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Irs Forms Instructions 1040ez

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Irs Forms Instructions 1040ez

Irs forms instructions 1040ez Publication 584 - Additional Material Table of Contents This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Entrance Hall This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Living Room This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Dining Room This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Kitchen This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Den This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Bedrooms This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Bathrooms This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Recreation Room This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Laundry and Basement This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Garage This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Sporting Equipment This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Men's Clothing This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Women's Clothing This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Children's Clothing This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Jewelry This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Electrical Appliances This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Linens This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Miscellaneous This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Motor Vehicles Schedule 20. Irs forms instructions 1040ez Home (Excluding Contents) Note. Irs forms instructions 1040ez If you used the entire property as your home, fill out only column (a). Irs forms instructions 1040ez If you used part of the property as your home and part of it for business or to produce rental income, you must allocate the entries on lines 2-9 between the personal part (column (a)) and the business/rental part (column (b)). Irs forms instructions 1040ez 1. Irs forms instructions 1040ez Description of property (Show location and date acquired. Irs forms instructions 1040ez )     (a)  Personal Part (b)  Business/Rental Part 2. Irs forms instructions 1040ez Cost or other (adjusted) basis of property (from Worksheet A)     3. Irs forms instructions 1040ez Insurance or other reimbursement Note. Irs forms instructions 1040ez If line 2 is more than line 3, skip line 4. Irs forms instructions 1040ez If line 3 is more than line 2, you exclude gain, and the gain is more than you can exclude, see the instructions for line 3 in the Instructions for Form 4684 for the amount to enter. Irs forms instructions 1040ez     4. Irs forms instructions 1040ez Gain from casualty. Irs forms instructions 1040ez If line 3 is more than line 2, enter the difference here and skip lines 5 through 9. Irs forms instructions 1040ez But see Next below line 9. Irs forms instructions 1040ez     5. Irs forms instructions 1040ez Fair market value before casualty     6. Irs forms instructions 1040ez Fair market value after casualty     7. Irs forms instructions 1040ez Decrease in fair market value. Irs forms instructions 1040ez Subtract line 6 from line 5. Irs forms instructions 1040ez     8. Irs forms instructions 1040ez Enter the smaller of line 2 or line 7 Note for business/rental part. Irs forms instructions 1040ez If the property was totally destroyed by casualty, enter on line 8, column (b) the amount from line 2, column (b). Irs forms instructions 1040ez     9. Irs forms instructions 1040ez Subtract line 3 from line 8. Irs forms instructions 1040ez If zero or less, enter -0-. Irs forms instructions 1040ez     Next: Transfer the entries from line 1 and lines 2-9, column (a), above to the corresponding lines on Form 4684, Section A. Irs forms instructions 1040ez Transfer the entries from line 1 and lines 2-9, column (b), to the corresponding lines on Form 4684, Section B. Irs forms instructions 1040ez Worksheet A. Irs forms instructions 1040ez Cost or Other (Adjusted) Basis Caution. Irs forms instructions 1040ez See the Worksheet A Instructions before you use this worksheet. Irs forms instructions 1040ez         (a) Personal Part (b) Business/Rental Part 1. Irs forms instructions 1040ez   Enter the purchase price of the home damaged or destroyed. Irs forms instructions 1040ez (If you filed Form 2119 when you originally acquired that home to postpone gain on the sale of a previous home before May 7, 1997, enter the adjusted basis of the new home from that Form 2119. Irs forms instructions 1040ez ) 1. Irs forms instructions 1040ez     2. Irs forms instructions 1040ez   Seller paid points for home bought after 1990. Irs forms instructions 1040ez Do not include any seller-paid points you already subtracted to arrive at the amount entered on line 1 2. Irs forms instructions 1040ez     3. Irs forms instructions 1040ez   Subtract line 2 from line 1 3. Irs forms instructions 1040ez     4. Irs forms instructions 1040ez   Settlement fees or closing costs. Irs forms instructions 1040ez (See Settlement costs in Publication 551. Irs forms instructions 1040ez ) If line 1 includes the adjusted basis of the new home from Form 2119, skip lines 4a-4g and 5; go to line 6. Irs forms instructions 1040ez         a. Irs forms instructions 1040ez Abstract and recording fees 4a. Irs forms instructions 1040ez       b. Irs forms instructions 1040ez Legal fees (including fees for title search and preparing documents) 4b. Irs forms instructions 1040ez       c. Irs forms instructions 1040ez Survey fees 