File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

1040 X

2011 Taxes FileDo College Students Have To File TaxesTaxact 2012 Free Tax ReturnE File 2010 Taxes Online1040x Electronic FilingCan I File 2011 Taxes OnlineTaxes For College StudentsWww StatetaxformsPowered By Jforum Tax Help FreeFree 2010 TurbotaxAmended FormHow Can I Amend My Tax ReturnPrintable Irs Tax Forms 2011Amended 1040 FormFile 2009 Tax Return TurbotaxMilitary Tax ReturnsCheap State Tax Filing2010 Taxes Cheap 1099g Form W 2Free Internet Tax FilingTax Forms1040ez 2012 FormHow Can I File My 2012 Taxes OnlineState Tax Filing For Free2011 Tax 1040 FormFiling State Income Tax ReturnWhere Can I Do State Taxes For FreeAmend 2011 Tax Return Online10ez2012 Tax Tables FederalIrs Forms 1040ezIrs 1040 FormWhere Can I File 2012 Taxes OnlineTax Compliance Software2011 Federal Tax Form 1040Online Ez Form1040ez 2013 Form2010 Tax Returns OnlineFree Tax Preparation For Low Income1040ez Form DownloadForm 1040a

1040 X

1040 x 4. 1040 x   Communications and Air Transportation Taxes Table of Contents Uncollected Tax Report Communications TaxLocal-only service. 1040 x Private communication service. 1040 x Exemptions Credits or Refunds Air Transportation TaxesTransportation of Persons by Air International Air Travel Facilities Transportation of Property by Air Special Rules on Transportation Taxes Excise taxes are imposed on amounts paid for certain facilities and services. 1040 x If you receive any payment on which tax is imposed, you are required to collect the tax, file returns, and pay the tax over to the government. 1040 x If you fail to collect and pay over the taxes, you may be liable for the trust fund recovery penalty. 1040 x See chapter 14, later. 1040 x Uncollected Tax Report A separate report is required to be filed by collecting agents of communications services and air transportation taxes if the person from whom the facilities or services tax (the tax) is required to be collected (the taxpayer) refuses to pay the tax, or it is impossible for the collecting agent to collect the tax. 1040 x The report must contain the name and address of the taxpayer, the type of facility provided or service rendered, the amount paid for the facility or service (the amount on which the tax is based), and the date paid. 1040 x Regular method taxpayers. 1040 x   For regular method taxpayers, the report must be filed by the due date of the Form 720 on which the tax would have been reported. 1040 x Alternative method taxpayers. 1040 x   For alternative method taxpayers, the report must be filed by the due date of the Form 720 that includes an adjustment to the separate account for the uncollected tax. 1040 x See Alternative method in  chapter 11. 1040 x Where to file. 1040 x    Do not file the uncollected tax report with Form 720. 1040 x Instead, mail the report to: Internal Revenue Service Excise Tax Program SE:S:SP:EX MS C9-109 5000 Ellin Rd. 1040 x  Lanham, MD 20706 Communications Tax A 3% tax is imposed on amounts paid for local telephone service and teletypewriter exchange service. 1040 x Local telephone service. 1040 x   This includes access to a local telephone system and the privilege of telephonic quality communication with most people who are part of the system. 1040 x Local telephone service also includes any facility or services provided in connection with this service. 1040 x The tax applies to lease payments for certain customer premises equipment (CPE) even though the lessor does not also provide access to a local telecommunications system. 1040 x Local-only service. 1040 x   Local-only service is local telephone service as described above, provided under a plan that does not include long distance telephone service or that separately states the charge for local service on the bill to customers. 1040 x Local-only service also includes any facility or services provided in connection with this service, even though these services and facilities may also be used with long-distance service. 1040 x Private communication service. 1040 x   Private communication service is not local telephone service. 1040 x Private communication service includes accessory-type services provided in connection with a Centrex, PBX, or other similar system for dual use accessory equipment. 1040 x However, the charge for the service must be stated separately from the charge for the basic system, and the accessory must function, in whole or in part, in connection with intercommunication among the subscriber's stations. 1040 x Teletypewriter exchange service. 1040 x   This includes access from a teletypewriter or other data station to a teletypewriter exchange system and the privilege of intercommunication by that station with most persons having teletypewriter or other data stations in the same exchange system. 1040 x Figuring the tax. 1040 x   The tax is based on the sum of all charges for local telephone service included in the bill. 1040 x However, if the bill groups individual items for billing and tax purposes, the tax is based on the sum of the individual items within that group. 1040 x The tax on the remaining items not included in any group is based on the charge for each item separately. 1040 x Do not include in the tax base state or local sales or use taxes that are separately stated on the taxpayer's bill. 1040 x Exemptions Payments for certain services or payments from certain users are exempt from the communications tax. 1040 x Nontaxable service. 1040 x   Nontaxable service means bundled service and long distance service. 1040 x Nontaxable service also includes pre-paid telephone cards and pre-paid cellular service. 1040 x Bundled service. 1040 x   Bundled service is local and long distance service provided under a plan that does not separately state the charge for the local telephone service. 1040 x Bundled service includes plans that provide both local and long distance service for either a flat monthly fee or a charge that varies with the elapsed transmission time for which the service is used. 1040 x Telecommunications companies provide bundled service for both landlines and wireless (cellular) service. 1040 x If Voice over Internet Protocol service provides both local and long distance service and the charges are not separately stated, such service is bundled service. 1040 x   The method for sending or receiving a call, such as on a landline telephone, wireless (cellular), or some other method, does not affect whether a service is local-only or bundled. 