On my Form W-2, why would line 1, wages, tips, other compensation, be different from line 3, social security wages, and line 5, medicare wages and tips?
When the amount in box 1 is less than the amount in boxes 3 and 5, you have received some employee compensation that is not subject to Federal income tax but is subject to Social Security and Medicare taxes. The most common example of this is deferred compensation, e.g. contributions to a 401(k) plan. Another example is an employee benefit plan that provides for the contribution of pretax dollars (e.g. cafeteria plan, flexible spending arrangement, dependent care plan, etc.). When the amount in box 1 is more than the amount in boxes 3 and 5, you have received some employee compensation that is not defined as wages for the purpose of social security and Medicare taxes. An example of this would be when a child works for his or her parent in the parent’s trade or business and is under age 18.
Related Questions
- Since Roth contributions are already included as part of wages, tips and other compensation on the Form W-2, must the amount contributed as Roth contributions be identified on the Form W-2 as well?
- On my Form W-2, why would line 1, wages, tips, other compensation, be different from line 3, social security wages, and line 5, medicare wages and tips?
- On Form W-2, why would line 1, wages, tips, other compensation, be different from line 3, social security wages, and line 5, Medicare wages and tips?