4c. Irs forms instructions 1040ez       d. Irs forms instructions 1040ez Title insurance 4d. Irs forms instructions 1040ez       e. Irs forms instructions 1040ez Transfer or stamp taxes 4e. Irs forms instructions 1040ez       f. Irs forms instructions 1040ez Amounts that the seller owed that you agreed to pay (back taxes or interest, recording or mortgage fees, and sales commissions) 4f. Irs forms instructions 1040ez       g. Irs forms instructions 1040ez Other 4g. Irs forms instructions 1040ez     5. Irs forms instructions 1040ez   Add lines 4a through 4g 5. Irs forms instructions 1040ez     6. Irs forms instructions 1040ez   Cost of additions and improvements. Irs forms instructions 1040ez (See Increases to Basis in Publication 551. Irs forms instructions 1040ez ) Do not include any additions and improvements included on line 1 6. Irs forms instructions 1040ez     7. Irs forms instructions 1040ez   Special tax assessments paid for local improvements, such as streets and sidewalks 7. Irs forms instructions 1040ez     8. Irs forms instructions 1040ez   Other increases to basis 8. Irs forms instructions 1040ez     9. Irs forms instructions 1040ez   Add lines 3, 5, 6, 7, and 8 9. Irs forms instructions 1040ez     10. Irs forms instructions 1040ez   Depreciation allowed or allowable, related to the business use or rental of the home 10. Irs forms instructions 1040ez 0   11. Irs forms instructions 1040ez   Other decreases to basis (See Decreases to Basis in Publication 551. Irs forms instructions 1040ez ) 11. Irs forms instructions 1040ez     12. Irs forms instructions 1040ez   Add lines 10 and 11 12. Irs forms instructions 1040ez     13. Irs forms instructions 1040ez   Cost or other (adjusted) basis of home damaged or destroyed. Irs forms instructions 1040ez Subtract line 12 from line 9. Irs forms instructions 1040ez Enter here and on Schedule 20, line 2 13. Irs forms instructions 1040ez     Worksheet A Instructions. Irs forms instructions 1040ez If you use Worksheet A to figure the cost or other (adjusted) basis of your home, follow these instructions. Irs forms instructions 1040ez DO NOT use this worksheet to determine your basis if you acquired an interest in your home from a decedent who died in 2010 and whose executor filed Form 8939. Irs forms instructions 1040ez IF. Irs forms instructions 1040ez . Irs forms instructions 1040ez . Irs forms instructions 1040ez   THEN. Irs forms instructions 1040ez . Irs forms instructions 1040ez . Irs forms instructions 1040ez you inherited your home from a decedent who died either before or after 2010 or from a decedent who died in 2010 and whose executor did not file Form 8939. Irs forms instructions 1040ez 1 skip lines 1–4 of the worksheet. Irs forms instructions 1040ez 2 find your basis using the rules under Inherited Property in Publication 551. Irs forms instructions 1040ez Enter this amount on line 5 of the worksheet. Irs forms instructions 1040ez 3 fill out lines 6–13 of the worksheet. Irs forms instructions 1040ez you received your home as a gift 1 read Property Received as a Gift in Publication 551 and enter on lines 1 and 3 of the worksheet either the donor's adjusted basis or the home's fair market value at the time of the gift, whichever is appropriate. Irs forms instructions 1040ez 2 if you can add any federal gift tax to your basis, enter that amount on line 5 of the worksheet. Irs forms instructions 1040ez 3 fill out the rest of the worksheet. Irs forms instructions 1040ez you received your home as a trade for other property 1 enter on line 1 of the worksheet the fair market value of the other property at the time of the trade. Irs forms instructions 1040ez (But if you received your home as a trade for your previous home before May 7, 1997, and had a gain on the trade that you postponed using Form 2119, enter on line 1 of the worksheet the adjusted basis of the new home from that Form 2119. Irs forms instructions 1040ez ) 2 fill out the rest of the worksheet. Irs forms instructions 1040ez you built your home 1 add the purchase price of the land and the cost of building the home. Irs forms instructions 1040ez Enter that total on line 1 of the worksheet. Irs forms instructions 1040ez (However, if you filed a Form 2119 to postpone gain on the sale of a previous home before May 7, 1997, enter on line 1 of the worksheet the adjusted basis of the new home from that Form 2119. Irs forms instructions 1040ez ) 2 fill out the rest of the worksheet. Irs forms instructions 1040ez you received your home from your spouse after July 18, 1984 1 skip lines 1–4 of the worksheet. Irs forms instructions 1040ez 2 enter on line 5 of the worksheet your spouse's cost or other (adjusted) basis in the home just before you received it. Irs forms instructions 1040ez 3 fill out lines 6–13 of the worksheet, making adjustments to basis only for events after the transfer. Irs forms instructions 1040ez you owned a home jointly with your spouse, who transferred his or her interest in the home to you after July 18, 1984     fill out one worksheet, making adjustments to basis for events both before and after the transfer. Irs forms instructions 1040ez   you received your home from your spouse before July 19, 1984 1 skip lines 1–4 of the worksheet. Irs forms instructions 1040ez 2 enter on line 5 of the worksheet the home's fair market value at the time you received it. Irs forms instructions 1040ez 3 fill out lines 6–13 of the worksheet, making adjustments to basis only for events after the transfer. Irs forms instructions 1040ez you owned a home jointly with your spouse, and your