By Stephanie M. Casey, CPA, Tax Senior Manager
Three IRS rules impacting Forms W-2
The Internal Revenue Service (IRS) is reminding businesses that changes under the SECURE 2.0 Act may affect reporting amounts on Forms W-2 beginning tax year 2023.
The provisions potentially affecting Forms W-2 (including Forms W-2AS, W-2GU and W-2VI) are:
- De minimis financial incentives
- Roth Savings Incentive Match Plan for Employees (SIMPLE) and Roth Simplified Employee Pension (SEP) Individual Retirement Arrangements (IRAs)
- Optional treatment of employer nonelective or matching contributions as Roth contributions
Overview of the W-2 tax reporting considerations
Designated Roth nonelective contributions and designated Roth matching contributions.
Under Section 604 of the SECURE 2.0 Act, plans can allow employees to designate certain matching and nonelective contributions made after Dec. 29, 2022, as Roth contributions.
Form W-2 tax reporting
These contributions are not subject to withholding for federal income tax and are also generally not subject to withholding for Social Security or Medicare tax.
Form 1099-R tax reporting
Unlike regular Roth contributions, designated Roth nonelective and matching contributions must be reported on Form 1099-R for the year in which they are allocated to an individual’s account. They must be reported in boxes 1 and 2a of Form 1099-R, and code “G” is used in box 7.
Complete/print Form W-2 on IRS site
The IRS also advised businesses that they can now complete and print various copies (excluding Copy A) of Forms W-2 (including Forms W-2AS, W-2GU and W-2VI) on IRS.gov for recipients. Any information entered on one copy (excluding Copy A) will automatically appear on the others. Copy A cannot be completed online to print and file with the Social Security Administration.
Correcting W-2 filing errors
If your business filed 2023 Forms W-2 without reflecting changes under the SECURE 2.0 Act, you may need to file Form W-2c to correct any errors.
Background
The SECURE Act 2.0 made significant tax provisions in an effort to make saving for retirement more accessible to all Americans, including additional features to encourage use of employer retirement plans.
Your Keiter Opportunity Advisors will continue to keep you updated on new and changing regulations that may impact your business.
Additional Resources
Source:
About the Author
Stephanie M. Casey, CPA, Tax Senior Manager
Stephanie is a Tax Senior Manager at Keiter. Her areas of expertise include tax consulting, compliance and research for high net worth individuals, partnerships, and closely held multi-state corporations. Stephanie also has experience with a wide variety of industries including transportation services, real estate development, and construction. She is a member of the Firm’s Family & Executive Advisory Services team.
More Insights from Stephanie M. CaseyThe information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
