Employee Reimbursements, Form W-2, Wage Inquiries (2004 IRS FAQ)

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IRS FAQ 4.6 Interest/Dividends/Other Types of Income: Employee Reimbursements, Form W-2, Wage Inquiries

What box on the Form W-2 do I use to determine my income to go on my tax return? What are all of these other boxes for? Does the amount from any other box go anywhere on my tax return?

For most people, only the amount in box 1 (wages, tips, other compensation) needs to be reported as income on your tax return. If you are an employee who receives tips, you may have to include the amount from box 8 (allocated tips) as income on your return.

Any employer-provided dependent care benefits listed in box 10 that are not excludable from income must be reported as wages on line 7 of the Form 1040. Any credit taken for child and dependent care expenses must be reported on line 44 of the Form 1040. Refer to Form 2441 (PDF), Child and Dependent Care Expenses, to determine the amount, if any, of the exclusion or credit.

Employer-provided adoption benefits that must be used to complete Form 8839 (PDF), Qualified Adoption Expenses, appear in box 12 with a code T. Employer contributions to a medical savings account (MSA), which you report on line 3b of Form 8853 (PDF), Medical Savings Accounts and Long-Term Care Insurance Contracts, also appear in box 12 with a code R. Employer-provided benefits may be taxable as compensation under certain conditions. Refer to the relevant form instructions.

If you received advanced earned income credit payments from your employer (box 9), you must include the amount on your individual income tax return Form 1040 or 1040A.

The other boxes either display information that the employer wanted to provide to you, or contain information that must be reported to the Social Security Administration or to the IRS.


Should Line 10, Dependent Care Benefits, of my Form W-2 be included when calculating my income?

A portion of the amount in Box 10 of the Form W-2 may be includable in your income. Please refer to the Form 2441 Instructions, Child and Dependent Care Expenses, 1040A filers refer toForm 1040A, Schedule 2 (PDF), Child and Dependent Care Expenses for 1040A Filers to determine how much, if any, of the dependent care benefits may be excluded. If you meet the requirements described in Form 2441 (PDF), Child and Dependent Care Expenses, you can exclude up to $5,000 of dependent care benefits provided under a qualified employer plan. However, this amount is reduced or eliminated if your earned income (or your spouse's earned income) is less than $5,000, or if your child is not under age 13. Any benefits that exceed the exclusion limit ($5,000) are also includable in your income, and your employer should have included these amounts in Boxes 1, 3, and 5 of your Form W-2 in addition to reporting these amounts in Box 10. The amount you can exclude is figured and claimed by completing Part III of Form 2441 or Schedule 2 of Form 1040A.


Source: IRS.gov

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