spouse transferred his or her interest in the home to you before July 19, 1984 1 fill out a worksheet, lines 1–13, making adjustments to basis only for events before the transfer. Irs forms instructions 1040ez 2 multiply the amount on line 13 of that worksheet by 50% (0. Irs forms instructions 1040ez 50) to get the adjusted basis of your half-interest at the time of the transfer. Irs forms instructions 1040ez 3 multiply the fair market value of the home at the time of the transfer by 50% (0. Irs forms instructions 1040ez 50). Irs forms instructions 1040ez Generally, this is the basis of the half-interest that your spouse owned. Irs forms instructions 1040ez 4 add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet. Irs forms instructions 1040ez 5 complete lines 6–13 of the second worksheet, making adjustments to basis only for events after the transfer. Irs forms instructions 1040ez you owned your home jointly with a nonspouse 1 fill out lines 1–13 of the worksheet. Irs forms instructions 1040ez 2 multiply the amount on line 13 by your percentage of ownership to get the adjusted basis of your part-interest. Irs forms instructions 1040ez Worksheet A Instructions. Irs forms instructions 1040ez (Continued) IF. Irs forms instructions 1040ez . Irs forms instructions 1040ez . Irs forms instructions 1040ez   THEN. Irs forms instructions 1040ez . Irs forms instructions 1040ez . Irs forms instructions 1040ez you owned your home jointly with your spouse who died before 2010 and before the casualty 1 fill out a worksheet, lines 1–13, including adjustments to basis only for events before your spouse's death. Irs forms instructions 1040ez 2 multiply the amount on line 13 of that worksheet by 50% (0. Irs forms instructions 1040ez 50) to get the adjusted basis of your half-interest on the date of death. Irs forms instructions 1040ez 3 figure the basis for the half-interest owned by your spouse. Irs forms instructions 1040ez This is one-half of the fair market value on the date of death (or later alternate valuation used for estate or inheritance tax). Irs forms instructions 1040ez (The basis in your half will remain one-half of the adjusted basis determined in step 2. Irs forms instructions 1040ez ) 4 add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet. Irs forms instructions 1040ez 5 complete lines 6–13 of the second worksheet, making adjustments to basis only for events after your spouse's death. Irs forms instructions 1040ez you owned your home jointly with your spouse who died before 2010 and before the casualty, and your permanent legal home is in a community property state 1 skip lines 1–4 of the worksheet. Irs forms instructions 1040ez 2 enter the amount of your basis on line 5 of the worksheet. Irs forms instructions 1040ez Generally, this is the fair market value of the home at the time of death. Irs forms instructions 1040ez (But see Community Property in Publication 551 for special rules. Irs forms instructions 1040ez ) 3 fill out lines 6–13 of the worksheet, making adjustments to basis only for events after your spouse's death. Irs forms instructions 1040ez you owned your home jointly with a nonspouse who died before 2010 and before the casualty 1 fill out lines 1–13 of the worksheet, including adjustments to basis only for events before the co-owner's death. Irs forms instructions 1040ez 2 multiply the amount on line 13 by your percentage of ownership to get the adjusted basis of your part-interest on the date of death. Irs forms instructions 1040ez 3 multiply the fair market value on the date of death (or later alternate valuation used for estate or inheritance tax) by the co-owner's percentage of ownership. Irs forms instructions 1040ez This is the basis for the co-owner's part-interest. Irs forms instructions 1040ez 4 add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet. Irs forms instructions 1040ez 5 complete lines 6–13 of the second worksheet, including adjustments to basis only for events after the co-owner's death. Irs forms instructions 1040ez your home was ever damaged as a result of a prior casualty 1 on line 8 of the worksheet, enter any amounts you spent to restore the home to its condition before the prior casualty. Irs forms instructions 1040ez 2 on line 11 enter: any insurance reimbursements you received (or expect to receive) for the prior loss,  and any deductible casualty losses from prior years not covered by insurance. Irs forms instructions 1040ez the person who sold you your home paid points on your loan and you bought your home after 1990 but before April 4, 1994. Irs forms instructions 1040ez   on line 2 enter the seller-paid points only if you deducted them as home mortgage interest in the year paid (unless you used the seller-paid points to reduce the amount on line 1). Irs forms instructions 1040ez the person who sold you your home paid points on your loan and you bought your home after April 3, 1994   on line 2 enter the seller-paid points even if you did not deduct them (unless you used the seller-paid points to reduce the amount on line 1). Irs forms instructions 1040ez you used part of the property as your home and part of it for business or to produce rental income   you must allocate the entries on Worksheet A between the personal part (column (a)) and the business/rental part (column (b)). Irs forms instructions 1040ez none of these items apply   fill out the entire worksheet. Irs forms instructions 1040ez Prev  Up  Next   Home   More Online Publications
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Letter 757C Frequently Asked Questions (FAQs)

