941 and Exempt FIT employees

[marge]

Hello:
I have two employees who are exempt from FIT. Their total gross wages are not included on Line 2 of the 941. Instead the amount on that line has been picked up from the " Quarterly Totals page "Subject to FIT (Employee)" Wages.

The original set up for the employees is correct with a "yes" indicating exempt from FIT.

Also, when I run a W-2 to see how it lines out, there is no amount on Line 1 (Total Wages). Am I misunderstanding this? Thanks Marge

[Paul Mayer]

If an employee is marked as exempt from FIT, it will not be included on line 2 of the 941 as line 2 is "Wages Subject to FIT".

Line 1 of the W2 form is also "Wages Subject to FIT".

Some more clarification is that box 2 of the 941 is to show the wages reported in box 1 of the W2. And the W2 instructions are for "Total Taxable Wages", see from the W2 Instructions:

"Box 1—Wages, tips, other compensation. Show the total taxable wages, tips, and other compensation that you paid to your employee during the year."