1040 x Long distance service. 1040 x   Long distance service is telephonic quality communication with persons whose telephones are outside the local telephone system of the caller. 1040 x Pre-paid telephone cards (PTC). 1040 x   A PTC will be treated as bundled service unless a PTC expressly states it is for local-only service. 1040 x Generally, the person responsible for collecting the tax is the carrier who transfers the PTC to the transferee. 1040 x The transferee is the first person that is not a carrier to whom a PTC is transferred by the carrier. 1040 x The transferee is the person liable for the tax and is eligible to request a credit or refund. 1040 x For more information, see Regulations section 49. 1040 x 4251-4. 1040 x   The holder is the person that purchases a PTC to use and not to resell. 1040 x Holders are not liable for the tax and cannot request a credit or refund. 1040 x Pre-paid cellular telephones. 1040 x   Rules similar to the PTC rules described above apply to pre-paid cellular telephones. 1040 x The transferee is the person eligible to request the credit or refund. 1040 x Installation charges. 1040 x   The tax does not apply to payments received for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment. 1040 x However, the tax does apply to payments for the repair or replacement of those items incidental to ordinary maintenance. 1040 x Answering services. 1040 x   The tax does not apply to amounts paid for a private line, an answering service, and a one-way paging or message service if they do not provide access to a local telephone system and the privilege of telephonic communication as part of the local telephone system. 1040 x Mobile radio telephone service. 1040 x   The tax does not apply to payments for a two-way radio service that does not provide access to a local telephone system. 1040 x Coin-operated telephones. 1040 x   The tax for local telephone service does not apply to payments made for services by inserting coins in public coin-operated telephones. 1040 x But the tax applies if the coin-operated telephone service is furnished for a guaranteed amount. 1040 x Figure the tax on the amount paid under the guarantee plus any fixed monthly or other periodic charge. 1040 x Telephone-operated security systems. 1040 x   The tax does not apply to amounts paid for telephones used only to originate calls to a limited number of telephone stations for security entry into a building. 1040 x In addition, the tax does not apply to any amounts paid for rented communication equipment used in the security system. 1040 x News services. 1040 x   The tax on teletypewriter exchange service does not apply to charges for the following news services. 1040 x Services dealing exclusively with the collection or dissemination of news for or through the public press or radio or television broadcasting. 1040 x Services used exclusively in the collection or dissemination of news by a news ticker service furnishing a general news service similar to that of the public press. 1040 x This exemption applies to payments received for messages from one member of the news media to another member (or to or from their bona fide correspondents). 1040 x For the exemption to apply, the charge for these services must be billed in writing to the person paying for the service and that person must certify in writing that the services are used for an exempt purpose. 1040 x Services not exempted. 1040 x   The tax applies to amounts paid by members of the news media for local telephone service. 1040 x International organizations and the American Red Cross. 1040 x   The tax does not apply to communication services furnished to an international organization or to the American National Red Cross. 1040 x Nonprofit hospitals. 1040 x   The tax does not apply to telephone services furnished to income tax-exempt nonprofit hospitals for their use. 1040 x Also, the tax does not apply to amounts paid by these hospitals to provide local telephone service in the homes of their personnel who must be reached during their off-duty hours. 1040 x Nonprofit educational organizations. 1040 x   The tax does not apply to payments received for services and facilities furnished to a nonprofit educational organization for its use. 1040 x A nonprofit educational organization is one that satisfies all the following requirements. 1040 x It normally maintains a regular faculty and curriculum. 1040 x It normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. 1040 x It is exempt from income tax under section 501(a). 1040 x This includes a school operated by an organization exempt under section 501(c)(3) if the school meets the above qualifications. 1040 x Qualified blood collector organizations. 1040 x   The tax does not apply to telephone services furnished to qualified blood collector organizations for their use. 1040 x A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered with the IRS, and Registered by the Food and Drug Administration to collect blood. 1040 x Federal, state, and local government. 1040 x   The tax does not apply to communication services provided to the government of the United States, the government of any state or its political subdivisions, the District of Columbia, or the United Nations. 1040 x Treat an Indian tribal government as a state for the exemption from the communications tax only if the services involve the exercise of an essential tribal government function. 1040 x Exemption certificate. 1040 x   Any form of exemption certificate will be acceptable if it includes all the information required by the Internal Revenue Code and Regulations. 1040 x See Regulations section 49. 1040 x 4253-11. 1040 x File the certificate with the provider of the communication services. 1040 x An exemption certificate is not required for nontaxable services. 1040 x   The following users that are exempt from the communications tax do not have to file an annual exemption certificate after they have filed the initial certificate to claim an exemption from the communications tax. 1040 x The American National Red Cross and other international organizations. 1040 x Nonprofit hospitals. 1040 x Nonprofit educational organizations. 1040 x Qualified blood collector organizations. 1040 x State and local governments. 1040 x   The federal government does not have to file any exemption certificate. 