The IRS has released the 2018 Instructions for Forms W-2 and W-3. Form W-2 is used to report employee wages and withholding while Form W-3 is a transmittal form that is sent to the Social Security Administration showing total earnings, Social Security wage, Medicare wage and withholding for all employees for the previous year.
There are a number of changes from the previous revision:
- Increased penalties
- New Box 12 Codes
- Code GG—Income from qualified equity grants under section 83
- Code HH—Aggregate deferrals under section 83elections as of the close of the calendar year
- Codes GG and HH are not reported on Form W-3
- Change in reporting fringe benefits
- Filers must withhold social security and Medicare tax, but filers have the option to not withhold federal income tax if the employee is notified and the amounts are reported in boxes 1, 3, 5, and 14.
- New qualified grants under section 83
- Suspension of exclusion for qualified moving expense reimbursements
To view the Instructions, please click here.
About the Author
Adam Rivera is a member of the Regulatory Analysis Team's Direct Tax division at Sovos. His main areas of focus are Federal and State Tax Withholding and Affordable Care Act (ACA) Reporting. Prior to Sovos, Adam worked as a legislative aide in the Florida House of Representatives. He also has experience in securities law, focusing on securities litigation and researching emerging crowdfunding methods of raising capital. Adam is a member of both the Massachusetts and Florida Bars. He earned his B.A. from the University of Florida and his J.D. from the University of Miami.More Content by Adam Rivera