Screen W2 - Wages (1040)

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MFA required for electronic filing

Effective May 3rd, the 2017 version of UltraTax CS requires multi-factor authentication (MFA) to access the electronic filing transmission feature in CS Connect.

Thomson Reuters is committed to proactively evolving our security features to help you protect your firm and your clients' data. For more information about multi-factor authentication, see Multi-factor authentication overview.

Overview

Use this screen to record information from the client's Form W-2. Note that in addition to using the wages information in several locations and calculations on the return, UltraTax CS also prepares a Salaries and Wages Report, which lists the name and amounts entered in this input screen.

If shareholder health insurance premiums on the W2 include amounts paid for specified premiums (i.e. premiums purchased via the Marketplace), enter the type code, form, and unit on the related W2 box 14 to link the 1095A amounts with the correct activity. Any amounts entered in W2, box 14 for medical insurance are treated as nonspecified premiums. Therefore, if all premiums are specified premiums, the W2 box 14 code 3 amount column should be blank, while the type code, form and unit fields should remain to ensure the correct linking behavior to the 1095A.

Data sharing

UltraTax CS enables you to share Schedule K1, 1099, W2, and 8615 financial data between 1120S, 1065, 1041, and 1040 clients automatically. (Note that UltraTax CS can transfer financial data into 1120C and 1065-B clients, but not out of these clients.) For details, see Data sharing overview.

You must diligently review all data that is shared among clients. See Reviewing all fields updated via data sharing for information on how to access the Imported Fields Listing.

For clients who do not provide the IRS copy of their Form W-2 for attachment to the return, a custom paragraph may be included in the filing instructions to instruct the taxpayers to attach Form W-2 to the return before filing. The paragraph also instructs the taxpayer to attach Forms W-2G, 1099, and 2439 to the return, if applicable. To select this custom paragraph on a client basis, select custom paragraph Form Attachments (FI) from one of the Paragraph Description fieldviews in Screen Letter. To select this custom paragraph to print for all clients when applicable, choose Setup > 1040 Individual, click either the Transmittal Letter or Filing Instructions button in the Federal tab, click the Custom Paragraphs tab, and mark the Form Attachments (FI) checkbox. For additional information, see Custom paragraphs FAQs.

Source data entry

The UltraTax CS Source Data Entry utility enables you to enter data on facsimile versions of forms your clients submit for the preparation of their tax returns. Once the facsimile forms are completed, you can export the data to UltraTax CS and transfer it into your client data files via the data sharing feature. For more information including a list of available facsimiles, see UltraTax CS Source Data Entry overview.

General Information

Use this section to enter general information applicable to the W-2.

Notes

  • For Massachusetts returns, the information entered in this screen is used to calculate the deduction for Social Security payments that are automatically included on Form 1, lines 11a and 11b or Form 1-NR/PY, lines 15a and 15b. For resident clients or clients whose Massachusetts wages exceed their federal wages, the amounts entered in the SS W/H and Medicare W/H fields are included in the deduction. In all other cases, the deduction is based on the Massachusetts wages only.
  • For Kansas returns, the information entered in this screen is used to calculate the addition modification to federal adjusted gross income for contributions to the Kansas Public Employees' Retirement System. The modification is equal to the amount of state wages in box 16 less the amount of wages in box 1.
  • For Ohio Cities returns, withholding entered on the same line as local wages is employment city withholding. Withholding entered on a line with no wages is resident city withholding. Local wage default to Medicare wages.

Enter T or S in this field to indicate whether the wage information you are entering pertains to the taxpayer or spouse. Data must be entered in this field to share information to and from Screen W2.

Enter the employer's identification number to share financial and non-financial data to and from Screen W2. Data cannot be shared to or from Screen W2 if the either the EIN or T, S fields are blank. This field is required to file electronically.

Enter the employer's name. The name entered in this field is used as the unit description. This field is mandatory.

Note: This field contains a linked custom fieldview, which enables you to automatically enter data in the corresponding employer address, city, state, and ZIP code fields. Click the down arrow and choose Edit Multi-field Custom Fieldview to open the Custom Fieldview dialog, in which you can enter or select a fieldview item for these linked fields. See Linked custom fieldview examples for more information.