1040 x   All other organizations must furnish exemption certificates when required. 1040 x Credits or Refunds If tax is collected and paid over for nontaxable services, or for certain services or users exempt from the communications tax, the collector or taxpayer may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. 1040 x Alternatively, the person who paid the tax may claim a refund. 1040 x For more information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. 1040 x Collectors. 1040 x   The collector may request a credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. 1040 x These requirements also apply to nontaxable service refunds. 1040 x Collectors using the regular method for deposits. 1040 x   Collectors using the regular method for deposits must use Form 720X to request a credit or refund if the collector has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. 1040 x Collectors using the alternative method for deposits. 1040 x   Collectors using the alternative method for deposits must adjust their separate accounts for the credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. 1040 x For more information, see the Instructions for Form 720. 1040 x Air Transportation Taxes Taxes are imposed on amounts paid for: Transportation of persons by air, Use of international air travel facilities, and Transportation of property by air. 1040 x Transportation of Persons by Air The tax on transportation of persons by air is made up of the: Percentage tax, and Domestic-segment tax. 1040 x Percentage tax. 1040 x   A tax of 7. 1040 x 5% applies to amounts paid for taxable transportation of persons by air. 1040 x Amounts paid for transportation include charges for layover or waiting time and movement of aircraft in deadhead service. 1040 x Mileage awards. 1040 x   The percentage tax may apply to an amount paid (in cash or in kind) to an air carrier (or any related person) for the right to provide mileage awards for, or other reductions in the cost of, any transportation of persons by air. 1040 x For example, this applies to mileage awards purchased by credit card companies, telephone companies, restaurants, hotels, and other businesses. 1040 x   Generally, the percentage tax does not apply to amounts paid for mileage awards where the mileage awards cannot, under any circumstances, be redeemed for air transportation that is subject to the tax. 1040 x Until regulations are issued, the following rules apply to mileage awards. 1040 x Amounts paid for mileage awards that cannot be redeemed for taxable transportation beginning and ending in the United States are not subject to the tax. 1040 x For this rule, mileage awards issued by a foreign air carrier are considered to be usable only on that foreign air carrier and thus not redeemable for taxable transportation beginning and ending in the United States. 1040 x Therefore, amounts paid to a foreign air carrier for mileage awards are not subject to the tax. 1040 x Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are not subject to the tax to the extent those miles will be awarded in connection with the purchase of taxable transportation. 1040 x Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are subject to the tax to the extent those miles will not be awarded in connection with the purchase of taxable transportation. 1040 x Domestic-segment tax. 1040 x   The domestic-segment tax is a flat dollar amount for each segment of taxable transportation for which an amount is paid. 1040 x However, see Rural airports, later. 1040 x A segment is a single takeoff and a single landing. 1040 x The amount of the domestic-segment tax is in the Instructions for Form 720. 1040 x Charter flights. 1040 x    If an aircraft is chartered, the domestic-segment tax for each segment of taxable transportation is figured by multiplying the tax by the number of passengers transported on the aircraft. 1040 x Rural airports. 1040 x   The domestic-segment tax does not apply to a segment to or from a rural airport. 1040 x An airport is a rural airport for a calendar year if fewer than 100,000 commercial passengers departed from the airport by air during the second preceding calendar year (the 100,000 passenger rule), and one of the following is true: The airport is not located within 75 miles of another airport from which 100,000 or more commercial passengers departed during the second preceding calendar year, The airport was receiving essential air service subsidies as of August 5, 1997, or The airport is not connected by paved roads to another airport. 1040 x   To apply the 100,000 passenger rule to any airport described in (3) above, only count commercial passengers departing from the airport by air on flight segments of at least 100 miles. 1040 x   An updated list of rural airports can be found on the Department of Transportation website at www. 1040 x dot. 1040 x gov and enter the phrase “Essential Air Service” in the search box. 1040 x Taxable transportation. 1040 x   Taxable transportation is transportation by air that meets either of the following tests. 1040 x It begins and ends either in the United States or at any place in Canada or Mexico not more than 225 miles from the nearest point on the continental United States boundary (this is the 225-mile zone). 1040 x It is directly or indirectly from one port or station in the United States to another port or station in the United States, but only if it is not a part of uninterrupted international air transportation, discussed later. 1040 x Round trip. 1040 x   A round trip is considered two separate trips. 1040 x The first trip is from the point of departure to the destination. 1040 x The second trip is the return trip from that destination. 1040 x Uninterrupted international air transportation. 1040 x   This means transportation entirely by air that does not begin and end in the United States or in the 225-mile zone if there is not more than a 12-hour scheduled interval between arrival and departure at any station in the United States. 1040 x For a special rule that applies to military personnel, see Exemptions, later. 1040 x Transportation between the continental U. 1040 x S. 1040 x and Alaska or Hawaii. 1040 x   This transportation is partially exempt from the tax on transportation of persons by air. 1040 x The tax does not apply to the part of the trip between the point at which the route of transportation leaves or enters the continental United States (or a port or station in the 225-mile zone) and the point at which it enters or leaves Hawaii or Alaska. 