w-2 for full-time students

[LTCG]

Hello, Some of my employees are full time students and exempt from Federal and State taxes. No amount appears in Box 1, nor is there any info at the bottom regarding State taxes. Did I do something wrong? One of the parents called the IRS and was told there should be an amount even if no taxes were taken. Suggestions?

Thank you,
Laurie

[Paul Mayer]

You marked the students as exempt from FIT. Box 2 on the 941 Form and Box 1 on the W2 Form are only Wages Subject to Federal Income Tax. See this FAQ:

http://zpay.com/vbulletin/showthread.php?4102-941-Form-Line-2-Different-From-Line-5a-and-5c

Since you marked them as exempt from FIT, all of their stored payroll transactions are marked as such. Going forward if you want to reduce the amount of taxes deducted, have the employees submit a W4 Form with a high number of exemptions.

To fix what you did will require editing all of their payroll transactions and then reprinting the 941 forms for the year as well and marking them as corrected copies to send to the IRS. Editing can be a bit touchy in PayWindow and you should call us so it can be explained on what you need to have in front of you and what you need to do.

[LTCG]

You marked the students as exempt from FIT. Box 2 on the 941 Form and Box 1 on the W2 Form are only Wages Subject to Federal Income Tax. See this FAQ:

http://zpay.com/vbulletin/showthread.php?4102-941-Form-Line-2-Different-From-Line-5a-and-5c

Since you marked them as exempt from FIT, all of their stored payroll transactions are marked as such. Going forward if you want to reduce the amount of taxes deducted, have the employees submit a W4 Form with a high number of exemptions.

To fix what you did will require editing all of their payroll transactions and then reprinting the 941 forms for the year as well and marking them as corrected copies to send to the IRS. Editing can be a bit touchy in PayWindow and you should call us so it can be explained on what you need to have in front of you and what you need to do.

Hello,

I offered your explanation to the concerned parent and her reply was additional information that seems to show that the wages should be printed on w-2s and therefore on 941s. She plans to include a note with her 2016 taxes but going forward I want to do things correctly.

She attached the complete w-2 instructions and highlighted #22 below "Include the following".

22. All other compensation, including certain
scholarship and fellowship grants. See Scholarship and
fellowship grants. Other compensation includes taxable
amounts that you paid to your employee from which
federal income tax was not withheld. You may show other
compensation on a separate Form W-2. See Multiple
forms.

It sounds to me like it should be included in Box 1 of the w-2s and therefore box 2 of the 941.

What do you think?

Laurie

[Paul Mayer]

You had marked it as Exempt from FIT which set it as wages NOT subject to FIT. :-(

22. All other compensation, including certain
scholarship and fellowship grants. See Scholarship and
fellowship grants. _Other compensation includes taxable
amounts that you paid to your employee from which
federal income tax was not withheld_. You may show other
compensation on a separate Form W-2. See Multiple
forms.