Form W-2 2014 Tax Year Checklist
Purpose and Reporting Overview
Form W-2 reports 2014 wages, withheld federal income tax, Social Security and Medicare taxes, and other compensation. For 2014, Box 12 code DD reports employer-sponsored health coverage cost for information only and is not taxable.
This reporting requirement became effective for the 2012 tax year under the Affordable Care Act. The amount shown reflects employee transparency regarding total compensation, including health insurance value.
Employee and Employer Identification
Enter employee and employer identification on lines a through f with complete accuracy. Verify the employee's Social Security number matches Social Security Administration records to prevent processing delays.
If the employee's name and Social Security number do not match their Social Security card, the employee must request a corrected card from the Social Security Administration. Mismatches delay processing and may affect future Social Security benefits.
Wages and Federal Income Tax Withholding
Report Box 1 wages, tips, and other compensation for 2014, including all taxable compensation. Exclude amounts not subject to federal income tax under specific Internal Revenue Code sections, such as nontaxable combat pay reported with code Q or moving expense reimbursements reported with code P.
Do not net business expenses against the Box 1 amount. Enter Box 2 federal income tax withheld to match IRS quarterly deposit records and Form 941 annual reconciliation.
Social Security Wages and Tax Requirements
Complete Boxes 3 and 4 for Social Security wages and tax withheld for the 2014 tax year. The Social Security wage base limit for 2014 is $117,000 per employee. Wages above this threshold are not subject to the 6.2% Social Security tax. Report only wages up to the $117,000 wage base in Box 3, and calculate the 6.2% Social Security tax on the amount reported.
Medicare Wages and Additional Medicare Tax
Populate Boxes 5 and 6 with Medicare wages and Medicare tax withheld during 2014. All wages are subject to the 1.45% Medicare tax with limited exceptions.
Report the 1.45% Medicare tax on all Medicare wages in Box 6. Employees who earned over $200,000 in Medicare wages are subject to an additional 0.9% Medicare Tax that employers must withhold but do not report separately on Form W-2.
Allocated Tips Reporting
Complete Box 8 for allocated tips if you operate a food or beverage establishment during the 2014 tax year. Tips not reported by the employee to the employer are allocated by the establishment and shown in Box 8 for informational purposes.
Do not include the allocated tips amount in Boxes 1, 3, 5, or 7 when preparing the Form W-2. Employees must report allocated tips on their individual tax return using Form 4137 to calculate the Social Security and Medicare tax owed on those unreported tips, ensuring proper tax compliance and contribution to future Social Security benefits.
Dependent Care Benefits
Fill Box 10 with dependent care benefits provided to the employee during 2014 up to the $5,000 annual tax-free limit for qualified dependent care assistance programs. Include any amount exceeding $5,000 in Box 1 as taxable wages subject to federal income tax withholding and employment taxes.
Employees complete Form 2441 with their individual tax return to determine the final taxable and nontaxable portions of dependent care benefits received during the year. The $5,000 tax-free exclusion limit remained unchanged for the 2014 tax year with no mid-year adjustments, modifications, or increases to the maximum allowable benefit exclusion amount under section 129.
Elective Deferral Limits for 2014
Enter Box 12 codes and amounts for elective deferrals and verify compliance with 2014 contribution limits. Total elective deferrals for section 401(k) plans reported with code D are capped at $17,500 for 2014.
SIMPLE plan deferrals reported with code S are capped at $12,000 for 2014. Section 403(b) plan deferrals reported with code E have the same $17,500 limit as 401(k) plans.
Special Catch-Up Contributions
Employees age 50 or older may defer an additional $5,500 in catch-up contributions to 401(k) and 403(b) plans for 2014. SIMPLE plan participants age 50 or older may contribute an additional $2,500 in catch-up contributions.
Section 403(b) plan participants who meet the 15-year rule requirements may contribute an additional $3,000 per year up to a lifetime maximum of $15,000. Deferrals under code G for section 457(b) plans have a separate $17,500 limit for 2014.
Additional Box 12 Requirements
Report code H contributions capped at $7,000 for 2014 in Box 12. Include amounts exceeding contribution limits in taxable income reported in Box 1.
Report Box 12 code DD employer-sponsored health coverage cost for employee information only. The amount shown is not taxable and reflects the 2014 Affordable Care Act transparency requirement.
Retirement Plan Participation
Check Box 13 if the employee participated in a qualified retirement plan during 2014. Checking this box signals to the employee that IRA contribution deduction phase-out limits may apply based on modified adjusted gross income.
Employees refer to Publication 590 to determine deductible IRA contribution limits. Active plan participation affects the calculation of allowable IRA deduction amounts.
State and Local Tax Reporting
Complete state and local tax reporting in Boxes 15 through 20 using the employee's work location. Enter the state identification number, state wages, and state income tax withheld in the appropriate boxes.
State wages may differ from federal wages reported in Box 1. Include local wages, local income tax withheld, and locality name as required by state and local withholding regulations for 2014.
Copy Distribution and Filing Deadlines
Furnish Copy B and Copy C to each employee by February 2, 2015, for the 2014 tax year. Send Copy A to the Social Security Administration by March 2, 2015, if filing on paper.
File Copy A electronically by March 31, 2015, if submitting electronic wage reports. Retain Copy D for your employer records for at least four years.
Electronic Filing Requirements
Employers filing 250 or more Forms W-2 must file electronically using the Social Security Administration W-2 Online service. Electronic filing does not require a separate Form W-3 filing when submitted through approved electronic methods.
The Social Security Administration provides Business Services Online for employers to create, save, and submit Forms W-2 electronically. Electronic filing saves time and helps ensure accuracy in wage reporting.
Key 2014 Tax Year Information
The Social Security taxable wage base for 2014 is $117,000 per employee. Wages above this amount remain subject to the 1.45% Medicare tax without a ceiling.
Employees with Medicare wages exceeding $200,000 are subject to the 0.9% Additional Medicare Tax. Employers withhold Additional Medicare Tax but report only the combined Medicare tax amount in Box 6.
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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.