1040 x Leaving or entering occurs when the route of the transportation passes over either the United States border or a point 3 nautical miles (3. 1040 x 45 statute miles) from low tide on the coast line, or when it leaves a port or station in the 225-mile zone. 1040 x Therefore, this transportation is subject to the percentage tax on the part of the trip in U. 1040 x S. 1040 x airspace, the domestic-segment tax for each domestic segment, and the tax on the use of international air travel facilities, discussed later. 1040 x Transportation within Alaska or Hawaii. 1040 x   The tax on transportation of persons by air applies to the entire fare paid in the case of flights between any of the Hawaiian Islands, and between any ports or stations in the Aleutian Islands or other ports or stations elsewhere in Alaska. 1040 x The tax applies even though parts of the flights may be over international waters or over Canada, if no point on the direct line of transportation between the ports or stations is more than 225 miles from the United States (Hawaii or Alaska). 1040 x Package tours. 1040 x   The air transportation taxes apply to “complimentary” air transportation furnished solely to participants in package holiday tours. 1040 x The amount paid for these package tours includes a charge for air transportation even though it may be advertised as “free. 1040 x ” This rule also applies to the tax on the use of international air travel facilities, discussed later. 1040 x Liability for tax. 1040 x   The person paying for taxable transportation is liable for the tax and, ordinarily, the person receiving the payment collects the tax, files the returns, and pays the tax over to the government. 1040 x However, if payment is made outside the United States for a prepaid order, exchange order, or similar order, the person furnishing the initial transportation provided for under that order must collect the tax. 1040 x    A travel agency that is an independent broker and sells tours on aircraft that it charters must collect the transportation tax, file the returns, and pay the tax over to the government. 1040 x However, a travel agency that sells tours as the agent of an airline must collect the tax and remit it to the airline for the filing of returns and for the payment of the tax over to the government. 1040 x An independent third party that is not under the airline's supervision or control, but is acting on behalf of, and receiving compensation from, a passenger, is not required to collect the tax and pay it to the government. 1040 x For more information on resellers of air transportation, see Revenue Ruling 2006-52. 1040 x You can find Revenue Ruling 2006-52 on page 761 of I. 1040 x R. 1040 x B. 1040 x 2006-43 at www. 1040 x irs. 1040 x gov/pub/irs-irbs/irb06-43. 1040 x pdf. 1040 x   The fact that the aircraft does not use public or commercial airports in taking off and landing has no effect on the tax. 1040 x But see Certain helicopter uses, later. 1040 x   For taxable transportation that begins and ends in the United States, the tax applies regardless of whether the payment is made in or outside the United States. 1040 x   If the tax is not paid when payment for the transportation is made, the air carrier providing the initial segment of the transportation that begins or ends in the United States becomes liable for the tax. 1040 x Exemptions. 1040 x   The tax on transportation of persons by air does not apply in the following situations. 1040 x See also Special Rules on Transportation Taxes, later. 1040 x Military personnel on international trips. 1040 x   When traveling in uniform at their own expense, United States military personnel on authorized leave are deemed to be traveling in uninterrupted international air transportation (defined earlier) even if the scheduled interval between arrival and departure at any station in the United States is actually more than 12 hours. 1040 x However, such personnel must buy their tickets within 12 hours after landing at the first domestic airport and accept the first available accommodation of the type called for by their tickets. 1040 x The trip must begin or end outside the United States and the 225-mile zone. 1040 x Certain helicopter uses. 1040 x   The tax does not apply to air transportation by helicopter if the helicopter is used for any of the following purposes. 1040 x Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. 1040 x Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). 1040 x Providing emergency medical transportation. 1040 x   However, during a use described in items (1) or (2), the tax applies if the helicopter takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. 1040 x For item (1), treat each flight segment as a separate flight. 1040 x Fixed-wing aircraft uses. 1040 x   The tax does not apply to air transportation by fixed-wing aircraft if the fixed-wing aircraft is used for any of the following purposes. 1040 x Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). 1040 x Providing emergency medical transportation. 1040 x The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. 1040 x   However, during a use described in item (1), the tax applies if the fixed-wing aircraft takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. 1040 x Skydiving. 1040 x   The tax does not apply to any air transportation exclusively for the purpose of skydiving. 1040 x Seaplanes. 1040 x   The tax does not apply to any air transportation by seaplane for any segment consisting of a takeoff from, and a landing on, water if the places where the takeoff and landing occur are not receiving financial assistance from the Airport and Airways Trust Fund. 1040 x Bonus tickets. 1040 x   The tax does not apply to free bonus tickets issued by an airline company to its customers who have satisfied all requirements to qualify for the bonus tickets. 1040 x However, the tax applies to amounts paid by customers for advance bonus tickets when customers have traveled insufficient mileage to fully qualify for the free advance bonus tickets. 1040 x International Air Travel Facilities A tax per person is imposed (whether in or outside the United States) for international flights that begin or end in the United States. 