Form W-2 2011 Tax Year Checklist
Purpose and Overview
Form W-2 reports 2011 wages, withheld federal income tax, and Social Security and Medicare taxes for each employee. Employers must complete this form for every employee who received wages during the calendar year.
The form documents compensation subject to federal income tax withholding and employment taxes. Employees use Form W-2 to prepare their individual income tax returns and verify withholding amounts.
2011 Tax Year Thresholds
The maximum elective deferral limit for 401(k), 403(b), and most 457(b) plans is $16,500 for 2011, while the limit for SIMPLE IRA and SIMPLE 401(k) plans is $11,500. Employees age 50 or older may contribute an additional $5,500 to general retirement plans or an additional $2,500 to SIMPLE plans as catch-up contributions.
The 2011 Earned Income Credit income thresholds vary by filing status and number of qualifying children, ranging from $13,660 for single filers with no children to $43,998 for single filers with three or more children. Married filing jointly thresholds are $5,080 higher than single filer amounts for each corresponding category.
Employee and Employer Identification
Enter the employee's Social Security number in Box a and verify its accuracy against the employee's Social Security card. Record your employer identification number in Box b and your legal business name and complete address in Boxes c, d, e, and f.
Assign a control number in Box d for your internal tracking purposes. Notify employees immediately when their name on Form W-2 differs from the name on their Social Security card, and advise them to request a corrected card from the Social Security Administration.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Wage and Compensation Reporting
Box 1 reports total compensation subject to federal income tax withholding, including all wages, salaries, bonuses, taxable fringe benefits, and taxable tips reported by the employee. Exclude allocated tips reported in Box 8 and nontaxable moving expense reimbursements reported with Code P in Box 12 from this amount.
Box 2 shows the total federal income tax withheld from the employee's 2011 wages under Internal Revenue Code Section 3402, representing prepayment of federal income tax liability throughout the year. Employees compare this withholding amount to their actual tax liability when filing returns, and many receive refunds when Box 2 withholding exceeds their total tax liability.
Social Security and Medicare Tax Reporting
Report wages subject to Social Security tax in Box 3 up to the 2011 wage base limit of $106,800, then calculate Social Security tax withheld at the 2011 employee rate of 4.2 percent and enter this amount in Box 4. The reduced rate applies only to the employee portion of Social Security tax for 2011, excluding wages already subject to Social Security tax from other employment or prior years.
Enter all wages subject to Medicare tax in Box 5 without any wage base limitation, then calculate Medicare tax withheld at 1.45 percent of Box 5 wages and record this amount in Box 6. Include all taxable tips and wages that exceed the Social Security wage base in the Medicare wage calculation.
Tips and Allocated Tips
Box 7 reports the total amount of tips the employee reported to you during 2011, and these reported tips are already included in the Box 1 wages amount. Box 8 shows allocated tips that you assigned to the employee under the large food or beverage establishment rules, which do not appear in Box 1 and are not subject to withholding at the time of allocation.
Your employees must report allocated tips on their tax returns and pay Social Security and Medicare taxes on these amounts by filing Form 4137 to calculate and pay the employment taxes. The allocated tips may be excluded from income only when the employee's own records demonstrate they did not receive the allocated amount.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Retirement Plans and Dependent Care Benefits
Box 10 reports the total dependent care benefits the employer provided or that the employee incurred under a Section 125 cafeteria plan, with the first $5,000 remaining nontaxable and excluded from Box 1. Any amount exceeding $5,000 becomes taxable compensation and must also be included in Box 1 wages, requiring the employee to complete Form 2441 to determine the taxable and nontaxable portions.
Check the retirement plan box in Box 13 when the employee participated in or was eligible for an employer-sponsored retirement plan during any part of 2011, as this designation affects the employee's ability to deduct traditional IRA contributions. The retirement plan indicator applies regardless of whether the employee made elective deferrals or received employer contributions during the year.
Box 12 Codes and Reporting
Use specific codes in Box 12 to report various types of compensation and benefits:
- Code D: Elective deferrals to 401(k) plans (maximum $16,500 for 2011)
- Code E: Elective deferrals to 403(b) plans (maximum $16,500 for 2011)
- Code F: Elective deferrals to 408(k)(6) plans (maximum $16,500 for 2011)
- Code G: Elective deferrals to 457(b) plans (maximum $16,500 for 2011)
- Code H: Elective deferrals to 501(c)(18)(D) plans (maximum $7,000 for 2011)
- Code S: Employee salary reduction contributions to SIMPLE plans (maximum $11,500 for 2011)
- Code DD: Cost of employer-sponsored health coverage (optional for 2011, informational only)
Employees age 50 or older may add catch-up contributions of $5,500 for Codes D, E, F, and G, or $2,500 for Code S. Report the year of contribution for make-up military service pension contributions. Code DD reporting remains optional for the 2011 tax year under transition relief provisions.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
State and Local Tax Information
Complete Boxes 15 through 20 with state and local tax information when applicable, entering your state employer identification number in Box 15 and the two-letter state abbreviation, then reporting state wages and state income tax withheld in Boxes 16 and 17. Include the locality name in Box 18 and local wages and local income tax in Boxes 19 and 20 as required by your jurisdiction.
State and local wage amounts may differ from Box 1 federal wages due to state-specific inclusions or exclusions, so verify that reported amounts correspond to the definitions used on state and local tax returns. Some states exclude certain fringe benefits or reimbursements that appear in federal taxable wages, requiring you to contact your state tax authority for specific reporting requirements and wage definitions.
Form Distribution and Filing Deadlines
Furnish Copies B, C, and 2 to each employee by January 31, 2012, as employees use Copy B for their federal tax return, Copy C for personal records, and Copy 2 for state and local tax returns. File Copy A with Form W-3 to the Social Security Administration by February 29, 2012, for paper filing or April 2, 2012, for electronic filing, while retaining Copy D in your business records for at least four years.
Do not cut, fold, or staple Copy A forms when filing paper returns, and use Form W-3 as the transmittal document for all Copy A forms. Electronic filing provides an extended deadline and reduces processing errors.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
