund feature of the contract is $9,161. 1o40 ez form 98 ($7,559. 1o40 ez form 45 plus $1,602. 1o40 ez form 53). 1o40 ez form The adjustment in the investment in the contract is figured as follows: A) Expected return:*       1) Widow's expected return:         Annual annuity ($171 × 12) $2,052       Multiplied by factor from Table V         (nearest age 48) 34. 1o40 ez form 9 $71,614. 1o40 ez form 80   2) Child's expected return:         Annual annuity ($50 × 12) $600       Multiplied by factor from         Table VIII (nearest age 9         for term of 9 years) 9. 1o40 ez form 0 5,400. 1o40 ez form 00   3) Total expected return   $77,014. 1o40 ez form 80 B) Adjustment for refund feature:       1) Contributions (net cost) $7,559. 1o40 ez form 45   2) Guaranteed amount (contributions of $7,559. 1o40 ez form 45 plus interest of $1,602. 1o40 ez form 53) $9,161. 1o40 ez form 98   3) Minus: Expected return under child's (temporary life) annuity (A(2)) 5,400. 1o40 ez form 00   4) Net guaranteed amount $3,761. 1o40 ez form 98   5) Multiple from Table VII (nearest age 48 for 2 years duration (recovery of $3,761. 1o40 ez form 98 at $171 a month to nearest whole year)) 0%   6) Adjustment required for value of refund feature rounded to the nearest whole dollar  (0% × $3,761. 1o40 ez form 98, the smaller of B(3) or B(6)) 0 *Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. 1o40 ez form See the discussion of expected return, later in this publication. 1o40 ez form Free IRS help. 1o40 ez form   If you need to request assistance to figure the value of the refund feature, see Requesting a Ruling on Taxation of Annuity near the end of this publication. 1o40 ez form Expected Return Your expected return is the total amount you and other eligible annuitants can expect to receive under the contract. 1o40 ez form The following discussions explain how to figure the expected return with each type of annuity. 1o40 ez form A person's age, for purposes of figuring the expected return, is the age at the birthday nearest to the annuity starting date. 1o40 ez form Fixed period annuity. 1o40 ez form   If you will get annuity payments for a fixed number of years, without regard to your life expectancy, you must figure your expected return based on that fixed number of years. 1o40 ez form It is the total amount you will get beginning at the annuity starting date. 1o40 ez form You will receive specific periodic payments for a definite period of time, such as a fixed number of months (but not less than 13). 1o40 ez form To figure your expected return, multiply the fixed number of months for which payments are to be made by the amount of the payment specified for each period. 1o40 ez form Single life annuity. 1o40 ez form   If you are to get annuity payments for the rest of your life, find your expected return as follows. 1o40 ez form You must multiply the amount of the annual payment by a multiple based on your life expectancy as of the annuity starting date. 1o40 ez form These multiples are set out in actuarial Tables I and V near the end of this publication (see How To Use Actuarial Tables , later). 1o40 ez form   You may need to adjust these multiples if the payments are made quarterly, semiannually, or annually. 1o40 ez form See Adjustments to Tables I, II, V, VI, and VIA following Table I. 1o40 ez form Example. 1o40 ez form Henry bought an annuity contract that will give him an annuity of $500 a month for his life. 1o40 ez form If at the annuity starting date Henry's nearest birthday is 66, the expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table V, age 66 × 19. 1o40 ez form 2 Expected return $115,200 If the payments were to be made to Henry quarterly and the first payment was made one full month after the annuity starting date, Henry would adjust the 19. 1o40 ez form 2 multiple by +. 1o40 ez form 1. 1o40 ez form His expected return would then be $115,800 ($6,000 × 19. 1o40 ez form 3). 1o40 ez form Annuity for shorter of life or specified period. 1o40 ez form   With this type of annuity, you are to get annuity payments either for the rest of your life or until the end of a specified period, whichever period is shorter. 1o40 ez form To figure your expected return, multiply the amount of your annual payment by a multiple in Table IV or VIII for temporary life annuities. 1o40 ez form Find the proper multiple based on your sex (if using Table IV), your age at the annuity starting date, and the nearest whole number of years in the specified period. 1o40 ez form Example. 1o40 ez form Harriet purchased an annuity this year that will pay her $200 each month for five years or until she dies, whichever period is shorter. 1o40 ez form She was age 65 at her birthday nearest the annuity starting date. 1o40 ez form She figures the expected return as follows: Annual payment ($200 × 12 months) $2,400 Multiple shown in Table VIII, age 65, 5-year term × 4. 1o40 ez form 9 Expected return $11,760 She uses Table VIII (not Table IV) because all her contributions were made after June 30, 1986. 1o40 ez form See Special Elections, later. 1o40 ez form Joint and survivor annuities. 1o40 ez form   If you have an annuity that pays you a periodic income for life and after your death provides an identical lifetime periodic income to your spouse (or some other person), you figure the expected return based on your combined life expectancies. 1o40 ez form To figure the expected return, multiply the annual payment by a multiple in Table II or VI based on your joint life expectancies. 1o40 ez form If your payments are made quarterly, semiannually, or annually, you may need to adjust these multiples. 1o40 ez form See Adjustments to Tables I, II, V, VI, and VIA following Table I near the end of this publication. 1o40 ez form Example. 1o40 ez form John bought a joint and survivor annuity providing payments of $500 a month for his life, and, after his death, $500 a month for the remainder of his wife's life. 1o40 ez form At John's annuity starting date, his age at his nearest birthday is 70 and his wife's at her nearest birthday is 67. 1o40 ez form The expected return is figured as follows: Annual payment ($500 × 12 months) $6,000 Multiple shown in Table VI, ages 67 and 70 × 22. 1o40 ez form 0 Expected return $132,000 Different payments to survivor. 1o40 ez form   If your contract provides that payments to a survivor annuitant will be different from the amount you receive, you must use a computation which accounts for both the joint lives of the annuitants and the life of the survivor. 1o40 ez form Example 1. 1o40 ez form Gerald bought a contract providing for payments to him of $500 a month for life and, after his death, payments to his wife, Mary, of $350 a month for life. 1o40 ez form If, at the annuity starting date, Gerald's nearest birthday is 70 and Mary's is 67, the expected return under the contract is figured as follows: Combined multiple for Gerald and Mary, ages 70 and 67 (from Table VI)   22. 1o40 ez form 0 Multiple for Gerald, age 70 (from Table V)   16. 1o40 ez form 0 Difference: Multiple applicable to Mary   6. 1o40 ez form 0 Gerald's annual payment ($500 × 12) $6,000   Gerald's multiple 16. 1o40 ez form 0   Gerald's expected return   $96,000 Mary's annual payment ($350 × 12) $4,200   Mary's multiple 6. 1o40 ez form 0   Mary's expected return   25,200 Total expected return under the contract   $121,200 Example 2. 1o40 ez form Your husband died while still employed. 1o40 ez form Under the terms of his employer's retirement plan, you are entitled to get an immediate annuity of $400 a month for the rest of your life or until you remarry. 1o40 ez form Your daughters, Marie and Jean, are each entitled to immediate temporary life annuities of $150 a month until they reach age 18. 1o40 ez form You were 50 years old at the annuity starting date. 1o40 ez form Marie was 16 and Jean was 14. 1o40 ez form Using the multiples shown in Tables V and VIII at the end of this publication, the total expected return on the annuity starting date is $169,680, figured as follows: Widow, age 50 (multiple from Table V—33. 1o40 ez form 1 × $4,800 annual payment) $158,880 Marie, age 16 for 2 years duration (multiple from Table VIII—2. 1o40 ez form 0 × $1,800 annual payment) 3,600 Jean, age 14 for 4 years duration (multiple from Table VIII—4. 1o40 ez form 0 × $1,800 annual payment) 7,200 Total expected return $169,680 No computation of expected return is made based on your husband's age at the date of death because he died before the annuity starting date. 1o40 ez form Computation Under the General Rule Note. 1o40 ez form Variable annuities use a different computation for determining the exclusion amounts. 1o40 ez form See Variable annuities later. 1o40 ez form Under the General Rule, you figure the taxable part of your annuity by using the following steps: Step 1. 1o40 ez form   Figure the amount of your investment in the contract, including any adjustments for the refund feature and the death benefit exclusion, if applicable. 1o40 ez form See Death benefit exclusion , earlier. 1o40 ez form Step 2. 1o40 ez form   Figure your expected return. 1o40 ez form Step 3. 1o40 ez form   Divide Step 1 by Step 2 and round to three decimal places. 1o40 ez form This will give you the exclusion percentage. 1o40 ez form Step 4. 