Payroll Services

W2 Explained

Notice to Employee

Notice to Employee

Refund. Even if you do not have to file a tax return, you should file to get a refund if box 2 shows Federal income tax withheld, or if you can take the earned income credit.

Earned income credit (EIC). You must file a tax return if any amount is shown in box 9.

You may be able to take the EIC for 2003 if: (a) you do not have a qualifying child and you earned less than $11,230 ($12,230 if married filing jointly), (b) you have one qualifying child and you earned less than $29,666 ($30,666 if married filing jointly), or (c) you have more than one qualifying child and you earned less than $33,692 ($34,692 if married filing jointly). You and any qualifying children must have valid social security numbers (SSNs). You cannot claim the EIC if your investment income is more than $2,600. Any EIC that is more than your tax liability is refunded to you, but only if you file a tax return. If you have at least one qualifying child, you may get as much as $1,528 of the EIC in advance by completing Form W-5, Earned Income Credit Advance Payment Certificate, and giving it to your employer.

Clergy and religious workers. If you are not subject to social security and Medicare taxes, see Pub. 517, Social Security and Other Information for Members of the Clergy and Religious Workers.

Corrections. If your name, SSN, or address is incorrect, correct Copies B, C, and 2 and ask your employer to correct your employment record. Be sure to ask the employer to file Form W-2c, Corrected Wage and Tax Statement, with the Social Security Administration (SSA) to correct any name, SSN, or money amount error reported to the SSA on Form W-2. If your name and SSN are correct but are not the same as shown on your social security card, you should ask for a new card at any SSA office or call 1-800-772-1213.

Credit for excess taxes. If you had more than one employer in 2003 and more than $5,394.00 in social security and/or Tier 1 railroad retirement (RRTA) taxes were withheld, you may be able to claim a credit for the excess against your Federal income tax. If you had more than one railroad employer and more than $3,160.50 in Tier 2 RRTA tax was withheld, you also may be able to claim a credit. See your Form 1040 or 1040A instructions and Pub. 505, Tax Withholding and Estimated Tax.

(Also see Instructions on back of Copy C.)

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Instructions
(Also see Notice to Employee on back of Copy B.)

Box 1. Enter this amount on the wages line of your tax return.

Box 2. Enter this amount on the Federal income tax withheld line of your tax return.

Box 8. This amount is not included in boxes 1, 3, 5, or 7. For information on how to report tips on your tax return, see your Form 1040 instructions.

Box 9. Enter this amount on the advance earned income credit payments line of your Form 1040 or 1040A.

Box 10. This amount is the total dependent care benefits your employer paid to you or incurred on your behalf (including amounts from a section 125 (cafeteria plans)). Any amount over $5,000 also is included in box 1. You must complete Schedule 2 (Form 1040A) or Form 2441, Child and Dependent Care Expenses, to compute any taxable and nontaxable amounts.

Box 11. This amount is: (a) reported in box 1 if it is a distribution made to you from a nonqualified deferred compensation or nongovernmental section 457 plan or (b) included in box 3 and/or 5 if it is a prior year deferral under a nonqualified or section 457 plan that became taxable for social security and Medicare taxes this year because there is no longer a substantial risk of forfeiture of your right to the deferred amount.

Box 12. The following list explains the codes shown in box 12. You may need this information to complete your tax return. Elective deferrals (codes D, E, F, G, H, and S) under all plans are generally limited to $12,000 ($15,000 for section 403(b) plans, if you qualify for the 15-year rule explained in Pub. 571). However, if you were at least age 50 in 2003, your employer may have allowed an additional deferral of up to $2,000 ($1,000 for section 401(k)(11) and 408(p) SIMPLE plans). This additional deferral amount is not subject to the overall limit on elective deferrals. For code G, the limit on elective deferrals may be higher for the last 3 years before you reach retirement age. Contact your plan administrator for more information. Amounts in excess of the overall elective deferral limit must be included in income. See the ³Wages, Salaries, Tips, etc.² line instructions for Form 1040.

Note: If a year follows code D, E, F, G, H, or S, you made a make-up pension contribution for a prior year(s) when you were in military service. To figure whether you made excess deferrals, consider these amounts for the year shown, not the current year. If no year is shown, the contributions are for the current year.

A - Uncollected social security or RRTA tax on tips (Include this tax on Form 1040. See "Total Tax" in the Form 1040 instructions.)

B - Uncollected Medicare tax on tips (Include this tax on Form 1040. See "Total Tax" in the Form 1040 instructions.)