Enter 1 in this field if the taxpayer is a minister, enter 2 if the taxpayer is in the military, enter 3 if the taxpayer received wages as a shareholder of an 1120S corporation involved in farming or as a fishing crew member, or enter 4 if the taxpayer is in the National Guard.

Notes

  • If 1 is entered in this field, wages entered in the Wages, tips field are automatically reported on Clergy Worksheets 1 and 4. Additional data may be required in Screen Clergy, located in the Taxes folder, to accurately calculate exclusion, excess allowance, and ramifications to self-employment tax. For additional information, refer to the help for Screen Clergy by pressing F1 from any field in that screen. A minister for tax purposes is not covered by FICA and should not have Social Security or Medicare withholding. Please refer to IRS Publication 517 for more information.
  • Excess allowances calculated on the Clergy Worksheets are automatically reported on Form 1040, line 7.

Use this field to designate if the Form W-2 is standard or non-standard. The information is used for electronic filing and for completing Form 4852. In order to complete Form 4852, this field must contain N for Non-standard.

Enter an explanation describing how the W-2 amounts were determined and describe the efforts to obtain Form W-2 in the statements provided. Data must be entered in both fields to properly calculate Form 4852.

Note: To complete Form 4852, the Standard/Non-standard field must contain an N for Non-standard.

This field is used for electronic filing. Enter X in this field if a corrected W-2 was provided for the W-2 being entered in Screen W2.

Enter X in this field if the W-2 is from the current employer. The following states use this field: Alabama and Pennsylvania. For more information, access the input screen help for the appropriate UltraTax CS state application by pressing F1 from within a state input screen.

Enter X in this field if the W-2 was issued by a common reporting agent (also called an IRC Section 3504 agent). If two or more W-2s have the same EIN and this field is marked, they will be considered separate employers for the calculation of excess social security and tier 1 RRTA tax withholding on Page 2 of Form 1040. Do not enter X in this field if the W-2 is issued by a common paymaster as described in IRS Publication 15-A. W-2s issued by a common paymaster with the same EIN are considered to be issued by the same employer.

Use this field to classify the wage as foreign earned income reported on Forms 2555 and/or 1116. The Form 2555 Allocation Worksheet reports the allocation between U.S. and foreign earned income, including any related self-employment items. Foreign income earned before, during, and after the foreign assignment is reported, less any applicable exclusion, by Form 1116 as eligible for the foreign tax credit.

Enter X in this field only if a Form 1040-SS is being filed to indicate the source document is a Form W-2PR instead of a Form W-2.

Note: Both Form W-2 and Form W-2PR source documents are allowed for Form 1040-SS returns.

Electronic filing note: The Form W-2PR for ELF in View > Form has certain fields that can only be entered via form overrides. These fields are indicated with an asterisk (*) on the form, and are only used in the electronic file. (The fields are not used for tax preparation.)

If the taxpayer is married, files a separate federal return, and resides in one of the following community property states - AZ, CA, ID, LA, NM, NV, TX, WA, or WI (or for registered domestic partners, files a Single or Head of Household federal return, and resides in CA, NV or WA) - use this field to identify whether or not the wages are community property. By default, UltraTax CS treats a blank entry (i.e. no entry) as community property and an entry of N as non-community property (i.e. separate property). W2 units indicated as community property will be allocated 50/50 to the taxpayer and the spouse when two separate clients are created via the Filing Status Optimization utility with the Split income according to Community Property rules option enabled.

For more information about the Filing Status Optimization utility and the option for community property returns, see Using the Filing Status Optimization utility (1040) and Filing Status Optimization dialog.

Notes

  • This field is disabled if a community property state return is not attached or the taxpayer's primary residence indicated on Screen 1040 is not a community property state.
  • Any entry in this field will proforma to all subsequent years, if applicable.

W2 Facsimile

Enter the wage information directly from a Form W-2 in this section. If the client has received more than one W-2, enter the wage information in additional units of this input screen.

This field is required for electronic filing. Enter the control number.

Enter the State ID number, as shown on the W-2, if there is state or local withholding.

Notes

  • The IRS requires that this field be completed for electronic filing purposes. See 1040 - US ELF: Error Code FW2-010 for more information.
  • If the W-2 does not display a state ID number, enter the federal employer ID number in this field.