1o40 ez form   Multiply the exclusion percentage by the first regular periodic payment. 1o40 ez form The result is the tax-free part of each pension or annuity payment. 1o40 ez form   The tax-free part remains the same even if the total payment increases due to variation in the annuity amount such as cost of living increases, or you outlive the life expectancy factor used. 1o40 ez form However, if your annuity starting date is after 1986, the total amount of annuity income that is tax free over the years cannot exceed your net cost. 1o40 ez form   Each annuitant applies the same exclusion percentage to his or her initial payment called for in the contract. 1o40 ez form Step 5. 1o40 ez form   Multiply the tax-free part of each payment (step 4) by the number of payments received during the year. 1o40 ez form This will give you the tax-free part of the total payment for the year. 1o40 ez form    In the first year of your annuity, your first payment or part of your first payment may be for a fraction of the payment period. 1o40 ez form This fractional amount is multiplied by your exclusion percentage to get the tax-free part. 1o40 ez form Step 6. 1o40 ez form   Subtract the tax-free part from the total payment you received. 1o40 ez form The rest is the taxable part of your pension or annuity. 1o40 ez form Example 1. 1o40 ez form You purchased an annuity with an investment in the contract of $10,800. 1o40 ez form Under its terms, the annuity will pay you $100 a month for life. 1o40 ez form The multiple for your age (age 65) is 20. 1o40 ez form 0 as shown in Table V. 1o40 ez form Your expected return is $24,000 (20 × 12 × $100). 1o40 ez form Your cost of $10,800, divided by your expected return of $24,000, equals 45. 1o40 ez form 0%. 1o40 ez form This is the percentage you will not have to include in income. 1o40 ez form Each year, until your net cost is recovered, $540 (45% of $1,200) will be tax free and you will include $660 ($1,200 − $540) in your income. 1o40 ez form If you had received only six payments of $100 ($600) during the year, your exclusion would have been $270 (45% of $100 × 6 payments). 1o40 ez form Example 2. 1o40 ez form Gerald bought a joint and survivor annuity. 1o40 ez form Gerald's investment in the contract is $62,712 and the expected return is $121,200. 1o40 ez form The exclusion percentage is 51. 1o40 ez form 7% ($62,712 ÷ $121,200). 1o40 ez form Gerald will receive $500 a month ($6,000 a year). 1o40 ez form Each year, until his net cost is recovered, $3,102 (51. 1o40 ez form 7% of his total payments received of $6,000) will be tax free and $2,898 ($6,000 − $3,102) will be included in his income. 1o40 ez form If Gerald dies, his wife will receive $350 a month ($4,200 a year). 1o40 ez form If Gerald had not recovered all of his net cost before his death, his wife will use the same exclusion percentage (51. 1o40 ez form 7%). 1o40 ez form Each year, until the entire net cost is recovered, his wife will receive $2,171. 1o40 ez form 40 (51. 1o40 ez form 7% of her payments received of $4,200) tax free. 1o40 ez form She will include $2,028. 1o40 ez form 60 ($4,200 − $2,171. 1o40 ez form 40) in her income tax return. 1o40 ez form Example 3. 1o40 ez form Using the same facts as Example 2 under Different payments to survivor, you are to receive an annual annuity of $4,800 until you die or remarry. 1o40 ez form Your two daughters each receive annual annuities of $1,800 until they reach age 18. 1o40 ez form Your husband contributed $25,576 to the plan. 1o40 ez form You are eligible for the $5,000 death benefit exclusion because your husband died before August 21, 1996. 1o40 ez form Adjusted Investment in the Contract Contributions $25,576 Plus: Death benefit exclusion 5,000 Adjusted investment in the contract $30,576 The total expected return, as previously figured (in Example 2 under Different payments to survivor), is $169,680. 1o40 ez form The exclusion percentage of 18. 1o40 ez form 0% ($30,576 ÷ $169,680) applies to the annuity payments you and each of your daughters receive. 1o40 ez form Each full year $864 (18. 1o40 ez form 0% × $4,800) will be tax free to you, and you must include $3,936 in your income tax return. 1o40 ez form Each year, until age 18, $324 (18. 1o40 ez form 0% × $1,800) of each of your daughters' payments will be tax free and each must include the balance, $1,476, as income on her own income tax return. 1o40 ez form Part-year payments. 1o40 ez form   If you receive payments for only part of a year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments received during the year. 1o40 ez form   If you receive amounts during the year that represent 12 payments, one for each month in that year, and an amount that represents payments for months in a prior year, apply the exclusion percentage to the first regular periodic payment, and multiply the result by the number of payments the amounts received represent. 1o40 ez form For instance, if you received amounts during the year that represent the 12 payments for that year plus an amount that represents three payments for a prior year, multiply that amount by the 15 (12 + 3) payments received that the year. 1o40 ez form   If you received a fractional payment, follow Step 5, discussed earlier. 1o40 ez form This gives you the tax-free part of your total payment. 1o40 ez form Example. 1o40 ez form On September 28, Mary bought an annuity contract for $22,050 that will give her $125 a month for life, beginning October 30. 1o40 ez form The applicable multiple from Table V is 23. 1o40 ez form 3 (age 61). 1o40 ez form Her expected return is $34,950 ($125 × 12 × 23. 1o40 ez form 3). 1o40 ez form Mary's investment in the contract of $22,050, divided by her expected return of $34,950, equals 63. 1o40 ez form 1%. 1o40 ez form Each payment received will consist of 63. 1o40 ez form 1% return of cost and 36. 1o40 ez form 9% taxable income, until her net cost of the contract is fully recovered. 1o40 ez form During the first year, Mary received three payments of $125, or $375, of which $236. 1o40 ez form 63 (63. 1o40 ez form 1% × $375) is a return of cost. 1o40 ez form The remaining $138. 1o40 ez form 37 is included in income. 1o40 ez form Increase in annuity payments. 1o40 ez form   The tax-free amount remains the same as the amount figured at the annuity starting date, even if the payment increases. 1o40 ez form All increases in the installment payments are fully taxable. 1o40 ez form   However, if your annuity payments are scheduled to increase at a definite date in the future you must figure the expected return for that annuity using the method described in section 1. 1o40 ez form 72-5(a)(5) of the regulations. 1o40 ez form Example. 1o40 ez form Joe's wife died while she was still employed and, as her beneficiary, he began receiving an annuity of $147 per month. 1o40 ez form In figuring the taxable part, Joe elects to use Tables V through VIII. 1o40 ez form The cost of the contract was $7,938, consisting of the sum of his wife's net contributions, adjusted for any refund feature. 1o40 ez form His expected return as of the annuity starting date is $35,280 (age 65, multiple of 20. 1o40 ez form 0 × $1,764 annual payment). 1o40 ez form The exclusion percentage is $7,938 ÷ $35,280, or 22. 1o40 ez form 5%. 1o40 ez form During the year he received 11 monthly payments of $147, or $1,617. 1o40 ez form Of this amount, 22. 1o40 ez form 5% × $147 × 11 ($363. 1o40 ez form 83) is tax free as a return of cost and the balance of $1,253. 1o40 ez form 17 is taxable. 1o40 ez form Later, because of a cost-of-living increase, his annuity payment was increased to $166 per month, or $1,992 a year (12 × $166). 1o40 ez form The tax-free part is still only 22. 1o40 ez form 5% of the annuity payments as of the annuity starting date (22. 1o40 ez form 5% × $147 × 12 = $396. 1o40 ez form 90 for a full year). 1o40 ez form The increase of $228 ($1,992 − $1,764 (12 × $147)) is fully taxable. 1o40 ez form Variable annuities. 1o40 ez form   For variable annuity payments, figure the amount of each payment that is tax free by dividing your investment in the contract (adjusted for any refund feature) by the total number of periodic payments you expect to get under the contract. 1o40 ez form   If the annuity is for a definite period, you determine the total number of payments by multiplying the number of payments to be made each year by the number of years you will receive payments. 1o40 ez form If the annuity is for life, you determine the total number of payments by using a multiple from the appropriate actuarial table. 1o40 ez form Example. 1o40 ez form Frank purchased a variable annuity at age 65. 1o40 ez form The total cost of the contract was $12,000. 1o40 ez form The annuity starting date is January 1 of the year of purchase. 1o40 ez form His annuity will be paid, starting July 1, in variable annual installments for his life. 1o40 ez form The tax-free amount of each payment, until he has recovered his cost of his contract, is: Investment in the contract $12,000 Number of expected annual payments (multiple for age 65 from Table V) 20 Tax-free amount of each payment ($12,000 ÷ 20) $600 If Frank's first payment is $920, he includes only $320 ($920 − $600) in his gross income. 