C - Taxable cost of group-term life insurance over $50,000 (included in boxes 1, 3 (up to social security wage base), and 5)

D - Elective deferrals to a section 401(k) cash or deferred arrangement. Also includes deferrals under a SIMPLE retirement account that is part of a section 401(k) arrangement.

E - Elective deferrals under a section 403(b) salary reduction agreement

F - Elective deferrals under a section 408(k)(6) salary reduction SEP

G - Elective deferrals and employer contributions (including nonelective deferrals) to a section 457(b) deferred compensation plan

H - Elective deferrals to a section 501(c)(18)(D) tax-exempt organization plan (see "Adjusted Gross Income" in the Form 1040 instructions for how to deduct)

J - Nontaxable sick pay (not included in boxes 1, 3, or 5)

K - 20% excise tax on excess golden parachute payments (see "Total Tax" in the Form 1040 instructions)

L - Substantiated employee business expense reimbursements (nontaxable)

M - Uncollected social security or RRTA tax on taxable cost of group-term life insurance over $50,000 (former employees only) (see "Total Tax" in the Form 1040 instructions)

N - Uncollected Medicare tax on taxable cost of group-term life insurance over $50,000 (former employees only) (see "Total Tax" in the Form 1040 instructions)

P - Excludable moving expense reimbursements paid directly to employee (not included in boxes 1, 3, or 5)

R - Employer contributions to your Archer (MSA) (see Form 8853, Archer MSAs and Long-Term Care Insurance Contracts)

S - Employee salary reduction contributions under a section 408(p) SIMPLE (not included in box 1)

T - Adoption benefits (not included in box 1). You must complete Form 8839, Qualified Adoption Expenses, to compute any taxable and nontaxable amounts.

V - Income from exercise of nonstatutory stock option(s) (included in boxes 1, 3 (up to social security wage base), and 5)

Note: Keep Copy C of Form W-2 for at least 3 years after the due date for filing your income tax return. However, to help protect your social security benefits, keep Copy C until you begin receiving social security benefits, just in case there is a question about your work record and/or earnings in a particular year. Review the information shown on your annual (for workers over 25) Social Security Statement.

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Box a: Control Number
The sequential number in the total count of W2s issued by TSRI.

Box b. Employer ID number.
This is the federal identification number for The Scripps Research Institute.

Box c. Employer's name, address, and zip code.
This is the mailing address for The Scripps Research Institute.

Box d. Employee's social security number.
This is the social security number you provided. It should match the number shown on the card you received form the Social Security Administration. If it is not a match, contact the payroll office.

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Box e. Employee's name address, and zip code.
This is your name as it appears on our records. Your name as shown should match the name on the card that you received from the Social Security Administration. If it is not a match, please contact the payroll office. This is the most current address that we have on file for you. If it is not correct, please contact the payroll office.

Box 1. Wages, tips, other compensation.
Total compensation paid to you during the calendar year. This amount includes taxable benefits such as Exc Grp Life, Domestic Partner benefits, and includible relocation expenses. This amount excludes voluntary retirement plan deductions (403(b) and 457(b) salary reductions), pretax medical, dental, life, health care and dependent care spending accounts, pretax transit benefits, and excludible moving expense reimbursements.

Box 2. Federal income tax withheld.
Total amount of federal income tax (FIT) withheld from your wages for the calendar year. It is calculated using the current W4, Employee's Withholding Allowance Certificate, that you filed with the payroll office.

Box 3. Social security wages
Total compensation paid to you during the calendar year that is subject to social security tax.. This amount includes taxable benefits such as Excess Group Life, Domestic Partner benefits, and includible relocation expenses. This amount excludes deductions for pretax medical, dental, life, health care and dependent care spending accounts, pretax transit benefits, and excludible moving expense reimbursements.

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Box 4. Social security tax withheld.
Total amount of of social security tax (FICA-OA) withheld from your wages for the calendar year. It is calculated at 6.2% of the wages shown in box 3.

Box 5. Medicare wages and tips.
Total compensation paid to you during the calendar year that is subject to medicare tax. This amount includes taxable benefits such as Excess Group Life, Domestic Partner benefits, and includible relocation expenses. This amount excludes deductions for pretax medical, dental, life, health care and dependent care spending accounts, pretax transit benefits, and excludible moving expense reimbursements.

