IRS Releases 2013 General Instructions for Forms W-2 and W-3
Author: Rena Pirsos, XpertHR Legal Editor
As previously reported on XpertHR, the 2013 Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, were released by the Internal Revenue Service (IRS) earlier this month without the instructions. The IRS has now released the 2013 General Instructions for Forms W-2 and W-3. The instructions note the following new information:
- $2,500 limit on health flexible spending arrangements (FSAs) - For plan years beginning after December 31, 2012, a cafeteria plan many not allow an employee to request salary reduction contributions for a health FSA exceeding $2,500.
- Additional Medicare Tax -Beginning January 1, 2013, employers are required to withhold a 0.9 percent Additional Medicare Tax (AMT) on any Social Security and Medicare wages paid to an employee exceeding $200,000 in a calendar year. Employers must begin withholding AMT in the pay period in which they pay wages or compensation exceeding $200,000 to an employee and continue to withhold it until the end of the calendar year. AMT is only imposed on employees; there is no employer share of AMT. All wages and compensation subject to Medicare tax are subject to AMT withholding if they exceed the $200,000 withholding threshold. Employers can find additional information about AMT by going to IRS.gov and entering "Additional Medicare Tax" in the search box.
- Employee Social Security Withholding - The employee Social Security tax withholding rate is 6.2 percent for wage payments made beginning in 2013. Previously, the employee tax rate was 4.2 percent. The employer tax rate is unchanged at 6.2 percent.
- New Charts - To aid employers in reporting, a Form W-2 Box 13 Retirement Plan Checkbox Decision Chart and a Nonqualified Deferred Compensation Reporting Examples Chart have been added to the instructions on pages 27 and 28.
Note that there is a new page on the IRS website for information and future developments relating to Forms W-2 and W-3 and the instructions.
Additional Resources
IRS Updates Rules and Specifications for Substitute Forms W-2 and W-3
Congress Narrowly Avoids 'Fiscal Cliff,' but Not Increase in 2013 Social Security Tax Rate
Impact of the American Taxpayer Relief Act of 2012 on Payroll
Payroll > Taxation of Employee Benefits
Payroll > Depositing and Reporting Withheld Taxes