What is the letter telling me?

You failed to meet the terms of your established Installment Agreement by making the specified payment amount on the established due date.

What do I have to do?

You may call the toll free number in this letter. The person who answers the phone will assist you.

How much time do I have?

You should contact us or pay your balance due as soon as possible.

What happens if I don't take any action?

Since you failed to meet the terms of the agreement we could proceed to enforce collection action by filing a levy on your bank account or wages or file a lien on your personal property.

Who should I contact?

You should call the phone number provided in the letter as soon as possible.

What if I don't agree or have already taken corrective action?

Call us immediately at the number provided in the letter.

Page Last Reviewed or Updated: 30-Jan-2014

The Irs Forms Instructions 1040ez

Irs forms instructions 1040ez Publication 957 - Main Content Table of Contents 1. Irs forms instructions 1040ez What is Back Pay?Reporting Back Pay Back Pay Under a Statute Nonstatutory Back Pay Format for Report to the SSA Questions 2. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez 1. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Damages for personal injury, interest, penalties, and legal fees included with back pay awards are not wages. Irs forms instructions 1040ez Report all back pay. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez See Back Pay Under a Statute , later, for more information. Irs forms instructions 1040ez Reporting Back Pay The Internal Revenue Service (IRS) and the SSA consider back pay awards to be wages. Irs forms instructions 1040ez However, for income tax purposes, the IRS treats all back pay as wages in the year paid. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez The SSA no longer accepts reports on tapes, cartridges, and diskettes. Irs forms instructions 1040ez Example. Irs forms instructions 1040ez In 2012, Terry Morris earned wages of $50,000. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Her employer properly reflected social security wages of $110,100 and Medicare wages of $150,000 on her 2012 Form W-2. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Example. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez SSA treatment of back pay under a statute. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez Then, the SSA can allocate the statutory back pay to the appropriate periods. Irs forms instructions 1040ez   If a back pay award is not made under a statute, the SSA credits back pay as wages in the year paid. Irs forms instructions 1040ez    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. Irs forms instructions 1040ez    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. Irs forms instructions 1040ez No further action is necessary. Irs forms instructions 1040ez Example. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Her employer properly reported wages of $32,000 for social security and Medicare on her 2012 Form W-2. Irs forms instructions 1040ez No further action is necessary. Irs forms instructions 1040ez Information the SSA needs to properly credit back pay under a statute (special report). Irs forms instructions 1040ez   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. Irs forms instructions 1040ez There is no statute of limitations on the filing of the special report to enable the SSA to allocate the wages. Irs forms instructions 1040ez The special report must include the following information. Irs forms instructions 1040ez The employer's name, address, and employer identification number (EIN). Irs forms instructions 1040ez A signed statement citing the federal or state statute under which the payment was made. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez The name and telephone number of a person to contact. Irs forms instructions 1040ez The SSA may have additional questions concerning the back pay case or the individual employee's information. Irs forms instructions 1040ez A list of employees receiving the payment and the following information for each employee: The tax year you paid and reported the back pay. Irs forms instructions 1040ez The employee's social security number (SSN). Irs forms instructions 1040ez The employee's name (as shown on his or her social security card). Irs forms instructions 1040ez The amount of the back pay award excluding any amounts specifically designated otherwise, for example, damages for personal injury, interest, penalties, and legal fees. Irs forms instructions 1040ez The period(s) the back pay award covers (beginning and ending dates—month and year). Irs forms instructions 1040ez 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)*. Irs forms instructions 1040ez Do not include the back pay award shown in that wage report. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez The amount to allocate to each reporting period*. Irs forms instructions 1040ez This includes any amount you want allocated (if applicable) to the tax year of the award payment. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez *Note. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez For all tax years, show and identify the social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) separately. Irs forms instructions 1040ez MQGE is applicable to federal employees beginning in 1983, and for certain state and local government employees beginning in 1986. Irs forms instructions 1040ez For tax years 1991 and later, list the social security and Medicare wages separately. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Payments based on laws that have a similar effect to those listed above also may qualify as payments made under a statute. Irs forms instructions 1040ez Back pay awards, under some of the statutes listed above, may be compensation for personal injury and not pay for employment. Irs forms instructions 1040ez Such awards are not wages for social security coverage purposes. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez The payments made in such a settlement may still be back pay and wages under the rules discussed here. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Delayed wage payments and retroactive pay increases resulting from union negotiation or payments under local ordinances or regulations are back pay and are wages. Irs forms instructions 1040ez However, they are not payments made under a statute. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Under certain circumstances, back pay may be a special wage payment and excluded from wages counted under the social security earnings test. Irs forms instructions 1040ez If you pay back pay to an employee age 61 or older, report it to the SSA in accordance with this section. Irs forms instructions 1040ez Read Special Wage Payments, later, for additional reporting instructions. Irs forms instructions 1040ez Questions If you have questions concerning back pay under a statute, call the SSA at 1-800-772-6270. Irs forms instructions 1040ez Exception. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez Table 1. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Sec. Irs forms instructions 1040ez /Med. Irs forms instructions 1040ez Wages Paid In Award Year (4)3 Allocation     Soc. Irs forms instructions 1040ez Sec. Irs forms instructions 1040ez Med. Irs forms instructions 1040ez /MQGE Year Soc. Irs forms instructions 1040ez Sec. Irs forms instructions 1040ez Med. Irs forms instructions 1040ez /MQGE xxx-xx-xxxx HELEN T. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez EVANS 30,000 7/89-12/91 -0- -0- 1989 1990 1991   6,000 12,000 12,000 xxx-xx-xxxx ROLAND S. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez  2Exclude the amount of back pay, if any, included in that amount. Irs forms instructions 1040ez  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. Irs forms instructions 1040ez The social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) must be shown separately FOR ALL YEARS. Irs forms instructions 1040ez (Wages subject ONLY to MQGE would be shown in the Medicare/MQGE column; no wages would be shown in the Soc. Irs forms instructions 1040ez Sec. Irs forms instructions 1040ez column. Irs forms instructions 1040ez ) For tax years 1991 and later, the social security and Medicare wages must be listed separately. Irs forms instructions 1040ez Explanation of examples. Irs forms instructions 1040ez Helen T. Irs forms instructions 1040ez Smith–The back pay award, excluding interest, was $100,000 for the periods 1/2009-12/2012. Irs forms instructions 1040ez In 2012, this employee was also paid $40,000 in other wages. Irs forms instructions 1040ez (Her Form W-2 for 2012 reported $110,100 for social security and $140,000 for Medicare. Irs forms instructions 1040ez The SSA allocation will result in adjusted posted wages of $68,000 for social security and $68,000 for Medicare for 2012. Irs forms instructions 1040ez ) Sam W. Irs forms instructions 1040ez Evans–The back pay award was $30,000 for the periods 7/89-12/91. Irs forms instructions 1040ez This employee was hired in 1989 and was subject to MQGE only. Irs forms instructions 1040ez He was no longer employed by this governmental employer in 2012. Irs forms instructions 1040ez (His Form W-2 for 2012 reported $30,000 for social security and $30,000 for Medicare. Irs forms instructions 1040ez After the SSA allocation, he will not have any net posted wages for 2012. Irs forms instructions 1040ez ) Roland S. Irs forms instructions 1040ez Adams–The back pay award was $15,000 for the periods 7/80-12/81. Irs forms instructions 1040ez He was no longer employed by this state and local government (Section 218) employer in 2012. Irs forms instructions 1040ez (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. Irs forms instructions 1040ez ) 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Employers should report to the SSA special wage payments made to employees and former employees who are recipients of social security retirement benefits. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Note. Irs forms instructions 1040ez Payments made after retirement that are part of the normal payroll cycle should not be routinely reported as special wage payments. Irs forms instructions 1040ez Earnings Test. Irs forms instructions 1040ez   Benefits paid to a social security beneficiary under full retirement age may be reduced if the beneficiary continues to work. Irs forms instructions 1040ez The SSA uses the information in boxes 1, 3, and 5 of Form W-2 to determine the beneficiary's current year earnings. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Therefore, employer reports of special wage payments help prevent incorrect benefit reductions. Irs forms instructions 1040ez Reporting Special Wage Payments Employers must report special wage payments for income tax purposes and social security and Medicare taxes in the year received. Irs forms instructions 1040ez Report income, social security, and/or Medicare taxes for special wage payments on Form W-2. Irs forms instructions 1040ez See Nonqualified Deferred Compensation and Section 457 Plans, later, for reporting nonqualified deferred compensation plan deferrals and payments on Form W-2. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Submit reports after the close of the tax year. Irs forms instructions 1040ez To avoid delays in processing, submit reports in time to reach the SSA by April 1. Irs forms instructions 1040ez Use one of the following reporting methods. Irs forms instructions 1040ez Electronic reporting. Irs forms instructions 1040ez   Special wage payment files can be sent electronically by logging onto Business Services Online (BSO) via the socialsecurity. Irs forms instructions 1040ez gov website. Irs forms instructions 1040ez BSO enables organizations and authorized individuals to conduct business with and submit confidential information to the Social Security Administration. Irs forms instructions 1040ez You must register to use this website. Irs forms instructions 1040ez The web address is www. Irs forms instructions 1040ez socialsecurity. Irs forms instructions 1040ez gov/bso/bsowelcome. Irs