Indiana returns only: The State ID number must be between 10 and 14 digits. If necessary, add leading zeros. For example, 12345678 should be entered as 0012345678. If the W-2 does not show a State ID number, enter the federal employer ID number in this field. This information is required by the Indiana Department of Revenue for returns processed electronically.

When you enter an amount in this field, regardless of the method of data entry, UltraTax CS automatically calculates Social Security wages, Social Security withholding, Medicare wages, and Medicare withholding based on IRS guidelines. Note that Social Security wages are used to calculate self-employment tax, when applicable. UltraTax CS also adds the wage amount to the state wages. You can override any of these calculated amounts, if needed.

UltraTax CS completes these fields automatically during data entry if the Automatically complete FICA and Medicare wage (Screen W2) checkbox is marked in Setup > 1040 Individual > Other Return Options button > Other tab. You can override them here, if necessary.

UltraTax CS completes these fields automatically when data is entered in the applicable wage field. You can override them here, if necessary.

Note: UltraTax CS will automatically include an additional Medicare tax of 0.9% on social security wages in excess of $200,000.

This information is used to calculate self-employment tax, when applicable. Amounts entered for SS tips will also be used to calculate Form 4137.

The amount entered here transfers to the Wages and salaries line on Form 1040, Page 1 to Schedule SE, when appropriate. If the taxpayer is not subject to self-employment tax, amounts entered in this field will be used to calculate the amount of Social Security tax on unreported tip income on Form 4137.

Enter the 16-digit code reported on the W-2. The code must be composed of digits 0-9 or letters A-F.

This amount is part of the calculation for Form 2441. If you enter an amount in this field and Screen Cr (in the Credits folder) does not have Form 2441 information, the amount reports as a taxable dependent care benefit on Form 1040, line 7, Wages, salaries, tips, etc., and “DCB” prints on that line.

A return containing an individual taxpayer identification number (ITIN) should not receive Forms W-2 containing an ITIN. If the Social Security number shown on Form W-2 does not match the identifying number of the taxpayer shown in Screen 1040, enter the Social Security number exactly as it appears on the taxpayer's copy.

The amount you enter here is treated as a reduction to qualifying earned compensation for purposes of the IRA contribution, earned income, child tax credits, and making work pay calculations.

Use the attached statement dialog to provide specific information required in Box 12. The available codes are listed in the table that follows.

Note: Amounts automatically transfer to the appropriate line on the return, when applicable. See the Destination on Return column in the table that follows.

Code Description Destination on return
A Uncollected Social Security tax on tips Form 1040, line 62, reported as "UT"; Form 2210F; Schedule 8812; Child Tax Credit Worksheets; Excess Social Security & RRTA Tax Withholding Worksheet; Tax Projection Worksheet
B Uncollected Medicare tax on tips Form 1040, line 62, reported as "UT"; Form 2210F; Schedule 8812; Child Tax Credit Worksheets; Tax Projection Worksheet
C Cost of group term life insurance coverage over $50000 N/A
D Section 401(k) contributions Form 8880, line 2; Keogh/SEP/Simple Worksheet (when applicable)
E Section 403(b) contributions Form 8880, line 2; Keogh/SEP/Simple Worksheet (when applicable)
F Section 408(k)(6) contributions Form 8880, line 2; Keogh/SEP/Simple Worksheet (when applicable)
G Section 457(b) contributions Form 8880, line 2
H Section 501(c)(18)(D) contributions Form 1040, line 36; Form 8880, line 2; Adoption Credit Modified AGI Worksheet, line 5; IRA Worksheet; Keogh/SEP/Simple Worksheet; Student Loan Worksheet, line 4; Tuition and Fees Deduction Worksheet, line 3; Worksheet 1 for Social Security Recipients Who Contribute To an IRA, line 5
J Sick pay not includable as income N/A
K Tax on excess golden parachute payments Form 1040, line 62, reported as "EPP"
L Nontaxable part of employee business expense Form 2106
M Uncollected Social Security or RRTA tax on group term life insurance Form 1040, line 62, reported as "UT"; Form 2210F; Schedule 8812; Child Tax Credit Worksheets; Excess Social Security & RRTA Tax Withholding Worksheet; Tax Project Worksheet
N Uncollected Medicare tax on group term life insurance Form 1040, line 62, reported as "UT"; Form 2210F; Schedule 8812; Child Tax Credit Worksheets; Tax Project Worksheet
P Excludable moving expense reimbursements Form 3903, line 4
Q Nontaxable combat pay Form 2441, Schedule 8812, Child Tax Credit Worksheets, Earned Income Credit Worksheets, General Sales Tax Deduction Worksheet
R Employer Contributions to Medical Savings Account Form 8853, line 1; Form 8889
S Employee salary reduction section 408(p) contributions Form 8880, line 2, Keogh/SEP/Simple Worksheet (when applicable)
T