1o40 ez form   If the tax-free amount for a year is more than the payments you receive in that year, you may choose, when you receive the next payment, to refigure the tax-free part. 1o40 ez form Divide the amount of the periodic tax-free part that is more than the payment you received by the remaining number of payments you expect. 1o40 ez form The result is added to the previously figured periodic tax-free part. 1o40 ez form The sum is the amount of each future payment that will be tax free. 1o40 ez form Example. 1o40 ez form Using the facts of the previous example about Frank, assume that after Frank's $920 payment, he received $500 in the following year, and $1,200 in the year after that. 1o40 ez form Frank does not pay tax on the $500 (second year) payment because $600 of each annual pension payment is tax free. 1o40 ez form Since the $500 payment is less than the $600 annual tax-free amount, he may choose to refigure his tax-free part when he receives his $1,200 (third year) payment, as follows: Amount tax free in second year $600. 1o40 ez form 00 Amount received in second year 500. 1o40 ez form 00 Difference $100. 1o40 ez form 00 Number of remaining payments after the first 2 payments (age 67, from Table V) 18. 1o40 ez form 4 Amount to be added to previously determined annual tax-free part ($100 ÷ 18. 1o40 ez form 4) $5. 1o40 ez form 43 Revised annual tax-free part for third and later years ($600 + $5. 1o40 ez form 43) $605. 1o40 ez form 43 Amount taxable in third year ($1,200 − $605. 1o40 ez form 43) $594. 1o40 ez form 57 If you choose to refigure your tax-free amount,   you must file a statement with your income tax return stating that you are refiguring the tax-free amount in accordance with the rules of section 1. 1o40 ez form 72–4(d)(3) of the Income Tax Regulations. 1o40 ez form The statement must also show the following information: The annuity starting date and your age on that date. 1o40 ez form The first day of the first period for which you received an annuity payment in the current year. 1o40 ez form Your investment in the contract as originally figured. 1o40 ez form The total of all amounts received tax free under the annuity from the annuity starting date through the first day of the first period for which you received an annuity payment in the current tax year. 1o40 ez form Exclusion Limits Your annuity starting date determines the total amount of annuity income that you can exclude from income over the years. 1o40 ez form Exclusion limited to net cost. 1o40 ez form   If your annuity starting date is after 1986, the total amount of annuity income that you can exclude over the years as a return of your cost cannot exceed your net cost (figured without any reduction for a refund feature). 1o40 ez form This is the unrecovered investment in the contract as of the annuity starting date. 1o40 ez form   If your annuity starting date is after July 1, 1986, any unrecovered net cost at your (or last annuitant's) death is allowed as a miscellaneous itemized deduction on the final return of the decedent. 1o40 ez form This deduction is not subject to the 2%-of-adjusted-gross-income limit. 1o40 ez form Example 1. 1o40 ez form Your annuity starting date is after 1986. 1o40 ez form Your total cost is $12,500, and your net cost is $10,000, taking into account certain adjustments. 1o40 ez form There is no refund feature. 1o40 ez form Your monthly annuity payment is $833. 1o40 ez form 33. 1o40 ez form Your exclusion ratio is 12% and you exclude $100 a month. 1o40 ez form Your exclusion ends after 100 months, when you have excluded your net cost of $10,000. 1o40 ez form Thereafter, your annuity payments are fully taxable. 1o40 ez form Example 2. 1o40 ez form The facts are the same as in Example 1, except that there is a refund feature, and you die after 5 years with no surviving annuitant. 1o40 ez form The adjustment for the refund feature is $1,000, so the investment in the contract is $9,000. 1o40 ez form The exclusion ratio is 10. 1o40 ez form 8%, and your monthly exclusion is $90. 1o40 ez form After 5 years (60 months), you have recovered tax free only $5,400 ($90 x 60). 1o40 ez form An itemized deduction for the unrecovered net cost of $4,600 ($10,000 net cost minus $5,400) may be taken on your final income tax return. 1o40 ez form Your unrecovered investment is determined without regard to the refund feature adjustment, discussed earlier, under Adjustments. 1o40 ez form Exclusion not limited to net cost. 1o40 ez form   If your annuity starting date was before 1987, you could continue to take your monthly exclusion for as long as you receive your annuity. 1o40 ez form If you choose a joint and survivor annuity, your survivor continues to take the survivor's exclusion figured as of the annuity starting date. 1o40 ez form The total exclusion may be more than your investment in the contract. 1o40 ez form How To Use Actuarial Tables In figuring, under the General Rule, the taxable part of your annuity payments that you are to get for the rest of your life (rather than for a fixed number of years), you must use one or more of the actuarial tables in this publication. 1o40 ez form Unisex Annuity Tables Effective July 1, 1986, the Internal Revenue Service adopted new annuity Tables V through VIII, in which your sex is not considered when determining the applicable factor. 1o40 ez form These tables correspond to the old Tables I through IV. 1o40 ez form In general, Tables V through VIII must be used if you made contributions to the retirement plan after June 30, 1986. 1o40 ez form If you made no contributions to the plan after June 30, 1986, generally you must use only Tables I through IV. 1o40 ez form However, if you received an annuity payment after June 30, 1986, you may elect to use Tables V through VIII (see Annuity received after June 30, 1986, later). 1o40 ez form Special Elections Although you generally must use Tables V through VIII if you made contributions to the retirement plan after June 30, 1986, and Tables I through IV if you made no contributions after June 30, 1986, you can make the following special elections to select which tables to use. 1o40 ez form Contributions made both before July 1986 and after June 1986. 1o40 ez form   If you made contributions to the retirement plan both before July 1986 and after June 1986, you may elect to use Tables I through IV for the pre-July 1986 cost of the contract, and Tables V through VIII for the post-June 1986 cost. 1o40 ez form (See the examples below. 1o40 ez form )    Making the election. 1o40 ez form Attach this statement to your income tax return for the first year in which you receive an annuity:    “I elect to apply the provisions of paragraph (d) of section 1. 1o40 ez form 72–6 of the Income Tax Regulations. 1o40 ez form ”   The statement must also include your name, address, social security number, and the amount of the pre-July 1986 investment in the contract. 1o40 ez form   If your investment in the contract includes post-June 1986 contributions to the plan, and you do not make the election to use Tables I through IV and Tables V through VIII, then you can only use Tables V through VIII in figuring the taxable part of your annuity. 1o40 ez form You must also use Tables V through VIII if you are unable or do not wish to determine the portions of your contributions which were made before July 1, 1986, and after June 30, 1986. 1o40 ez form    Advantages of election. 1o40 ez form In general, a lesser amount of each annual annuity payment is taxable if you separately figure your exclusion ratio for pre-July 1986 and post-June 1986 contributions. 1o40 ez form    If you intend to make this election, save your records that substantiate your pre-July 1986 and post-June 1986 contributions. 1o40 ez form If the death benefit exclusion applies (see discussion, earlier), you do not have to apportion it between the pre-July 1986 and the post-June 1986 investment in the contract. 1o40 ez form   The following examples illustrate the separate computations required if you elect to use Tables I through IV for your pre-July 1986 investment in the contract and Tables V through VIII for your post-June 1986 investment in the contract. 1o40 ez form Example 1. 1o40 ez form Bill, who is single, contributed $42,000 to the retirement plan and will receive an annual annuity of $24,000 for life. 1o40 ez form Payment of the $42,000 contribution is guaranteed under a refund feature. 1o40 ez form Bill is 55 years old as of the annuity starting date. 1o40 ez form For figuring the taxable part of Bill's annuity, he chose to make separate computations for his pre-July 1986 investment in the contract of $41,300, and for his post-June 1986 investment in the contract of $700. 1o40 ez form       Pre- July 1986   Post- June 1986 A. 1o40 ez form Adjustment for refund feature         1) Net cost $41,300   $700   2) Annual annuity—$24,000  ($41,300/$42,000 × $24,000) $23,600       ($700/$42,000 × $24,000)     $400   3) Guarantee under contract $41,300   $700   4) No. 1o40 ez form of years payments  guaranteed (rounded), A(3) ÷ A(2) 2   2   5) Applicable percentage from  Tables III and VII 1%   0%   6) Adjustment for value of refund  feature, A(5) × smaller of A(1)  or A(3) $413   $0 B. 1o40 ez form Investment in the contract         1) Net cost $41,300   $700   2) Minus: Amount in A(6) 413   0   3) Investment in the contract $40,887   $700 C. 1o40 ez form Expected return         1) Annual annuity receivable $24,000   $24,000   2) Multiples from Tables I and V 21. 