1040 x However, for a domestic segment that begins or ends in Alaska or Hawaii, a reduced tax per person applies only to departures. 1040 x This tax does not apply if all the transportation is subject to the percentage tax, discussed earlier. 1040 x It also doesn't apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. 1040 x See the Instructions for Form 720 for the tax rates. 1040 x Transportation of Property by Air A tax of 6. 1040 x 25% is imposed on amounts paid (whether in or outside the United States) for transportation of property by air. 1040 x The fact that the aircraft may not use public or commercial airports in taking off and landing has no effect on the tax. 1040 x The tax applies only to amounts paid to a person engaged in the business of transporting property by air for hire. 1040 x The tax applies only to transportation (including layover time and movement of aircraft in deadhead service) that begins and ends in the United States. 1040 x Thus, the tax does not apply to transportation of property by air that begins or ends outside the United States. 1040 x Exemptions. 1040 x   The tax on transportation of property by air does not apply in the following situations. 1040 x See also Special Rules on Transportation Taxes, later. 1040 x Cropdusting and firefighting service. 1040 x   The tax does not apply to amounts paid for cropdusting or aerial firefighting service. 1040 x Exportation. 1040 x    The tax does not apply to payments for transportation of property by air in the course of exportation (including to United States possessions) by continuous movement, as evidenced by the execution of Form 1363, Export Exemption Certificate. 1040 x See Form 1363 for more information. 1040 x Certain helicopter and fixed-wing air ambulance uses. 1040 x   The tax does not apply to amounts paid for the use of helicopters in construction to set heating and air conditioning units on roofs of buildings, to dismantle tower cranes, and to aid in construction of power lines and ski lifts. 1040 x   The tax also does not apply to air transportation by helicopter or fixed-wing aircraft for the purpose of providing emergency medical services. 1040 x The fixed-wing aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. 1040 x Skydiving. 1040 x   The tax does not apply to any air transportation exclusively for the purpose of skydiving. 1040 x Excess baggage. 1040 x    The tax does not apply to excess baggage accompanying a passenger on an aircraft operated on an established line. 1040 x Surtax on fuel used in a fractional ownership program aircraft. 1040 x   The tax does not apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. 1040 x Alaska and Hawaii. 1040 x   For transportation of property to and from Alaska and Hawaii, the tax in general does not apply to the portion of the transportation that is entirely outside the continental United States (or the 225-mile zone if the aircraft departs from or arrives at an airport in the 225-mile zone). 1040 x But the tax applies to flights between ports or stations in Alaska and the Aleutian Islands, as well as between ports or stations in Hawaii. 1040 x The tax applies even though parts of the flights may be over international waters or over Canada, if no point on a line drawn from where the route of transportation leaves the United States (Alaska) to where it reenters the United States (Alaska) is more than 225 miles from the United States. 1040 x Liability for tax. 1040 x   The person paying for taxable transportation is liable for the tax and, ordinarily, the person engaged in the business of transporting property by air for hire receives the payment, collects the tax, files the returns, and pays the tax over to the government. 1040 x   If tax is not paid when a payment is made outside the United States, the person furnishing the last segment of taxable transportation collects the tax from the person to whom the property is delivered in the United States. 1040 x Special Rules on Transportation Taxes In certain circumstances, special rules apply to the taxes on transportation of persons and property by air. 1040 x Aircraft used by affiliated corporations. 1040 x   The taxes do not apply to payments received by one member of an affiliated group of corporations from another member for services furnished in connection with the use of an aircraft. 1040 x However, the aircraft must be owned or leased by a member of the affiliated group and cannot be available for hire by a nonmember of the affiliated group. 1040 x Determine whether an aircraft is available for hire by a nonmember of an affiliated group on a flight-by-flight basis. 1040 x   For this rule, an affiliated group of corporations is any group of corporations connected with a common parent corporation through 80% or more of stock ownership. 1040 x Small aircraft. 1040 x   The taxes do not apply to transportation furnished by an aircraft having a maximum certificated takeoff weight of 6,000 pounds or less. 1040 x However, the taxes do apply if the aircraft is operated on an established line. 1040 x “Operated on an established line” means the aircraft operates with some degree of regularity between definite points. 1040 x However, it does not include any time an aircraft is being operated on a flight that is solely for sightseeing. 1040 x   Consider an aircraft to be operated on an established line if it is operated on a charter basis between two cities also served by that carrier on a regularly scheduled basis. 1040 x   Also, the taxes apply if the aircraft is jet-powered, regardless of its maximum certificated takeoff weight or whether or not it is operated on an established line. 1040 x Mixed load of persons and property. 1040 x   If a single amount is paid for air transportation of persons and property, the payment must be allocated between the amount subject to the tax on transportation of persons and the amount subject to the tax on transportation of property. 1040 x The allocation must be reasonable and supported by adequate records. 1040 x Credits or refunds. 1040 x   If tax is collected and paid over for air transportation that is not taxable air transportation, the collector may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. 1040 x Alternatively, the person who paid the tax may claim a refund. 1040 x For information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. 1040 x Prev  Up  Next   Home   More Online Publications
Español

Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

North Carolina Department of Agriculture and Consumer Services

Website: North Carolina Department of Agriculture and Consumer Services

Address: North Carolina Department of Agriculture and Consumer Services
1001 Mail Service Center
Raleigh, NC 27699-1001

Phone Number: 919-707-3000

North Carolina Office of the Attorney General

Website: North Carolina Office of the Attorney General

Address: North Carolina Office of the Attorney General
Consumer Protection Division
Mail Service Center 9001
Raleigh, NC 27699-9001

Phone Number: 919-716-6000 919-716-0058 (in Spanish)

Toll-free: 1-877-566-7226 (NC)

Back to Top

Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Commissioner of Banks

Website: Commissioner of Banks

Address: Commissioner of Banks
4309 Mail Service Center
Raleigh, NC 27699-4309

Toll-free: 1-888-384-3811

Back to Top

Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Insurance

Website: Department of Insurance

Address: Department of Insurance
Consumer Services Division
1201 Mail Service Center
Raleigh, NC 27699-1201

Phone Number: 919-807-6750

Toll-free: 1-800-546-5664 (NC)

Back to Top

Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Secretary of State

Website: Secretary of State

Address: Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

Phone Number: 919-733-3924

Toll-free: 1-800-688-4507 (Investor Hotline)

Back to Top

Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Utilities Commission

Website: Utilities Commission

Address: Utilities Commission
Consumer Services
4325 Mail Service Center
Raleigh, NC 27699-4325