Employer payments under adoption

Note: Also enter in Screen 8839

Form 1040, line 7, reported as "AB"; Form 2441, lines 4, 5, 18, and 19; Form 8815, line 9; Form 8839, line 22; PALMAGI Worksheet; Taxable Social Security Lump Sum Worksheets 1 & 4; Worksheet 1 for Social Security Recipients Who Contribute to an IRA, line 3; Wage Report
V Income from exercise of nonstatutory stock option(s) N/A
W

Employer contributions to health savings account

Note: Also include in Screen 5498SA, box 2, Total HSA/MSA contributions for 2017 and complete data entry for Form 8889.

Form 8889
Y Deferral under sect 409A nonqual deferred compensation plan N/A
Z Income under sect 409A nonqual deferred compensation plan N/A
AA Designated Roth contribution to a section 401(k) plan Keogh/SEP/Simple Worksheet (when applicable); Form 8880, line 2
BB Designated Roth contribution to a section 401(k) agreement Keogh/SEP/Simple Worksheet (when applicable); Form 8880, line 2
DD Cost of Employer-sponsored health coverage N/A
EE Designated Roth contribution to a section 457(b) plan Form 8880, line 2

Enter X in this field only if the taxpayer is a statutory employee whose earnings are subject to Social Security and Medicare taxes but not subject to federal withholding. Enter the wages in the Wages, tips field in this screen. These amounts transfer to the wages and salaries line of Form 1040, Page 1 and on the Salaries and Wages Report. If there are expenses to be claimed against this wage income, enter expense information in Screen C and select the correct W-2 in the W-2 unit # for statutory employee field, or enter statutory wage amounts in the Statutory employee wages (Force) field. The salaries and wages line of Form 1040 is reduced by the amount of statutory wages included on Schedule C and reports the net statutory employee wages after related expenses on Form 1040, line 12.

Enter X if the taxpayer is covered under a retirement plan. If this field is marked, UltraTax CS will treat the taxpayer or spouse as covered by a qualified retirement plan for application of the AGI limitation when calculating the deductible IRA contribution. See Screen IRA located in the Retirement folder for additional information about IRAs.

Enter the code that represents the applicable Box 14, Other item, or use the fieldview to make your selection. The available codes are listed in the table that follows.

Note: Amounts automatically transfer to the appropriate line on the return, when applicable. See the Destination on return column in the table that follows. Please see the state specific instructions for proper use of other codes provided.

Code Description Destination on return
1 Auto N/A
2 Housing allowance

Form 2555 Worksheet; Form 2441; Child Tax Credit Worksheet; Earned Income Credit Worksheet; SE Earnings Worksheet; SE Health Worksheet; WI Schedule H, line 11f; WI Schedule FC, line 9n

Note: If 1 is entered as the wage code, this amount is reported on Clergy Worksheet 1. Additional data is required in Screen Clergy, located in the Taxes folder, to accurately calculate exclusion, excess allowance, and ramifications to self-employment tax. For additional information, refer to the help for Screen Clergy by pressing F1 from any field in that screen.

3 Medical insurance premiums

Schedule A, line 1 or Self-Employed Health Insurance Deduction Worksheet, line 1, when Form / Sch = K1 (S-Corporation)

Note: If shareholder health insurance premiums on the W2 include amounts paid for specified premiums (i.e. premiums purchased via the Marketplace), enter the type code, form, and unit on the related W2 box 14 to link the 1095A amounts with the correct activity. Any amounts entered in W2, box 14 for medical insurance are treated as nonspecified premiums. Therefore, if all premiums are specified premiums, the W2 box 14 code 3 amount column should be blank, while the type code, form and unit fields should remain to ensure the correct linking behavior to the 1095A.

