2013 Form W-2 Checklist: Wage and Tax Statement
Wage and Tax Statement
Form W-2 documents wages, federal and state income tax withholding, and Social Security and Medicare taxes for 2013 employees. This year introduces the Additional Medicare Tax at 0.9 percent on Medicare wages above $200,000, reportable in Box 6, combined with the standard 1.45 percent Medicare tax.
Employees must verify Box 5 Medicare wages to determine Form 8959 filing obligations, which represents a new requirement for the 2013 tax year. The Additional Medicare Tax withholding applies when an employer pays FICA wages exceeding $200,000 to an employee during the calendar year.
Employee and Employer Identification
Confirm the Social Security number in Box a matches the employee's current SSA record to ensure proper credit for wages and taxes. If the employee reports a name or SSN discrepancy with their social security card, direct them to SSA for card replacement before processing year-end forms.
Record the nine-digit EIN in Box b exactly as assigned by the IRS, and include the complete employer name and current business address in Box c using the legal entity name rather than trade name. Cross-reference all employee identification information against employment records for spelling accuracy, and any mismatch must be corrected via Form W-2c and communicated to the employee before filing with the Social Security Administration.
Wage and Withholding Reporting
Box 1: Wages, Tips, and Other Compensation
- Include all taxable wages, bonuses, and tips paid during 2013 in this box.
- Do not report nontaxable moving expense reimbursements or excludable combat pay.
- Separately report dependent care benefits exceeding $5,000 in Box 1 as taxable compensation.
- Amounts up to $5,000 appear only in Box 10 and are not included in Box 1 wages.
Box 2: Federal Income Tax Withheld
Enter total federal income tax withheld from employee paychecks for 2013, ensuring the amount reconciles with quarterly Form 941 filings. This amount represents the total tax withheld throughout the year that employees will claim as a credit against their federal tax liability.
Employees may claim refund eligibility for amounts withheld even if their income falls below the filing threshold. The accuracy of this box is critical for proper tax reconciliation on individual returns.
Boxes 3 and 4: Social Security Wages and Tax
Report Social Security wages up to the 2013 wage base limit of $113,700 in Box 3 without exceeding this statutory maximum. Calculate Social Security tax at 6.2 percent on these wages and report the withheld amount in Box 4.
Verify withholding does not exceed the statutory rate and that total withholding for the year does not exceed $7,049.40. If an employee had multiple employers during 2013, they may claim excess Social Security tax credit on their individual tax return.
Boxes 5 and 6: Medicare Wages and Tax
Report all Medicare wages and tips in Box 5 with no wage base limit, as Medicare tax applies to all covered compensation. Box 6 must report the total employee Medicare tax withheld, which includes both the standard 1.45 percent Medicare tax and any 0.9 percent Additional Medicare Tax withheld.
These amounts are combined into one total figure in Box 6 rather than being separately itemized. Employees use the Box 5 amount to determine if Form 8959 is required under the new 2013 threshold guidance.
Specialized Reporting Requirements
Tips and Allocated Tips
Enter tips reported by the employee in Box 7, representing amounts the employee documented throughout the year. If tips are underreported based on the employer's gross receipts, allocate tips using the IRS-approved method and report in Box 8.
Employees must file Form 4137 to report allocated tips, pay Social Security and Medicare tax, and claim proper Social Security credits. This requirement applies even if the employer records cannot independently verify the allocated amount.
Dependent Care Benefits
Report total dependent care benefits the employer paid or incurred, including Section 125 cafeteria plan amounts provided during 2013. Amounts exceeding $5,000 must also be reported in Box 1 as taxable wages subject to federal income tax withholding.
Employees must complete Form 2441 to separate taxable and nontaxable portions of dependent care assistance received. This coordination between Box 1 and Box 10 is critical for proper tax reporting and dependent care credit calculation.
Nonqualified Deferred Compensation
Report distributions from nonqualified deferred compensation plans or nongovernmental Section 457(b) plans if the amounts are included in Box 1 wages. For prior-year deferrals becoming taxable in 2013 due to the elimination of substantial risk of forfeiture, include amounts in Box 3 and Box 5.
Do not use Box 11 if both deferral and distribution occurred in the same calendar year for employees who will be age 62 or older by year's end. In this specific situation, leave Box 11 blank and file Form SSA-131 to report the total amount the employee earned during the year.
Box 12 Codes
- The 2013 elective deferral limit for 401(k), 403(b), and 457(b) plans (codes D, E, F, G) is $17,500.
- The SIMPLE IRA salary reduction contribution limit (code S) is $12,000 for 2013.
- The age 50 and older catch-up contribution limit is an additional $5,500 for 401(k) plans and $2,500 for SIMPLE plans.
- Code H applies to section 501(c)(18)(D) plan deferrals with a separate $7,000 annual limit.
- Code DD reports employer-sponsored health coverage cost and is informational only, not taxable.
Box 13 Status Indicators
Check "Retirement plan" if the employee participated in an employer-sponsored qualified plan, 403(b), SEP, or SIMPLE during any part of 2013. This checkbox signals potential limitations on the employee's traditional IRA deduction for the tax year.
Check "Statutory employee" only if the worker meets the IRC definition, such as a full-time life insurance agent. Check "Third-party sick pay" if a third party paid the employee's sick pay that is not included in Boxes 1, 3, or 5.
State and Local Tax Reporting
Enter the state employer ID number in Box 15 as assigned by the state tax authority, and report state wages and tips in Box 16 using the state's definition of taxable wages. State income tax withheld for the entire calendar year must be reported in Box 17, while local wages and tips appear in Box 18 if local income tax withholding applies.
Box 19 captures local income tax withheld for city or county tax jurisdictions, and Box 20 identifies the locality name using the official jurisdiction name. Ensure all state and local amounts reconcile with corresponding filings submitted during 2013, and furnish Copy 1 to tax authorities and Copy 2 to the employee by January 31, 2014.
2013 Tax Year Updates
The Additional Medicare Tax at 0.9 percent newly applies to Medicare wages above $200,000 reported in Box 5. Box 6 reports the total Medicare tax withheld, combining both the standard 1.45 percent and the 0.9 percent Additional Medicare Tax into one amount.
Employee Form 8959 filing is now required if their Medicare wages exceed applicable thresholds based on filing status. This represents a 2013 threshold change tied to the Affordable Care Act that affects high-income wage earners.
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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.