1o40 ez form 7   28. 1o40 ez form 6   3) Expected return, C(1) × C(2) $520,800   $686,400 D. 1o40 ez form Tax-free part of annuity         1) Exclusion ratio as decimal,  B(3) ÷ C(3) . 1o40 ez form 079   . 1o40 ez form 001   2) Tax-free part, C(1) × D(1) $1,896   $24 The tax-free part of Bill's total annuity is $1,920 ($1,896 plus $24). 1o40 ez form The taxable part of his annuity is $22,080 ($24,000 minus $1,920). 1o40 ez form If the annuity starting date is after 1986, the exclusion over the years cannot exceed the net cost (figured without any reduction for a refund feature). 1o40 ez form Example 2. 1o40 ez form Al is age 62 at his nearest birthday to the annuity starting date. 1o40 ez form Al's wife is age 60 at her nearest birthday to the annuity starting date. 1o40 ez form The joint and survivor annuity pays $1,000 per month to Al for life, and $500 per month to Al's surviving wife after his death. 1o40 ez form The pre-July 1986 investment in the contract is $53,100 and the post-June 1986 investment in the contract is $7,000. 1o40 ez form Al makes the election described in Example 1 . 1o40 ez form For purposes of this example, assume the refund feature adjustment is zero. 1o40 ez form If an adjustment is required, IRS will figure the amount. 1o40 ez form See Requesting a Ruling on Taxation of Annuity near the end of this publication. 1o40 ez form       Pre-  July 1986   Post-  June 1986 A. 1o40 ez form Adjustment for refund feature         1) Net cost $53,100   $7,000   2) Annual annuity—$12,000  ($53,100/$60,100 × $12,000) $10,602       ($7,000/$60,100 × $12,000)     $1,398   3) Guaranteed under the contract $53,100   $7,000   4) Number of years guaranteed,  rounded, A(3) ÷ A(2) 5   5   5) Applicable percentages 0%   0%   6) Refund feature adjustment, A(5) × smaller of A(1) or A(3) 0   0 B. 1o40 ez form Investment in the contract         1) Net cost $53,100   $7,000   2) Refund feature adjustment 0   0   3) Investment in the contract adjusted for refund feature $53,100   $7,000 C. 1o40 ez form Expected return         1) Multiple for both annuitants from Tables II and VI 25. 1o40 ez form 4   28. 1o40 ez form 8   2) Multiple for first annuitant from Tables I and V 16. 1o40 ez form 9   22. 1o40 ez form 5   3) Multiple applicable to surviving annuitant, subtract C(2) from C(1) 8. 1o40 ez form 5   6. 1o40 ez form 3   4) Annual annuity to surviving annuitant $6,000   $6,000   5) Portion of expected return for surviving annuitant, C(4) × C(3) $51,000   $37,800   6) Annual annuity to first annuitant $12,000   $12,000   7) Plus: Portion of expected return for first annuitant, C(6) × C(2) $202,800   $270,000   8) Expected return for both annuitants, C(5) + C(7) $253,800   $307,800 D. 1o40 ez form Tax-free part of annuity         1) Exclusion ratio as a decimal, B(3) ÷ C(8) . 1o40 ez form 209   . 1o40 ez form 023   2) Retiree's tax-free part of annuity, C(6) × D(1) $2,508   $276   3) Survivor's tax-free part of annuity, C(4) × D(1) $1,254   $138 The tax-free part of Al's total annuity is $2,784 ($2,508 + $276). 1o40 ez form The taxable part of his annuity is $9,216 ($12,000 − $2,784). 1o40 ez form The exclusion over the years cannot exceed the net cost of the contract (figured without any reduction for a refund feature) if the annuity starting date is after 1986. 1o40 ez form After Al's death, his widow will apply the same exclusion percentages (20. 1o40 ez form 9% and 2. 1o40 ez form 3%) to her annual annuity of $6,000 to figure the tax-free part of her annuity. 1o40 ez form Annuity received after June 30, 1986. 1o40 ez form   If you receive an annuity payment after June 30, 1986, (regardless of your annuity starting date), you may elect to treat the entire cost of the contract as post-June 1986 cost (even if you made no post-June 1986 contributions to the plan) and use Tables V through VIII. 1o40 ez form Once made, you cannot revoke the election, which will apply to all payments during the year and in any later year. 1o40 ez form    Make the election by attaching the following statement to your income tax return. 1o40 ez form    “I elect, under section 1. 1o40 ez form 72–9 of the Income Tax Regulations, to treat my entire cost of the contract as a post-June 1986 cost of the plan. 1o40 ez form ”   The statement must also include your name, address, and social security number. 1o40 ez form   You should also indicate you are making this election if you are unable or do not wish to determine the parts of your contributions which were made before July 1, 1986, and after June 30, 1986. 1o40 ez form Disqualifying form of payment or settlement. 1o40 ez form   If your annuity starting date is after June 30, 1986, and the contract provides for a disqualifying form of payment or settlement, such as an option to receive a lump sum in full discharge of the obligation under the contract, the entire investment in the contract is treated as post-June 1986 investment in the contract. 1o40 ez form See regulations section 1. 1o40 ez form 72–6(d)(3) for additional examples of disqualifying forms of payment or settlement. 1o40 ez form You can find the Income Tax Regulations in many libraries and at Internal Revenue Service Offices. 1o40 ez form Worksheets for Determining Taxable Annuity Worksheets I and II. 1o40 ez form   Worksheets I and II follow for determining your taxable annuity under Regulations Section 1. 1o40 ez form 72–6(d)(6) Election. 1o40 ez form Worksheet I For Determining Taxable Annuity Under Regulations Section 1. 1o40 ez form 72-6(d)(6) Election For Single Annuitant With No Survivor Annuity               Pre-July 1986   Post-June 1986 A. 1o40 ez form   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. 1o40 ez form )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)   Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages* from Tables III and VII                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. 1o40 ez form If not, the IRS will calculate the refund feature percentage. 1o40 ez form             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. 1o40 ez form   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund feature:                   B(1) minus B(2)                             C. 1o40 ez form   Expected Return             1)   Annual Annuity:                   12 times monthly annuity**             2)   Expected return multiples from Tables I and V             3)     Expected return:                   C(1) times C(2)                             D. 1o40 ez form   Tax-Free Part of Annuity             1)     Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(3)             2)     Tax-free part of annuity:                   C(1) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. 1o40 ez form     Worksheet II For Determining Taxable Annuity Under Regulations Section 1. 1o40 ez form 72-6(d)(6) Election For Joint and Survivor Annuity               Pre-July 1986   Post-June 1986 A. 1o40 ez form   Refund Feature Adjustment             1)   Net cost (total cost less returned premiums, dividends, etc. 1o40 ez form )             2)   Annual annuity allocation:                   Portion of net cost in A(1) x annual annuity                   Net cost             3)   Guaranteed under the contract             4)     Number of years guaranteed, rounded to whole years:                   A(3) divided by A(2)             5)   Applicable percentages*                   *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. 1o40 ez form If not, the IRS will calculate the refund feature percentage. 1o40 ez form             6)   Refund feature adjustment:                   A(5) times lesser of A(1) or A(3)                             B. 1o40 ez form   Investment in the Contract             1)   Net cost:                   A(1)             2)   Refund feature adjustment:                   A(6)             3)   Investment in the contract adjusted for refund future:                   B(1) minus B(2)                             C. 1o40 ez form   Expected Return             1)   Multiples for both annuitants, Tables II and VI             2)   Multiple for retiree. 1o40 ez form Tables I and VI             3)   Multiple for survivor:                   C(1) minus C(2)             4)   Annual annuity to survivor:                   12 times potential monthly rate for survivor**             5)   Expected return for survivor:                   C(3) times C(4)             6)   Annual annuity to retiree:                   12 times monthly rate for retiree**             7)   Expected return for retiree:                   C(2) times C(6)             8)   Total expected return:                   C(5) plus C(7)                             D. 1o40 ez form   Tax-Free Part of Annuity             1)   Exclusion ratio, as a decimal rounded to 3 places:                   B(3) divided by C(8)             2)   Retiree's tax-free part of annuity:                   C(6) times D(1)             3)   Survivor's tax-free part of annuity, if surviving after death of retiree:                   C(4) times D(1)             **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment. 1o40 ez form   Actuarial Tables Please click here for the text description of the image. 