4 Other reimbursed expenses N/A
5 State disability insurance withholding State postal codes CA, NJ, NY, RI, and WA: Schedule A, line 5

All others state postal codes: Schedule A, line 8

6 Strike pay State postal code CA: California Form 3506, lines 4 and 5
7 SUB pay N/A
8 State unemployment fund contributions

State postal codes CA, NJ, PA and AK: Schedule A, line 5

All other state postal codes: Schedule A, line 8

NJ code 8 and code 39 amounts will be combined on the NJW2 screen as UI/WF/SWF

9 Union dues Schedule A, line 21; NOL Worksheet
10 IRC Section 414(h) contributions
11 IRC Section 125 flexible benefits prog Michigan Household Income Other Nontaxable Income on Forms MICR, MICR-2, and MICR-7
12 NYC member's health & welfare surcharge N/A
13 Tier 1 RRTA tax withheld Excess Social Security & RRTA Tax Withholding Worksheet; Schedule 8812; Child Tax Credit Worksheets; State Postal Code MO
14 Tier 2 RRTA tax withheld State Postal Code MA; State Postal Code MO
15 Maine state retirement contribution Maine Sch 1 and 2, line 1c
16 Nontaxable IRC Section 414(h) contributions: NY N/A
17 Nontaxable IRC Section 125: NY
18 Educational assistance payments: MN MN: Included in household income: Screen MNGen
19 RR Unemployment Act sick pay in W-2 box 1 State Postal Code CA, IN, MO
20 Maryland state pick-up amount. Do not enter either the pick-up amounts in local withholding Box 19 or the state pick-up code "STP" for Box 20. State Postal Code MD
21 Massachusetts pension contribution Form 1, lines 11a and 11b.

Form 1 NR/PY, lines 15a and 15b.

22 Adjustment for resident or gross wages everywhere: NJ Resident: 1040-NJ, page 2, Wages

Nonresident: 1040NR-NJ, Federal column, Wages

Part-year resident: 1040-NJ, Page 3, included as "everywhere" wages with all "everywhere" income on line 8.

23 PY/NR only; adjustment for in-state source wages: NJ Resident: N/A

Nonresident: 1040NR-NJ, Page 2, New Jersey Source wages

Part-year resident: 1040-NJ, Page 2, Wages

24 Resident/PY only; Adjustment for other state taxable wages: AL Alabama Schedule W-2, Additional taxable wages - other states
25 Medical Portion IRC 125 benefits Subj 2% gross Inc: NJ Nonresident: 1040NR-NJ, Page 1

Part-year resident: 1040-NJ, Page 2

26 Charitable Contributions (50% limitation) Schedule A, gifts by cash or check
27 National Guard or Reserve Component Members ded: IN IN Schedule 1 or Schedule D
28 Armed forces recruitment, sign up or retention bonus: KS KS SCH S Part A, line A21
29 KPERS contribution Schedule S, line A2, Contributions to all KPERS (Kansas Public Employee's Retirement Systems)
31 Medical care ins pd, partial employer contribution: WI Wisconsin Medical Insurance Worksheet, Worksheet 2 - Others, line 3
32 Medical care ins pd, no employer contribution: WI Wisconsin Medical Insurance Worksheet, Worksheet 2 - Others, line 5
33 Eligible for small business deduction Form IT SBD, Small Business Investor Income Deduction Schedule
34 Family leave insurance (FLI): NJ Federal Schedule A, line 5
35 Church employee/Clergy subject to MTA: NY Self-employment income subject to the NY MTA tax.
36 Military wages attributable to overseas service: MD Resident and part-year returns, Form 502, other subtractions, code 'P' and the Military Overseas Income Worksheet for any portion of military wages entered on federal Screen W2.
37 Nonresident active service military pay: MN Minnesota, Schedule M1M, Page 2
38 Nonresident military income: MD Form 502, line 12
39 WF/SWF withholding: NJ