Phone Number: 919-733-9277

Toll-free: 1-866-380-9816

Back to Top

The 1040 X

1040 x Publication 957 - Main Content Table of Contents 1. 1040 x What is Back Pay?Reporting Back Pay Back Pay Under a Statute Nonstatutory Back Pay Format for Report to the SSA Questions 2. 1040 x Special Wage PaymentsReporting Special Wage Payments Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments Nonqualified Deferred Compensation and Section 457 Plans Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) PlansSpecial rule for box 11 of Form W-2 (distributions and deferral in the same year). 1040 x 1. 1040 x What is Back Pay? Back pay is pay received in a tax year(s) for actual or deemed employment in an earlier tax year(s). 1040 x For social security coverage and benefit purposes, all back pay, whether or not under a statute, is wages if it is payment for covered employment. 1040 x Damages for personal injury, interest, penalties, and legal fees included with back pay awards are not wages. 1040 x Report all back pay. 1040 x However, the tax year(s) for which back pay is credited as wages for social security purposes is different if it is awarded under a statute. 1040 x See Back Pay Under a Statute , later, for more information. 1040 x Reporting Back Pay The Internal Revenue Service (IRS) and the SSA consider back pay awards to be wages. 1040 x However, for income tax purposes, the IRS treats all back pay as wages in the year paid. 1040 x Employers should use Form W-2, Wage and Tax Statement, or electronic wage reports to report back pay as wages in the year they actually pay the employee. 1040 x The SSA no longer accepts reports on tapes, cartridges, and diskettes. 1040 x Example. 1040 x In 2012, Terry Morris earned wages of $50,000. 1040 x In the same year, she received $100,000 in settlement of a back pay case against her employer that covered the periods January 2007 through December 2011. 1040 x Her employer properly reflected social security wages of $110,100 and Medicare wages of $150,000 on her 2012 Form W-2. 1040 x However, if an employer did not include back pay wages on a previously filed Form W-2, magnetic media, or electronically filed wage report, the employer should prepare a wage correction report, Form W-2c, Corrected Wage and Tax Statement, or electronically filed report, to add the back pay award to the wages previously reported. 1040 x Example. 1040 x If, in the above example, Terry Morris' employer had prepared her 2012 Form W-2 reporting social security and Medicare wages of only $50,000 each, the employer would have to correct that report. 1040 x A Form W-2c correcting the 2012 Form W-2 would show previously reported social security and Medicare wages of $50,000 and the correct amount of $110,100 for social security wages and $150,000 for Medicare wages. 1040 x SSA treatment of back pay under a statute. 1040 x   Under the law, the SSA credits back pay awarded under a statute to an individual's earnings record in the period(s) the wages should have been paid. 1040 x This is important because wages not credited to the proper year may result in lower social security benefits or failure to meet the requirements for benefits. 1040 x   However, back pay under statute payments will remain posted to the employee's social security earnings record in the year reported on Form W-2 (or Form W-2c) unless the employer or employee notifies the SSA (in a separate, special report) of the back pay under a statute payment. 1040 x Then, the SSA can allocate the statutory back pay to the appropriate periods. 1040 x   If a back pay award is not made under a statute, the SSA credits back pay as wages in the year paid. 1040 x    If employers do notify the SSA of this payment, they should prepare a special report (with the information noted below) and send it to: Social Security Administration Attn: CPS Back Pay Staff 7-B-15 SWT 1500 Woodlawn Drive Baltimore, MD 21241-0001 Be sure to send this special report to the above address because the SSA handles it separately from other reports. 1040 x    If you paid the back pay award in the same tax year to which it applies, report the wages on that year's Form W-2. 1040 x No further action is necessary. 1040 x Example. 1040 x In 2012, Judy Wilson received a salary of $30,000 and a back pay under statute award of $2,000 for the period January through June 2012. 1040 x Her employer properly reported wages of $32,000 for social security and Medicare on her 2012 Form W-2. 1040 x No further action is necessary. 1040 x Information the SSA needs to properly credit back pay under a statute (special report). 1040 x   After you complete the special report, you or the employee should send it to the SSA when or after you submit the Form W-2 (on paper or electronically) to the SSA for the year you pay the statutory back pay to the employee. 1040 x There is no statute of limitations on the filing of the special report to enable the SSA to allocate the wages. 1040 x The special report must include the following information. 1040 x The employer's name, address, and employer identification number (EIN). 1040 x A signed statement citing the federal or state statute under which the payment was made. 1040 x If the statute is not identified, the SSA will assume the payment was not under a statute and will not allocate to earlier period(s). 1040 x The name and telephone number of a person to contact. 1040 x The SSA may have additional questions concerning the back pay case or the individual employee's information. 1040 x A list of employees receiving the payment and the following information for each employee: The tax year you paid and reported the back pay. 1040 x The employee's social security number (SSN). 1040 x The employee's name (as shown on his or her social security card). 1040 x The amount of the back pay award excluding any amounts specifically designated otherwise, for example, damages for personal injury, interest, penalties, and legal fees. 1040 x The period(s) the back pay award covers (beginning and ending dates—month and year). 1040 x The other wages paid subject to social security and/or Medicare taxes and reported in the same year as the back pay award (if none, show zero)*. 1040 x Do not include the back pay award shown in that wage report. 1040 x If you originally submitted the report under an establishment number, show that number and the amount of money that is to remain under that establishment number. 1040 x The amount to allocate to each reporting period*. 1040 x This includes any amount you want allocated (if applicable) to the tax year of the award payment. 1040 x If you do not give the SSA specific amounts to allocate, the SSA does the allocation by dividing the back pay award by the number of months or years covered by the award. 1040 x *Note. 1040 x   For periods before January 1, 1978 (before January 1, 1981, for state and local government employers covered by a Section 218 agreement), show the wage amounts for each calendar quarter ending March 31, June 30, September 30, and December 31. 1040 x For all tax years, show and identify the social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) separately. 