1o40 ez form Actuarial Tables Please click here for the text description of the image. 1o40 ez form Actuarial Tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description of the image. 1o40 ez form Actuarial tables Please click here for the text description 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of the image. 1o40 ez form Actuarial tables Requesting a Ruling on Taxation of Annuity If you are a retiree, or the survivor of an employee or retiree, you may ask the Internal Revenue Service to help you determine the taxation of your annuity. 1o40 ez form If you make this request, you are asking for a ruling. 1o40 ez form User fee. 1o40 ez form   Under the law in effect at the time this publication went to print, the IRS must charge a user fee for all ruling requests. 1o40 ez form You should call the IRS for the proper fee. 1o40 ez form A request solely for the value of the refund feature is not treated as a ruling request and requires no fee. 1o40 ez form Send your request to:     Internal Revenue Service  Attention: EP Letter Rulings P. 1o40 ez form O. 1o40 ez form Box 27063 McPherson Station Washington, DC 20038 The user fee is allowed as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit. 1o40 ez form When to make the request. 1o40 ez form   Please note that requests sent between February 1 and April 15 may experience some delay. 1o40 ez form We process requests in the order received, and we will reply to your request as soon as we can process it. 1o40 ez form If you do not receive your ruling by the required filing date, you may use Form 4868, Application for Automatic Extension of Time To File U. 1o40 ez form S. 1o40 ez form Individual Income Tax Return, to get an extension of time to file. 1o40 ez form Information you must furnish. 1o40 ez form   You must furnish the information listed below so the IRS can comply with your request. 1o40 ez form Failure to furnish the information will result in a delay in processing your request. 1o40 ez form Please send only copies of the following documents, as the IRS retains all material sent for its records: A letter explaining the question(s) you wish to have resolved or the information you need from the ruling. 1o40 ez form Copies of any documents showing distributions, annuity rates, and annuity options available to you. 1o40 ez form A copy of any Form 1099–R you received since your annuity began. 1o40 ez form A statement indicating whether you have filed your return for the year for which you are making the request. 1o40 ez form If you have requested an extension of time to file that return, please indicate the extension date. 1o40 ez form Your daytime phone number. 1o40 ez form Your current mailing address. 1o40 ez form A power of attorney if someone other than you, an attorney, a certified public accountant, or an enrolled agent is signing this request. 1o40 ez form Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose. 1o40 ez form A completed Tax Information Sheet (or facsimile) shown on the next page. 1o40 ez form Sign and date the Disclosure and Perjury Statement (or facsimile) at the end of the tax information sheet. 1o40 ez form This statement must be signed by the retiree or the survivor annuitant. 1o40 ez form It cannot be signed by a representative. 1o40 ez form Tax Information Sheet Please click here for the text description of the image. 1o40 ez form Tax Information Sheet Please click here for the text description of the image. 1o40 ez form Tax Information Sheet (continued) How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. 1o40 ez form Free help with your tax return. 1o40 ez form   You can get free help preparing your return nationwide from IRS-certified volunteers. 1o40 ez form The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 1o40 ez form The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1o40 ez form Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1o40 ez form In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 1o40 ez form To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 1o40 ez form gov, download the IRS2Go app, or call 1-800-906-9887. 1o40 ez form   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1o40 ez form To find the nearest AARP Tax-Aide site, visit AARP's website at www. 1o40 ez form aarp. 1o40 ez form org/money/taxaide or call 1-888-227-7669. 1o40 ez form For more information on these programs, go to IRS. 1o40 ez form gov and enter “VITA” in the search box. 1o40 ez form Internet. 1o40 ez form    IRS. 1o40 ez form gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 1o40 ez form Download the free IRS2Go app from the iTunes app store or from Google Play. 1o40 ez form Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 1o40 ez form Check the status of your 2013 refund with the Where's My Refund? application on IRS. 1o40 ez form gov or download the IRS2Go app and select the Refund Status option. 1o40 ez form The IRS issues more than 9 out of 10 refunds in less than 21 days. 1o40 ez form Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. 1o40 ez form You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 1o40 ez form The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 1o40 ez form Use the Interactive Tax Assistant (ITA) to research your tax questions. 1o40 ez form No need to wait on the phone or stand in line. 1o40 ez form The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. 1o40 ez form When you reach the response screen, you can print the entire interview and the final response for your records. 1o40 ez form New subject areas are added on a regular basis. 1o40 ez form  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 1o40 ez form gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 1o40 ez form You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 1o40 ez form The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 1o40 ez form When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. 1o40 ez form Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. 1o40 ez form You can also ask the IRS to mail a return or an account transcript to you. 1o40 ez form Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 1o40 ez form gov or by calling 1-800-908-9946. 1o40 ez form Tax return and tax account transcripts are generally available for the current year and the past three years. 1o40 ez form Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 1o40 ez form Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 1o40 ez form If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. 1o40 ez form Check the status of your amended return using Where's My Amended Return? Go to IRS. 1o40 ez form gov and enter Where's My Amended Return? in the search box. 1o40 ez form You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 1o40 ez form It can take up to 3 weeks from the date you mailed it to show up in our system. 1o40 ez form Make a payment using one of several safe and convenient electronic payment options available on IRS. 1o40 ez form gov. 1o40 ez form Select the Payment tab on the front page of IRS. 1o40 ez form gov for more information. 1o40 ez form Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 1o40 ez form Figure your income tax withholding with the IRS Withholding Calculator on IRS. 1o40 ez form gov. 1o40 ez form Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 1o40 ez form Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 1o40 ez form gov. 1o40 ez form Request an Electronic Filing PIN by going to IRS. 1o40 ez form gov and entering Electronic Filing PIN in the search box. 1o40 ez form Download forms, instructions and publications, including accessible versions for people with disabilities. 1o40 ez form Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 1o40 ez form gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 1o40 ez form An employee can answer questions about your tax account or help you set up a payment plan. 1o40 ez form Before you visit, check the Office Locator on IRS. 1o40 ez form gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 1o40 ez form If you have a special need, such as a disability, you can request an appointment. 1o40 ez form Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 1o40 ez form Apply for an Employer Identification Number (EIN). 1o40 ez form Go to IRS. 1o40 ez form gov and enter Apply for an EIN in the search box. 1o40 ez form Read the Internal Revenue Code, regulations, or other official guidance. 1o40 ez form Read Internal Revenue Bulletins. 1o40 ez form Sign up to receive local and national tax news and more by email. 1o40 ez form Just click on “subscriptions” above the search box on IRS. 1o40 ez form gov and choose from a variety of options. 1o40 ez form    Phone. 1o40 ez form You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 1o40 ez form Download the free IRS2Go app from the iTunes app store or from Google Play. 1o40 ez form Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. 1o40 ez form gov, or download the IRS2Go app. 1o40 ez form Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 1o40 ez form The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 1o40 ez form Mos