Schedule A, line 8

NJ code 8 and code 39 amounts will be combined on the NJW2 screen as UI/WF/SWF

40 Paid Family Leave program: CA Schedule A, line 5
41 IIM - Married DPR Wage adj When two single returns are combined and an amount using code 41 is present, Box 1 wages in the combined return are reduced, not less than zero, by this amount. This imputed income married code is intended for CA, IA, IL, NY, and VT domestic partner returns.
42 IIM - Married DPR Income adj When two single returns are combined and an amount using code 42 is present, the combined federal return automatically creates an Other adjustment to income equal to this amount. This imputed income married code is intended for CT, DE, and OR domestic partner returns.
43 IIM - Married DPR State adj When two single returns are combined and an amount using code 43 is present, the combined federal return is not adjusted for the amount. Instead the state return is where the adjustment to federal income is made. This imputed income married code is intended for DC and HI domestic partner returns.
44 RRTA compensation Form 8959, line 14
45 Medicare RRTA tax withheld N/A
46 Additional Medicare RRTA tax withheld Form 8959, line 23
48 Long-Term care premiums – Taxpayer Schedule A, line 1 or Self-Employed Health Insurance Deduction Worksheet, line 2, when Form / Sch = K1 (S-Corporation)
49 Long-Term care premiums – Spouse Schedule A, line 1 or Self-Employed Health Insurance Deduction Worksheet, line 2, when Form / Sch = K1 (S-Corporation)
50 Long-Term care premiums – Dependent age 40 & younger Schedule A, line 1 or Self-Employed Health Insurance Deduction Worksheet, line 2, when Form / Sch = K1 (S-Corporation)
51 Long-Term care premiums – Dependent age 41 to 50 Schedule A, line 1 or Self-Employed Health Insurance Deduction Worksheet, line 2, when Form / Sch = K1 (S-Corporation)
52 Long-Term care premiums – Dependent age 51 to 60 Schedule A, line 1 or Self-Employed Health Insurance Deduction Worksheet, line 2, when Form / Sch = K1 (S-Corporation)
53 Long-Term care premiums – Dependent age 61 to 70 Schedule A, line 1 or Self-Employed Health Insurance Deduction Worksheet, line 2, when Form / Sch = K1 (S-Corporation)
54 Long-Term care premiums – Dependent age 71 & older Schedule A, line 1 or Self-Employed Health Insurance Deduction Worksheet, line 2, when Form / Sch = K1 (S-Corporation)
55 Local service tax (LST): PA Schedule A, line 21 as “Occupational Tax Payments”

For California returns: Amounts included in federal Schedule A, Line 5 for Code 5, State Disability Insurance, are reported as adjustments (reductions) to federal itemized deductions on the California return.

Amounts included in federal Schedule A, Line 5 for Code 8, State unemployment fund contribution, Code 34, Family leave insurance (NJ), and Code 40, Paid Family Leave program (CA), are treated as deductible for California purposes. Therefore, no adjustments are made to federal itemized deductions reported on the California return for these amounts.

For New Jersey returns, enter the W-2 reported other reimbursements that may be excluded when calculating wage income for New Jersey in the attached statement dialog. Use code 4 to designate these amounts as excludable reimbursements. In addition, enter amounts withheld for New Jersey disability insurance (code 5) and amounts withheld for the New Jersey Workforce Development Partnership Fund and the Health Care Subsidy Fund (code 8). Excess contributions are calculated from the amounts entered here.

For New York returns, use the attached statement dialog to enter amounts for which New York requires an adjustment. Enter public employee 414(h) retirement contributions with code 10. Enter the IRC 125 amount that was deducted or deferred under a flexible benefits program established by the City of New York with code 11. Enter the amount deducted for health insurance and the welfare benefit fund surcharge with code 12. These amounts appear as New York additions on Form IT-201/203 and if a city nonresident earnings tax return is being prepared, as additions to wages. If the amount that appears as public employee 414(h) retirement contributions should not be added back to New York income, use code 16 to designate the amount as nontaxable. Likewise, if the amount entered represents nontaxable IRC Section 125 flexible benefits, use code 17 to designate the amount as nontaxable to New York. Amounts coded 16 or 17 do not appear as New York additions on Form IT-201/203. The Form / Unit field in this statement dialog is not applicable to the UltraTax/1040-NY application. Leave this field blank. Use codes 16 and 17 for section 414(h) and section 125 amounts, respectively, that should not appear as additions to the New York return.