Box 6. Medicare tax withheld.
Total amount of medicare tax (FICA-HI) withheld from your wages for the calendar year. It is calculated at 1.45% of the wages shown in box 5.

Box 7. Social security tips.
Not applicable.

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Box 8. Allocated tips.
Not applicable.

Box 9. Advance EIC payment.
This is the total amount of the Earned Income Credit (EIC) paid to you. It is calculated based upon the current W5, Earned Income Credit Advance Payment Certificate, that you filed with the payroll office. To see if you qualify, see the Notice to Employees on the back of Copy B of your W2.

Box 10. Dependent care benefits.
This is the amount you elected to contribute to the Dependent Care Spending Account for the calendar year. It is not included in the wages shown in boxes 1, 3, 5, 16, and 18.

Box 11. Nonqualified plans.
Not applicable.

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Box 12 Code. See instructions for box 12 on the back of Copy C of your W2.
Codes:
C: Cost of group-term life insurance over $50,000 (included in boxes 1, 3, and 5)
E: Elective deferrals under a section 403(b) salary reduction agreement. It is not included in the wages shown in boxes 1and 16.
G: Elective deferrals and employer contributions to a section 457(b) deferred compensation plan. It is not included in the wages shown in boxes 1 and 16.
J: Nontaxable sick pay. It is not included in boxes 1, 3, 5, 16, and 18.
P: Excludible moving expense reimbursements paid directly to the employee. It is not included in boxes 1, 3, 5, 16, and 18.

Box 13.
Statutory employee: Not Applicable.
Retirement plan: "Y" will be printed if the employee is a participant in the retirement plans. Special limits may apply to the amount of IRA contributions the employee may deduct.
Third-party sick pay: "Y" will be printed if the wages shown in boxes 1, 3, 5, or 16 were paid as a result of a covered disability. This is taxable income to you.

Box 14. Other.
Not Applicable.

Box 15. State.
The name of the state in which you earned wages.

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Box 16. State wages, tips, etc.
Total compensation paid to you during the calendar year. This amount includes taxable benefits such as Excess Group Life, Domestic Partner benefits, and includible relocation expenses. Domestic partner benefits may be excluded if you have filed a certificate with the CA state registry. This amount excludes voluntary retirement plan deductions (403(b)and 457(b) salary reductions), pretax medical, dental, life, health care and dependent care spending accounts, pretax transit benefits, and excludible moving expense reimbursements.

Box 17. State income tax.
Total amount of state income tax (CA PIT) withheld from your wages for the calendar year. It is calculated using the current DE4, Employee's Withholding Allowance Certificate, that you filed with the payroll office.

Box 18. Local wages, tips, etc.
Total compensation paid to you during the calendar year that is subject to state disability insurance tax. This amount includes taxable benefits such as Excess Group Life, Domestic Partner benefits, and includible relocation expenses. Domestic partner benefits may be excluded if you have filed a certificate with the CA state registry. This amount excludes deductions for pretax medical, dental, life, health care and dependent care spending accounts, pretax transit benefits, and excludible moving expense reimbursements.

Box 19. Local income tax.
Total amount of state disability insurance tax (CA SDI) withheld from your wages for the calendar year. It is calculated at .9% of the wages shown in box 18.

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Total Compensation Paid vs W-2 Wage and Tax Statement

The formulas listed below will assist the employee with the reconciliation of total compensation as shown on the last pay statement of the year to the amount shown in box 1, Wages, tips, other compensation, box 3, Social security wages, and box 5, Medicare Wages, of the annual W-2.

To calculate Box 1, Wages, tips, other compensation:

Step 1. Total YTD Employee Earnings from the last pay statement of the year

Step 2. PLUS (+) Total YTD Employee Taxable Benefits from the last pay statement of the year

Step 3. LESS (-) YTD AMOUNT of Employee Deductions from the last pay statement of the year for the following pretax deductions:

Step 4. EQUALS (=) Wages, tips, other compensation in box 1 of the W-2.

To calcualte box 3, Social Security Wages, and box 5, Medicare wages and tips:

Step 1. Total YTD Employee Earnings from the last pay statement of the year

Step 2. PLUS (+) Total YTD Employee Taxable Benefits from the last pay statement of the year

Step 3. LESS (-) YTD AMOUNT of Employee Deductions from the last pay statement of the year for the following pretax deductions:

Step 4. EQUALS (=) Social security wages (annual maximum for 2002 is $84,900) , box 3 of the W-2.
EQUALS (=) Medicare wages and tips, box 5 of the W-2.

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