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The 1o40 Ez Form

1o40 ez form Publication 957 - Main Content Table of Contents 1. 1o40 ez form What is Back Pay?Reporting Back Pay Back Pay Under a Statute Nonstatutory Back Pay Format for Report to the SSA Questions 2. 1o40 ez form 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). 1o40 ez form 1. 1o40 ez form 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). 1o40 ez form 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. 1o40 ez form Damages for personal injury, interest, penalties, and legal fees included with back pay awards are not wages. 1o40 ez form Report all back pay. 1o40 ez form 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. 1o40 ez form See Back Pay Under a Statute , later, for more information. 1o40 ez form Reporting Back Pay The Internal Revenue Service (IRS) and the SSA consider back pay awards to be wages. 1o40 ez form However, for income tax purposes, the IRS treats all back pay as wages in the year paid. 1o40 ez form 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. 1o40 ez form The SSA no longer accepts reports on tapes, cartridges, and diskettes. 1o40 ez form Example. 1o40 ez form In 2012, Terry Morris earned wages of $50,000. 1o40 ez form 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. 1o40 ez form Her employer properly reflected social security wages of $110,100 and Medicare wages of $150,000 on her 2012 Form W-2. 1o40 ez form 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. 1o40 ez form Example. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form SSA treatment of back pay under a statute. 1o40 ez form   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. 1o40 ez form 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. 1o40 ez form   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. 1o40 ez form Then, the SSA can allocate the statutory back pay to the appropriate periods. 1o40 ez form   If a back pay award is not made under a statute, the SSA credits back pay as wages in the year paid. 1o40 ez form    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. 1o40 ez form    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. 1o40 ez form No further action is necessary. 1o40 ez form Example. 1o40 ez form 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. 1o40 ez form Her employer properly reported wages of $32,000 for social security and Medicare on her 2012 Form W-2. 1o40 ez form No further action is necessary. 1o40 ez form Information the SSA needs to properly credit back pay under a statute (special report). 1o40 ez form   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. 1o40 ez form There is no statute of limitations on the filing of the special report to enable the SSA to allocate the wages. 1o40 ez form The special report must include the following information. 1o40 ez form The employer's name, address, and employer identification number (EIN). 1o40 ez form A signed statement citing the federal or state statute under which the payment was made. 1o40 ez form 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). 1o40 ez form The name and telephone number of a person to contact. 1o40 ez form The SSA may have additional questions concerning the back pay case or the individual employee's information. 1o40 ez form A list of employees receiving the payment and the following information for each employee: The tax year you paid and reported the back pay. 1o40 ez form The employee's social security number (SSN). 1o40 ez form The employee's name (as shown on his or her social security card). 1o40 ez form The amount of the back pay award excluding any amounts specifically designated otherwise, for example, damages for personal injury, interest, penalties, and legal fees. 1o40 ez form The period(s) the back pay award covers (beginning and ending dates—month and year). 1o40 ez form 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)*. 1o40 ez form Do not include the back pay award shown in that wage report. 1o40 ez form 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. 1o40 ez form The amount to allocate to each reporting period*. 1o40 ez form This includes any amount you want allocated (if applicable) to the tax year of the award payment. 1o40 ez form 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. 1o40 ez form *Note. 1o40 ez form   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. 1o40 ez form For all tax years, show and identify the social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) separately. 1o40 ez form MQGE is applicable to federal employees beginning in 1983, and for certain state and local government employees beginning in 1986. 1o40 ez form For tax years 1991 and later, list the social security and Medicare wages separately. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form Payments based on laws that have a similar effect to those listed above also may qualify as payments made under a statute. 1o40 ez form Back pay awards, under some of the statutes listed above, may be compensation for personal injury and not pay for employment. 1o40 ez form Such awards are not wages for social security coverage purposes. 1o40 ez form 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. 1o40 ez form The payments made in such a settlement may still be back pay and wages under the rules discussed here. 1o40 ez form 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. 1o40 ez form Delayed wage payments and retroactive pay increases resulting from union negotiation or payments under local ordinances or regulations are back pay and are wages. 1o40 ez form However, they are not payments made under a statute. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form Under certain circumstances, back pay may be a special wage payment and excluded from wages counted under the social security earnings test. 1o40 ez form If you pay back pay to an employee age 61 or older, report it to the SSA in accordance with this section. 1o40 ez form Read Special Wage Payments, later, for additional reporting instructions. 1o40 ez form Questions If you have questions concerning back pay under a statute, call the SSA at 1-800-772-6270. 1o40 ez form Exception. 1o40 ez form   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. 1o40 ez form Table 1. 1o40 ez form 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. 1o40 ez form Sec. 1o40 ez form /Med. 1o40 ez form Wages Paid In Award Year (4)3 Allocation     Soc. 1o40 ez form Sec. 1o40 ez form Med. 1o40 ez form /MQGE Year Soc. 1o40 ez form Sec. 1o40 ez form Med. 1o40 ez form /MQGE xxx-xx-xxxx HELEN T. 1o40 ez form 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. 1o40 ez form EVANS 30,000 7/89-12/91 -0- -0- 1989 1990 1991   6,000 12,000 12,000 xxx-xx-xxxx ROLAND S. 1o40 ez form 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. 1o40 ez form  2Exclude the amount of back pay, if any, included in that amount. 1o40 ez form  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. 1o40 ez form The social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) must be shown separately FOR ALL YEARS. 1o40 ez form (Wages subject ONLY to MQGE would be shown in the Medicare/MQGE column; no wages would be shown in the Soc. 1o40 ez form Sec. 1o40 ez form column. 1o40 ez form ) For tax years 1991 and later, the social security and Medicare wages must be listed separately. 1o40 ez form Explanation of examples. 1o40 ez form Helen T. 1o40 ez form Smith–The back pay award, excluding interest, was $100,000 for the periods 1/2009-12/2012. 1o40 ez form In 2012, this employee was also paid $40,000 in other wages. 1o40 ez form (Her Form W-2 for 2012 reported $110,100 for social security and $140,000 for Medicare. 1o40 ez form The SSA allocation will result in adjusted posted wages of $68,000 for social security and $68,000 for Medicare for 2012. 1o40 ez form ) Sam W. 1o40 ez form Evans–The back pay award was $30,000 for the periods 7/89-12/91. 1o40 ez form This employee was hired in 1989 and was subject to MQGE only. 1o40 ez form He was no longer employed by this governmental employer in 2012. 1o40 ez form (His Form W-2 for 2012 reported $30,000 for social security and $30,000 for Medicare. 1o40 ez form After the SSA allocation, he will not have any net posted wages for 2012. 1o40 ez form ) Roland S. 1o40 ez form Adams–The back pay award was $15,000 for the periods 7/80-12/81. 1o40 ez form He was no longer employed by this state and local government (Section 218) employer in 2012. 1o40 ez form (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. 1o40 ez form ) 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. 1o40 ez form 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. 1o40 ez form Employers should report to the SSA special wage payments made to employees and former employees who are recipients of social security retirement benefits. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form Note. 1o40 ez form Payments made after retirement that are part of the normal payroll cycle should not be routinely reported as special wage payments. 1o40 ez form Earnings Test. 1o40 ez form   Benefits paid to a social security beneficiary under full retirement age may be reduced if the beneficiary continues to work. 1o40 ez form The SSA uses the information in boxes 1, 3, and 5 of Form W-2 to determine the beneficiary's current year earnings. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form Therefore, employer reports of special wage payments help prevent incorrect benefit reductions. 1o40 ez form Reporting Special Wage Payments Employers must report special wage payments for income tax purposes and social security and Medicare taxes in the year received. 1o40 ez form Report income, social security, and/or Medicare taxes for special wage payments on Form W-2. 1o40 ez form See Nonqualified Deferred Compensation and Section 457 Plans, later, for reporting nonqualified deferred compensation plan deferrals and payments on Form W-2. 1o40 ez form 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. 1o40 ez form Submit reports after the close of the tax year. 1o40 ez form To avoid delays in processing, submit reports in time to reach the SSA by April 1. 1o40 ez form Use one of the following reporting methods. 1o40 ez form Electronic reporting. 1o40 ez form   Special wage payment files can be sent electronically by logging onto Business Services Online (BSO) via the socialsecurity. 1o40 ez form gov website. 1o40 ez form BSO enables organizations and authorized individuals to conduct business with and submit confidential information to the Social Security Administration. 1o40 ez form You must register to use this website. 1o40 ez form The web address is www. 1o40 ez form socialsecurity. 1o40 ez form gov/bso/bsowelcome. 1o40 ez form htm. 1o40 ez form   Use the specifications and record layout shown in  Table 2, later. 1o40 ez form Only one file at a time may be submitted. 1o40 ez form If your file is large (>10MB), or you have a slow internet connection, the transmission will be faster if the file is zipped. 1o40 ez form A zipped file contains a file that has been compressed to reduce its file size. 1o40 ez form WinZip and PKZIP are examples of acceptable compression packages. 1o40 ez form   Electronic submissions not meeting the specifications in Table 2 will be rejected. 1o40 ez form Paper listing. 1o40 ez form   A paper listing can be used to report special wage payments to several employees. 1o40 ez form Use the format shown in Table 3, later. 1o40 ez form Submit paper listings to the local SSA office nearest your place of business. 1o40 ez form Visit www. 1o40 ez form socialsecurity. 1o40 ez form gov/locator to find a Social Security office near you. 1o40 ez form Form SSA-131. 1o40 ez form   Use Form SSA-131 to report special wage payments made to an employee. 1o40 ez form 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. 1o40 ez form    This image is too large to be displayed in the current screen. 1o40 ez form Please click the link to view the image. 1o40 ez form Publication 957 Reporting Back Pay to the Social Security Administration Instructions for Form SSA–131   EMPLOYER INSTRUCTIONS FOR COMPLETING SPECIAL WAGE PAYMENT FORM 1. 1o40 ez form Provide the EIN that was used or will be used to report the employee's wages on the Form W-2. 1o40 ez form 2. 1o40 ez form Enter the date the employee retired. 1o40 ez form Enter “Not Retired” if the employee has not retired. 1o40 ez form 3. 1o40 ez form 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. 1o40 ez form This date should be the same as or earlier than the date in item “2”. 1o40 ez form Enter “Not Retired” if the employee has not retired. 1o40 ez form 4. 1o40 ez form 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. 1o40 ez form  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. 1o40 ez form Accumulated sick payments which were paid in a lump sum based on “retirement” as the sole condition of payment. 1o40 ez form Accumulated sick payments paid at or after the date in item 3, which were earned in a year prior to the tax year. 1o40 ez form Payments “on account of retirement”–dismissal, severance or termination pay paid because of retirement. 1o40 ez form 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. 1o40 ez form Stock Options. 1o40 ez form   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”). 1o40 ez form That were reported or will be reported under “Nonqualified Plans” on the Form W-2. 1o40 ez form That were deducted from the employee's wages and paid to a deferred compensation plan (e. 1o40 ez form g. 1o40 ez form , 401k). 1o40 ez form Employees health and dental plan benefits (non-covered/non-taxable for Social Security Wages). 1o40 ez form Bonuses earned and paid in the tax year. 1o40 ez form 5. 1o40 ez form Check whether payments listed in item 4 will be made for years after the tax year. 1o40 ez form If yes, please show the amounts and years in which these will be paid, if known. 1o40 ez form 6. 1o40 ez form Nonqualified deferred compensation and section 457 plans only. 1o40 ez form 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. 1o40 ez form 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). 1o40 ez form Paperwork/Privacy Act Notice: This report is authorized by regulation 20 CFR 404. 1o40 ez form 702. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form We may also use the information you give us when we match records by computer. 1o40 ez form Matching programs compare our records with those of other Federal, State, or local government agencies. 1o40 ez form Many agencies may use matching programs to find or prove that a person qualifies for benefits paid by the Federal Government. 1o40 ez form The law allows us to do this even if you do not agree to it. 1o40 ez form Explanations about these and other reasons why information you provide us may be used or given out are available in Social Security Offices. 1o40 ez form If you want to learn more about this, contact any Social Security Office. 1o40 ez form The Paperwork Reduction Act: This information collection meets the clearance requirements of 44 U. 1o40 ez form S. 1o40 ez form C. 1o40 ez form §3507, as amended by Section 2 of the Paperwork Reduction Act of 1995. 1o40 ez form You are not required to answer these questions unless we display a valid Office of Management and Budget control number. 1o40 ez form We estimate that it will take you about 20 minutes to read the instructions, gather the necessary facts, and answer the questions. 1o40 ez form Form SSA-131 (8-2001) EF (06-2002)   Submit Form SSA-131 to the SSA office nearest your place of business. 1o40 ez form Or, the employee can submit it to the SSA office handling the claim. 1o40 ez form You or the employee must submit this form before the SSA can exclude the special wage payments for purposes of the earnings test. 1o40 ez form 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. 1o40 ez form Do not report payments from nonqualified deferred compensation or section 457 plans that were reported in box 11 of Form W-2. 1o40 ez form Use Form SSA-131 if deferrals to and payments from nonqualified or section 457 plans occurred during the tax year. 1o40 ez form 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. 1o40 ez form It should not count for the social security earnings test. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form Nonqualified and section 457 plans are reported differently than other special wage payments. 1o40 ez form See Reporting Amounts Deferred to Nonqualified and Section 457 Plans below for specific instructions. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form The plans' deferrals, or contributions, are not subject to social security and Medicare taxes until the period of substantial risk of forfeiture ends. 1o40 ez form No risk of forfeiture. 1o40 ez form   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. 1o40 ez form Example. 1o40 ez form Company X's nonqualified deferred compensation plan allows the deferral of up to $20,000 of employee salaries each year. 1o40 ez form The plan has no risk of forfeiture. 1o40 ez form In 2012, Employee A defers $20,000 to the plan from a total salary of $200,000. 1o40 ez form 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. 1o40 ez form   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. 1o40 ez form The accumulated deferrals are reported along with any other social security and Medicare wages earned during the year. 1o40 ez form   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. 1o40 ez form If the employee continues working, future deferrals are social security and Medicare wages when they are earned. 1o40 ez form    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. 1o40 ez form Risk of forfeiture lapses at retirement. 1o40 ez form   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. 1o40 ez form 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. 1o40 ez form   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. 1o40 ez form    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. 1o40 ez form Example—risk of forfeiture. 1o40 ez form 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. 1o40 ez form B's wages, including this year's deferred amount, are $80,000. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form Example. 1o40 ez form Employee D retired from the XYZ company and began receiving social security benefits. 1o40 ez form 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. 