For Indiana returns, for income on federal Screen W2 with wage code 2 (military) or 4 (National Guard), enter code 27 in Box 14 to enter the portion of military wages eligible for the National Guard or Reserve Component Members deduction to report on Indiana Schedule 1 or Schedule D.

Note: Codes 16 and 17 are reported on the federal return when applicable.

For Michigan returns, items coded 11, IRC Section 125 flexible benefits program, will be included in the nontaxable income calculation of household income used for Michigan credits.

Select 1 (Yes) if everyone claimed on the tax return had minimum essential health care coverage for the entire year. UltraTax CS will mark the box on Form 1040, line 61 for Full-year coverage. Select 2 (No) if anyone in the family did not have coverage for the entire year. This field is available on Screens W2, 1099R, SSA-1099, C, F, K1-3, and Coverage. If you make a selection in this field, no selection is required in any other input screen. Details of partial coverage or exemption from coverage can be entered on Screen Coverage in the Health Care folder. If this field is blank in all locations, UltraTax/1040 defaults to no minimum essential coverage and sends a critical diagnostic.

Note: Minimum essential health care coverage is defined in the Form 8965 instructions. Generally, minimum coverage is coverage that is part of a government-sponsored program, from an employer, or through a plan purchased in the individual market. For more information, see the Form 8965 instructions and Individual Shared Responsibility - Minimum Essential Coverage.

State and City Information

Enter the appropriate information in the following fields.

If you are processing a state return, enter the two-character abbreviation for the state to which this unit belongs. This code is used by the various state applications to help determine in-state and out-of-state amounts. The resident state will pick up all wages. The nonresident states only pick up wages designated with the nonresident state postal code.

Note: A postal code entry is required for proper state processing.

See State fields in UltraTax/1040 for more information.

Enter the code to designate the special circumstance with this W-2. The codes that are available in this field are specific to the state postal code entered in the State field. If state use codes are not applicable to the entered state, this field will be disabled (shaded) in most instances (see the following note for a description of exceptions). Enter a code as applicable for processing the 1040 state return. The state use codes and applicable states are listed in the table that follows.

Note: In the following table, states marked with an asterisk (*) denote state use codes that are available when that state's return is attached to the open client, even when that particular state postal code is not entered in the corresponding State field.

Code Description State
1 Cost of Living Allowance (COLA) HI
2 Wages of Native American who lives/works on reservation AZ, CO, CT, IA, ID, KS, LA, MI, MN, MS, MT, ND, NE, NM, OK, OR, UT, WI
4 Active military qualified for deduction IA, ID, LA, ME, MN, MO, MS, OR, VA, VT, WV
5 Excludable from total sources CA*
6 Military reserve qualified for deduction ID, HI, MN, ND, VT, WI
7 Compensation earned by patient with Hansen's disease HI
9 Employee's Retirement System (ERS) HI
10 Combat zone wages NY, PA
11 Box 11 qualifies for pension exclusion NY
12 National Guard Deduction OR
13 Federal and/or state employee wages VA
14 KPERS Disability KS
15 Box 11 qualifies for government pension exclusion NY
17 Excludable from MA wages MA*
18 Local wages qualify for county credit on IN return. Use this code to include the local wages in Box 18 in the calculation of the Indiana Credit for Local Taxes Paid Outside Indiana Worksheet. Use Screen INCr to force the amount to use in the calculation of the credit to offset county income tax. KY, MI, MO, OH