forms instructions 1040ez htm. Irs forms instructions 1040ez   Use the specifications and record layout shown in  Table 2, later. Irs forms instructions 1040ez Only one file at a time may be submitted. Irs forms instructions 1040ez If your file is large (>10MB), or you have a slow internet connection, the transmission will be faster if the file is zipped. Irs forms instructions 1040ez A zipped file contains a file that has been compressed to reduce its file size. Irs forms instructions 1040ez WinZip and PKZIP are examples of acceptable compression packages. Irs forms instructions 1040ez   Electronic submissions not meeting the specifications in Table 2 will be rejected. Irs forms instructions 1040ez Paper listing. Irs forms instructions 1040ez   A paper listing can be used to report special wage payments to several employees. Irs forms instructions 1040ez Use the format shown in Table 3, later. Irs forms instructions 1040ez Submit paper listings to the local SSA office nearest your place of business. Irs forms instructions 1040ez Visit www. Irs forms instructions 1040ez socialsecurity. Irs forms instructions 1040ez gov/locator to find a Social Security office near you. Irs forms instructions 1040ez Form SSA-131. Irs forms instructions 1040ez   Use Form SSA-131 to report special wage payments made to an employee. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez    This image is too large to be displayed in the current screen. Irs forms instructions 1040ez Please click the link to view the image. Irs forms instructions 1040ez Publication 957 Reporting Back Pay to the Social Security Administration Instructions for Form SSA–131   EMPLOYER INSTRUCTIONS FOR COMPLETING SPECIAL WAGE PAYMENT FORM 1. Irs forms instructions 1040ez Provide the EIN that was used or will be used to report the employee's wages on the Form W-2. Irs forms instructions 1040ez 2. Irs forms instructions 1040ez Enter the date the employee retired. Irs forms instructions 1040ez Enter “Not Retired” if the employee has not retired. Irs forms instructions 1040ez 3. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez This date should be the same as or earlier than the date in item “2”. Irs forms instructions 1040ez Enter “Not Retired” if the employee has not retired. Irs forms instructions 1040ez 4. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez  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. Irs forms instructions 1040ez Accumulated sick payments which were paid in a lump sum based on “retirement” as the sole condition of payment. Irs forms instructions 1040ez Accumulated sick payments paid at or after the date in item 3, which were earned in a year prior to the tax year. Irs forms instructions 1040ez Payments “on account of retirement”–dismissal, severance or termination pay paid because of retirement. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Stock Options. Irs forms instructions 1040ez   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”). Irs forms instructions 1040ez That were reported or will be reported under “Nonqualified Plans” on the Form W-2. Irs forms instructions 1040ez That were deducted from the employee's wages and paid to a deferred compensation plan (e. Irs forms instructions 1040ez g. Irs forms instructions 1040ez , 401k). Irs forms instructions 1040ez Employees health and dental plan benefits (non-covered/non-taxable for Social Security Wages). Irs forms instructions 1040ez Bonuses earned and paid in the tax year. Irs forms instructions 1040ez 5. Irs forms instructions 1040ez Check whether payments listed in item 4 will be made for years after the tax year. Irs forms instructions 1040ez If yes, please show the amounts and years in which these will be paid, if known. Irs forms instructions 1040ez 6. Irs forms instructions 1040ez Nonqualified deferred compensation and section 457 plans only. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez Paperwork/Privacy Act Notice: This report is authorized by regulation 20 CFR 404. Irs forms instructions 1040ez 702. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez We may also use the information you give us when we match records by computer. Irs forms instructions 1040ez Matching programs compare our records with those of other Federal, State, or local government agencies. Irs forms instructions 1040ez Many agencies may use matching programs to find or prove that a person qualifies for benefits paid by the Federal Government. Irs forms instructions 1040ez The law allows us to do this even if you do not agree to it. Irs forms instructions 1040ez Explanations about these and other reasons why information you provide us may be used or given out are available in Social Security Offices. Irs forms instructions 1040ez If you want to learn more about this, contact any Social Security Office. Irs forms instructions 1040ez The Paperwork Reduction Act: This information collection meets the clearance requirements of 44 U. Irs forms instructions 1040ez S. Irs forms instructions 1040ez C. Irs forms instructions 1040ez §3507, as amended by Section 2 of the Paperwork Reduction Act of 1995. Irs forms instructions 1040ez You are not required to answer these questions unless we display a valid Office of Management and Budget control number. Irs forms instructions 1040ez We estimate that it will take you about 20 minutes to read the instructions, gather the necessary facts, and answer the questions. Irs forms instructions 1040ez Form SSA-131 (8-2001) EF (06-2002)   Submit Form SSA-131 to the SSA office nearest your place of business. Irs forms instructions 1040ez Or, the employee can submit it to the SSA office handling the claim. Irs forms instructions 1040ez You or the employee must submit this form before the SSA can exclude the special wage payments for purposes of the earnings test. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Do not report payments from nonqualified deferred compensation or section 457 plans that were reported in box 11 of Form W-2. Irs forms instructions 1040ez Use Form SSA-131 if deferrals to and payments from nonqualified or section 457 plans occurred during the tax year. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez It should not count for the social security earnings test. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Nonqualified and section 457 plans are reported differently than other special wage payments. Irs forms instructions 1040ez See Reporting Amounts Deferred to Nonqualified and Section 457 Plans below for specific instructions. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez The plans' deferrals, or contributions, are not subject to social security and Medicare taxes until the period of substantial risk of forfeiture ends. Irs forms instructions 1040ez No risk of forfeiture. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez Example. Irs forms instructions 1040ez Company X's nonqualified deferred compensation plan allows the deferral of up to $20,000 of employee salaries each year. Irs forms instructions 1040ez The plan has no risk of forfeiture. Irs forms instructions 1040ez In 2012, Employee A defers $20,000 to the plan from a total salary of $200,000. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez The accumulated deferrals are reported along with any other social security and Medicare wages earned during the year. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez If the employee continues working, future deferrals are social security and Medicare wages when they are earned. Irs forms instructions 1040ez    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. Irs forms instructions 1040ez Risk of forfeiture lapses at retirement. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. Irs forms instructions 1040ez Example—risk of forfeiture. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez B's wages, including this year's deferred amount, are $80,000. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Example. Irs forms instructions 1040ez Employee D retired from the XYZ company and began receiving social security benefits. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez In addition, D agreed to continue performing services for XYZ, but on a part-time basis for wages of $15,000 per year. Irs forms instructions 1040ez D made no deferrals to the nonqualified plan this year. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez For more information, see Reporting Special Wage Payments , earlier. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez Report to the SSA on Form SSA-131 the total amount the employee earned during the tax year. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez See Form SSA-131 and its instructions, earlier. Irs forms instructions 1040ez Example. Irs forms instructions 1040ez Employee K retired this year from Company XYZ and began receiving social security benefits. Irs forms instructions 1040ez During the year he earned wages of $50,000 and deferred $35,000 of the wages into the company's nonqualified deferred compensation plan. Irs forms instructions 1040ez K also received $75,000 in payments from the company's nonqualified plan. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez If you report section 409A deferrals, show the amount in box 12 of Form W-2 using code Y. Irs forms instructions 1040ez For more information, see Notice 2008-115, 2008-52 I. Irs forms instructions 1040ez R. Irs forms instructions 1040ez B. Irs forms instructions 1040ez 1367, available at www. Irs forms instructions 1040ez irs. Irs forms instructions 1040ez gov/irb/2008-52_IRB/ar10. Irs forms instructions 1040ez html. Irs forms instructions 1040ez Special reporting rules apply when an NQDC plan is not compliant with section 409A (when there has been a “plan failure”). Irs forms instructions 1040ez Income included under section 409A from an NQDC plan is reported in box 1 and box 12 of Form W-2 using code Z. Irs forms instructions 1040ez See Notice 2008-115. Irs forms instructions 1040ez The following examples use small dollar amounts for illustrative purposes. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez The term “vested” in the following examples means that the amount deferred is not subject to a substantial risk of forfeiture. Irs forms instructions 1040ez Conversely, the term “not vested” means that the amount deferred is subject to a substantial risk of forfeiture. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Example 1: Deferral that is immediately vested (no substantial risk of forfeiture) with no distributions and no vesting of prior-year deferrals. Irs forms instructions 1040ez For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into her employer’s NQDC plan. Irs forms instructions 1040ez The deferral of $20 was vested upon deferral and there was an employer match of $10 under the plan, which was also vested. Irs forms instructions 1040ez Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez Regular pay = $200; Deferral, not vested = $20; Employer match, not vested = $10. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez 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. Irs forms instructions 1040ez The deferral of $20 was vested upon deferral. Irs forms instructions 1040ez During the year, $100 of prior-year deferrals and $15 of investment earnings on the $100 of prior-year deferrals became vested. Irs forms instructions 1040ez Regular pay = $200; Deferral, vested = $20; Vesting of prior-year deferrals = $100; Vesting of investment earnings on $100 of prior-year deferral = $15. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez For the year, the employee’s regular pay was $100, and the employee deferred no pay into the employer’s NQDC plan. Irs forms instructions 1040ez There was no vesting of prior-year deferrals under the plan. Irs forms instructions 1040ez During the year, there were total distributions of $50 from the plan to the employee. Irs forms instructions 1040ez Regular pay = $100; Distribution = $50. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez   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. Irs forms instructions 1040ez Instead, report on Form SSA-131 the total amount the employee earned during the year. Irs forms instructions 1040ez * Submit the SSA-131 to the nearest SSA office or give it to the employee. Irs forms instructions 1040ez   *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. Irs forms instructions 1040ez Do not consider prior-year deferrals that are vesting in the current year. Irs forms instructions 1040ez If there was a plan failure, the box 1 amount in this calculation should be as if there were no plan failure. Irs forms instructions 1040ez Example 5: Deferral that is immediately vested and there are distributions (no vesting of prior-year deferrals). Irs forms instructions 1040ez For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. Irs forms instructions 1040ez There was also an employer match of $10. Irs forms instructions 1040ez The deferral and employer match were vested upon deferral. Irs forms instructions 1040ez There was no vesting of prior-year deferrals under the plan. Irs forms instructions 1040ez During the year, there were total distributions of $50 from the plan to the employee. Irs forms instructions 1040ez Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10; Distribution = $50. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. Irs forms instructions 1040ez The deferral was not vested upon deferral. Irs forms instructions 1040ez There was no vesting of prior-year deferrals under the plan. Irs forms instructions 1040ez During the year, there were total distributions of $50 from the plan to the employee. Irs forms instructions 1040ez Regular pay = $200; Deferral, not vested = $20; Distribution = $50. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez 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). Irs forms instructions 1040ez For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. Irs forms instructions 1040ez The deferral was vested upon deferral. Irs forms instructions 1040ez There was vesting of $100 of prior-year deferrals and $15 of earnings on the $100 prior-year deferral under the plan. Irs forms instructions 1040ez During the year, there were total distributions of $50 from the plan to the employee. Irs forms instructions 1040ez Regular pay = $200; Deferral, vested = $20; Distribution = $50; Vesting of prior-year deferrals ($100) and earnings on those prior-year deferrals ($15) = $115. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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). Irs forms instructions 1040ez For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. Irs forms instructions 1040ez The deferral was not vested upon deferral. Irs forms instructions 1040ez There was also vesting of prior-year deferrals and employer matches and earnings on these amounts under the plan ($115). Irs forms instructions 1040ez During the year, there were total distributions of $50 from the plan to the employee. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez File Form SSA-131 -0-     Form SSA-131 Completion Item 6 ($230 Amount from Box 1 of Form W-2 minus $50 Distribution) $180 Table 2. Irs forms instructions 1040ez Specifications for Electronic Reporting of Special Wage Payments Record Position  Field Size   Description Start End 1 3 3 Record Type—must include only the capital letters “SWP” 4 12 9 SSN—must be numeric and may not be all zeros 13 27 15 Last Name—all capitals and no punctuation; may have blanks on right only 28 38 11 First Name—all capitals and no punctuation; may have blanks on right only 39 39 1 Middle Initial—must be either a capital letter or blank 40 48 9 EIN—must be numeric and may not be all zeros 49 59 11 Payment—must be numeric; may not be all zeros; last two digits on right are assumed to be cents; no period or dollar sign 60 63 4 Payment Year—must be only a four-digit year 64 66 3 SSA Office Code—must be numeric and may be all zeros 67 67 1 Payment Type Code—must be the capital letter “T” 68 117 50 Filler  The record format is a fixed length of 117. Irs forms instructions 1040ez  The file format is ASCII. Irs forms instructions 1040ez  Submit only one file at a time. Irs forms instructions 1040ez   Table 3. Irs forms instructions 1040ez Sample—Paper Listing for Reporting Special Wage Payments to Several Employees Report of Special Wage PaymentsTax Year: Page of A. Irs forms instructions 1040ez Employer Name: EIN:   Address: Contact Name:     Phone: ( )   . Irs forms instructions 1040ez 1) B. Irs forms instructions 1040ez Employee Name: (Last) (First) (MI)   C. Irs forms instructions 1040ez SSN: D. Irs forms instructions 1040ez SWP:$ E. Irs forms instructions 1040ez Type: Other: 2) B. Irs forms instructions 1040ez Employee Name: (Last) (First) (MI)   C. Irs forms instructions 1040ez SSN: D. Irs forms instructions 1040ez SWP:$ E. Irs forms instructions 1040ez Type: Other: 3) B. Irs forms instructions 1040ez Employee Name: (Last) (First) (MI)   C. Irs forms instructions 1040ez SSN: D. Irs forms instructions 1040ez SWP:$ E. Irs forms instructions 1040ez Type: Other: 4) B. Irs forms instructions 1040ez Employee Name: (Last) (First) (MI)   C. Irs forms instructions 1040ez SSN: D. Irs forms instructions 1040ez SWP:$ E. Irs forms instructions 1040ez Type: Other: 5) B. Irs forms instructions 1040ez Employee Name: (Last) (First) (MI)   C. Irs forms instructions 1040ez SSN: D. Irs forms instructions 1040ez SWP:$ E. Irs forms instructions 1040ez Type: Other:     INSTRUCTIONS:   Enter tax year and page number. Irs forms instructions 1040ez   A. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez   B. Irs forms instructions 1040ez Employee's name. Irs forms instructions 1040ez   C. Irs forms instructions 1040ez Employee's social security number (SSN). Irs forms instructions 1040ez   D. Irs forms instructions 1040ez Total amount of special wage payments made to the employee. Irs forms instructions 1040ez   E. Irs forms instructions 1040ez 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. Irs forms instructions 1040ez   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. Irs forms instructions 1040ez (Get Form SSA-131. Irs forms instructions 1040ez )                 Prev  Up  Next   Home   More Online Publications