1o40 ez form In addition, D agreed to continue performing services for XYZ, but on a part-time basis for wages of $15,000 per year. 1o40 ez form D made no deferrals to the nonqualified plan this year. 1o40 ez form 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. 1o40 ez form For more information, see Reporting Special Wage Payments , earlier. 1o40 ez form 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). 1o40 ez form Report to the SSA on Form SSA-131 the total amount the employee earned during the tax year. 1o40 ez form 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. 1o40 ez form See Form SSA-131 and its instructions, earlier. 1o40 ez form Example. 1o40 ez form Employee K retired this year from Company XYZ and began receiving social security benefits. 1o40 ez form During the year he earned wages of $50,000 and deferred $35,000 of the wages into the company's nonqualified deferred compensation plan. 1o40 ez form K also received $75,000 in payments from the company's nonqualified plan. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form If you report section 409A deferrals, show the amount in box 12 of Form W-2 using code Y. 1o40 ez form For more information, see Notice 2008-115, 2008-52 I. 1o40 ez form R. 1o40 ez form B. 1o40 ez form 1367, available at www. 1o40 ez form irs. 1o40 ez form gov/irb/2008-52_IRB/ar10. 1o40 ez form html. 1o40 ez form Special reporting rules apply when an NQDC plan is not compliant with section 409A (when there has been a “plan failure”). 1o40 ez form Income included under section 409A from an NQDC plan is reported in box 1 and box 12 of Form W-2 using code Z. 1o40 ez form See Notice 2008-115. 1o40 ez form The following examples use small dollar amounts for illustrative purposes. 1o40 ez form 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). 1o40 ez form The term “vested” in the following examples means that the amount deferred is not subject to a substantial risk of forfeiture. 1o40 ez form Conversely, the term “not vested” means that the amount deferred is subject to a substantial risk of forfeiture. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form Example 1: Deferral that is immediately vested (no substantial risk of forfeiture) with no distributions and no vesting of prior-year deferrals. 1o40 ez form For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into her employer’s NQDC plan. 1o40 ez form The deferral of $20 was vested upon deferral and there was an employer match of $10 under the plan, which was also vested. 1o40 ez form Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10. 1o40 ez form 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). 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form Regular pay = $200; Deferral, not vested = $20; Employer match, not vested = $10. 1o40 ez form 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). 1o40 ez form 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. 1o40 ez form The deferral of $20 was vested upon deferral. 1o40 ez form During the year, $100 of prior-year deferrals and $15 of investment earnings on the $100 of prior-year deferrals became vested. 1o40 ez form Regular pay = $200; Deferral, vested = $20; Vesting of prior-year deferrals = $100; Vesting of investment earnings on $100 of prior-year deferral = $15. 1o40 ez form 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). 1o40 ez form For the year, the employee’s regular pay was $100, and the employee deferred no pay into the employer’s NQDC plan. 1o40 ez form There was no vesting of prior-year deferrals under the plan. 1o40 ez form During the year, there were total distributions of $50 from the plan to the employee. 1o40 ez form Regular pay = $100; Distribution = $50. 1o40 ez form 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). 1o40 ez form   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. 1o40 ez form Instead, report on Form SSA-131 the total amount the employee earned during the year. 1o40 ez form * Submit the SSA-131 to the nearest SSA office or give it to the employee. 1o40 ez form   *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. 1o40 ez form Do not consider prior-year deferrals that are vesting in the current year. 1o40 ez form If there was a plan failure, the box 1 amount in this calculation should be as if there were no plan failure. 1o40 ez form Example 5: Deferral that is immediately vested and there are distributions (no vesting of prior-year deferrals). 1o40 ez form For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1o40 ez form There was also an employer match of $10. 1o40 ez form The deferral and employer match were vested upon deferral. 1o40 ez form There was no vesting of prior-year deferrals under the plan. 1o40 ez form During the year, there were total distributions of $50 from the plan to the employee. 1o40 ez form Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10; Distribution = $50. 1o40 ez form 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. 1o40 ez form 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). 1o40 ez form For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1o40 ez form The deferral was not vested upon deferral. 1o40 ez form There was no vesting of prior-year deferrals under the plan. 1o40 ez form During the year, there were total distributions of $50 from the plan to the employee. 1o40 ez form Regular pay = $200; Deferral, not vested = $20; Distribution = $50. 1o40 ez form 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). 1o40 ez form 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). 1o40 ez form For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1o40 ez form The deferral was vested upon deferral. 1o40 ez form There was vesting of $100 of prior-year deferrals and $15 of earnings on the $100 prior-year deferral under the plan. 1o40 ez form During the year, there were total distributions of $50 from the plan to the employee. 1o40 ez form Regular pay = $200; Deferral, vested = $20; Distribution = $50; Vesting of prior-year deferrals ($100) and earnings on those prior-year deferrals ($15) = $115. 1o40 ez form 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. 1o40 ez form 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). 1o40 ez form For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1o40 ez form The deferral was not vested upon deferral. 1o40 ez form There was also vesting of prior-year deferrals and employer matches and earnings on these amounts under the plan ($115). 1o40 ez form During the year, there were total distributions of $50 from the plan to the employee. 1o40 ez form 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. 1o40 ez form 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. 1o40 ez form File Form SSA-131 -0-     Form SSA-131 Completion Item 6 ($230 Amount from Box 1 of Form W-2 minus $50 Distribution) $180 Table 2. 1o40 ez form Specifications for Electronic Reporting of Special Wage Payments Record Position  Field Size   Description Start End 1 3 3 Record Type—must include only the capital letters “SWP” 4 12 9 SSN—must be numeric and may not be all zeros 13 27 15 Last Name—all capitals and no punctuation; may have blanks on right only 28 38 11 First Name—all capitals and no punctuation; may have blanks on right only 39 39 1 Middle Initial—must be either a capital letter or blank 40 48 9 EIN—must be numeric and may not be all zeros 49 59 11 Payment—must be numeric; may not be all zeros; last two digits on right are assumed to be cents; no period or dollar sign 60 63 4 Payment Year—must be only a four-digit year 64 66 3 SSA Office Code—must be numeric and may be all zeros 67 67 1 Payment Type Code—must be the capital letter “T” 68 117 50 Filler  The record format is a fixed length of 117. 1o40 ez form  The file format is ASCII. 1o40 ez form  Submit only one file at a time. 1o40 ez form   Table 3. 1o40 ez form Sample—Paper Listing for Reporting Special Wage Payments to Several Employees Report of Special Wage PaymentsTax Year: Page of A. 1o40 ez form Employer Name: EIN:   Address: Contact Name:     Phone: ( )   . 1o40 ez form 1) B. 1o40 ez form Employee Name: (Last) (First) (MI)   C. 1o40 ez form SSN: D. 1o40 ez form SWP:$ E. 1o40 ez form Type: Other: 2) B. 1o40 ez form Employee Name: (Last) (First) (MI)   C. 1o40 ez form SSN: D. 1o40 ez form SWP:$ E. 1o40 ez form Type: Other: 3) B. 1o40 ez form Employee Name: (Last) (First) (MI)   C. 1o40 ez form SSN: D. 1o40 ez form SWP:$ E. 1o40 ez form Type: Other: 4) B. 1o40 ez form Employee Name: (Last) (First) (MI)   C. 1o40 ez form SSN: D. 1o40 ez form SWP:$ E. 1o40 ez form Type: Other: 5) B. 1o40 ez form Employee Name: (Last) (First) (MI)   C. 1o40 ez form SSN: D. 1o40 ez form SWP:$ E. 1o40 ez form Type: Other:     INSTRUCTIONS:   Enter tax year and page number. 1o40 ez form   A. 1o40 ez form 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. 1o40 ez form   B. 1o40 ez form Employee's name. 1o40 ez form   C. 1o40 ez form Employee's social security number (SSN). 1o40 ez form   D. 1o40 ez form Total amount of special wage payments made to the employee. 1o40 ez form   E. 1o40 ez form 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. 1o40 ez form   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. 1o40 ez form (Get Form SSA-131. 1o40 ez form )                 Prev  Up  Next   Home   More Online Publications