Notes

  • For Iowa returns, enter State use code 4 in Screen W2 for wages of active duty military members. UltraTax CS makes the appropriate adjustment for the taxpayer (or spouse, if applicable) on the other adjustments line of IA Form 1040.
  • For Kansas returns, enter State use code 14 in Screen W2 for KPERS disability payments. UltraTax CS makes the appropriate adjustment on Kansas Schedule S.
  • For Minnesota returns, enter State use code 4 in Screen W2 for wages of active military members who are stationed outside of their resident state and also have Minnesota withholding, or if the taxpayer received pay for federal active duty performed outside of Minnesota. Use code 6 for national guard and reservists who received state or federal pay for active service performed in Minnesota. 
  • For North Carolina returns, enter State use code 3 in Screen W2 for severance wages received as a result of permanent involuntary termination from employment. In the State wages field, enter the amount of regular wages. UltraTax CS uses the difference between the federal wages and the state wages as the deduction for severance wages on Form D-400 subject to limitation.
  • For Vermont returns, enter State use code 4 in Screen W2 for wages of active military members who were stationed outside of Vermont. With State use code 4 entered, UltraTax CS makes the appropriate adjustment on Vermont Form IN-113.
  • For Vermont returns, enter State use code 6 in Screen W2 for wages of National Guard or U.S. Reserve training pay earned in Vermont. With State use code 6 entered, a portion of the taxpayer's wages are exempt and UltraTax CS makes the appropriate adjustment on Vermont Form IN-113.
  • For Virginia returns, enter State use code 13 in Screen W2 for wages of a qualified federal or state employee. UltraTax CS makes the appropriate subtraction, using code 39, if the taxpayer (or spouse, if applicable) qualifies.

Enter up to four items of wage information for state and local taxing authorities that are reported on Form W-2.

Notes

  • New Jersey wages are calculated using state wage amounts with Postal Code NJ and adjustments entered as Code 22 and/or Code 23. UltraTax CS does not calculate New Jersey wages by adding all state wage figures. If a New Jersey state wage amount is not present in Screen W2, the federal wage amount will be used in conjunction with Box 14 code 22 amounts to calculate "everywhere" wages.
  • Electronic filing: When processing a W-2 with more than one locality for a state, also enter the state postal code in Box 15 to accompany the additional localities. The local wage, code, and withholding information will not be included in the e-file record if the corresponding state postal code in Box 15 is blank.

Amounts that you enter in these fields transfer to Schedule A as well as the applicable state and city returns.

When Box 5 Medicare wages is entered or modified, if the State entered in the first line of the W2, Box 15 equals OH or PA, then the first line of Box 18, Local wages is automatically completed with the amount of Box 5, Medicare wages. If the State entered is not OH or PA but the first line of Box 20 has a locality code entered, then the value of Box 1 Wages is used to automatically complete Box 18 Local wages

Enter a state postal code in the State field in box 15 to activate the locality codes in the corresponding Code field. If locality codes are not applicable to the entered state, locality codes will not be available.

Local withholding transfers to Schedule A, line 5 as city withholding for all codes with the following exceptions.

Code Description
27M NYC 1127 payments to Schedule A, line 21 as NYC 1127 payments.
27T NYC 1127 payments to Schedule A, line 5 as NYC 1127 taxes.
SDI California state disability insurance, to Schedule A, line 5 as State Disability fund withholding.
SPU Code "SPU" is used only on Screen 1099R city code box 14 so the pick-up reported on Form 1099R can be entered in box 15. Do not enter Maryland state pick-up using this local withholding code on Screen W2. Pick-up reported on a W-2 must be entered in box 14 with state use code 20.
VP Voluntary Plan Disability withholding is not reported anywhere on the federal return.

Notes

  • Pennsylvania local city withholding entered here will be transferred to the local city return being filed. If two city returns are being filed, use the Payments allocated by amounts field in UltraTax/1040-PA Screen EITInc to allocate withholding to the appropriate Local Earned Income Tax return.
  • If W-2 contains Colorado local withholding, it is an occupational tax and not an income tax. Enter this amount on federal Schedule A in the Other Expenses statement dialog in the section Miscellaneous Expenses: Subject to 2% Limitation. See the Colorado Department of Revenue Income Tax, FYI #4 - State Income Tax Deduction Addback "Common Questions" on the last page of the FYI for additional guidance. This FYI can be accessed on the Colorado Department of Taxation website through the tax subject help index. Use the link labeled "104, FYI Publications."

Electronic filing note: When processing a W-2 with more than one locality for a state, also enter the state postal code in Box 15 to accompany the additional localities. The local wage, code, and withholding information will not be included in the e-file record if the corresponding state postal code in Box 15 is blank.

For Ohio School District withholding, enter the four-digit code, or press F4 to view a list of taxing school district codes.

Electronic filing note: When processing a W-2 with more than one locality for a state, also enter the state postal code in Box 15 to accompany the additional localities. The local wage, code, and withholding information will not be included in the e-file record if the corresponding state postal code in Box 15 is blank.

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