1040 x MQGE is applicable to federal employees beginning in 1983, and for certain state and local government employees beginning in 1986. 1040 x For tax years 1991 and later, list the social security and Medicare wages separately. 1040 x If you originally reported the individual's wages under an establishment or payroll record unit number, show the amount of wages to remain in the award year for that number and furnish that number to the SSA along with the EIN. 1040 x Back Pay Under a Statute Back pay awarded under a statute is a payment by an employer following an award, determination, or agreement approved or sanctioned by a court or government agency responsible for enforcing a federal or state statute that protects an employee's right to employment or wages. 1040 x Examples of pertinent statutes include: Age Discrimination in Employment Act, Americans with Disabilities Act, Equal Pay Act, Fair Labor Standards Act, National Labor Relations Act, State minimum wage laws, and State statutes that protect rights to employment and wages. 1040 x Payments based on laws that have a similar effect to those listed above also may qualify as payments made under a statute. 1040 x Back pay awards, under some of the statutes listed above, may be compensation for personal injury and not pay for employment. 1040 x Such awards are not wages for social security coverage purposes. 1040 x If a court-approved or sanctioned settlement agreement states that the agreement is not an admission of discrimination, liability, or act of wrongdoing, the statement does not change the nature of a back pay award. 1040 x The payments made in such a settlement may still be back pay and wages under the rules discussed here. 1040 x Nonstatutory Back Pay A payment for back wages negotiated between an employer and employee without an award, determination, or agreement approved or sanctioned by a court or government agency, the payment is not made under a statute. 1040 x Delayed wage payments and retroactive pay increases resulting from union negotiation or payments under local ordinances or regulations are back pay and are wages. 1040 x However, they are not payments made under a statute. 1040 x If you are uncertain whether the back pay award was under a qualified statute, you may need to contact your personnel department or legal counsel or the attorney who filed the suit. 1040 x Format for Report to the SSA Use the format shown in Table 1, later, to send the SSA the information needed to properly credit back pay under a statute. 1040 x In a cover letter, include: Name and address of the employer, Statute under which you paid the back pay, Name and telephone number of the employer contact, and Signature of the reporting official. 1040 x Under certain circumstances, back pay may be a special wage payment and excluded from wages counted under the social security earnings test. 1040 x If you pay back pay to an employee age 61 or older, report it to the SSA in accordance with this section. 1040 x Read Special Wage Payments, later, for additional reporting instructions. 1040 x Questions If you have questions concerning back pay under a statute, call the SSA at 1-800-772-6270. 1040 x Exception. 1040 x   If you are a state or local government employer who was covered by an agreement under Section 218 of the Social Security Act before January 1, 1987, and you paid a back pay award before January 1, 1987, which you did not report to the SSA, contact your state Social Security Administrator's office. 1040 x Table 1. 1040 x Format for Report (Under Covering Letter) to Request SSA to Allocate Back Pay Under Statute Wages Employer's EIN: xx-xxxxxxx Tax Year in Which Award Payment Was Paid: 2012 (1) SSN and Employee Name (2)1 Award Amount and Period(s) (3)2,3 Other Soc. 1040 x Sec. 1040 x /Med. 1040 x Wages Paid In Award Year (4)3 Allocation     Soc. 1040 x Sec. 1040 x Med. 1040 x /MQGE Year Soc. 1040 x Sec. 1040 x Med. 1040 x /MQGE xxx-xx-xxxx HELEN T. 1040 x SMITH $100,000 1/2009 - 12/2012 $40,000 $40,000 2009 2010 2011 2012 $20,000 25,000 27,000 28,000 $20,000 25,000 27,000 28,000 xxx-xx-xxxx SAM W. 1040 x EVANS 30,000 7/89-12/91 -0- -0- 1989 1990 1991   6,000 12,000 12,000 xxx-xx-xxxx ROLAND S. 1040 x ADAMS 15,000 7/80-12/81 -0- -0- 9/80 12/80 1981 3,500 3,500 8,000   1Exclude amounts specifically designated as damages, penalties, etc. 1040 x  2Exclude the amount of back pay, if any, included in that amount. 1040 x  3For periods before January 1, 1978 (and for state and local government (Section 218) employers before January 1, 1981), show the wage amounts by calendar quarters. 1040 x The social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) must be shown separately FOR ALL YEARS. 1040 x (Wages subject ONLY to MQGE would be shown in the Medicare/MQGE column; no wages would be shown in the Soc. 1040 x Sec. 1040 x column. 1040 x ) For tax years 1991 and later, the social security and Medicare wages must be listed separately. 1040 x Explanation of examples. 1040 x Helen T. 1040 x Smith–The back pay award, excluding interest, was $100,000 for the periods 1/2009-12/2012. 1040 x In 2012, this employee was also paid $40,000 in other wages. 1040 x (Her Form W-2 for 2012 reported $110,100 for social security and $140,000 for Medicare. 1040 x The SSA allocation will result in adjusted posted wages of $68,000 for social security and $68,000 for Medicare for 2012. 1040 x ) Sam W. 1040 x Evans–The back pay award was $30,000 for the periods 7/89-12/91. 1040 x This employee was hired in 1989 and was subject to MQGE only. 1040 x He was no longer employed by this governmental employer in 2012. 1040 x (His Form W-2 for 2012 reported $30,000 for social security and $30,000 for Medicare. 1040 x After the SSA allocation, he will not have any net posted wages for 2012. 1040 x ) Roland S. 1040 x Adams–The back pay award was $15,000 for the periods 7/80-12/81. 1040 x He was no longer employed by this state and local government (Section 218) employer in 2012. 1040 x (His Form W-2 for 2012 reported $15,000 for social security and $15,000 for Medicare; after the SSA allocation, he will not have any net posted wages for 2012. 1040 x ) If the state Social Security Administrator's office needs more information, they can contact the SSA at the following address:   Social Security Administration Office of Income Security Programs Office of Earnings and Program Integrity Policy 6401 Security Boulevard 2506 OPS Baltimore, MD 21235 2. 1040 x Special Wage Payments A special wage payment (SWP) is an amount paid by an employer to an employee (or former employee) for services performed in a prior year. 1040 x Employers should report to the SSA special wage payments made to employees and former employees who are recipients of social security retirement benefits. 1040 x Special wage payments made to a retired employee receiving social security or to an employee who continues to work while receiving social security benefits may reduce the benefits the individual receives if not reported to the SSA. 1040 x Special wage payments may include (but are not limited to): Accumulated sick and vacation pay, Back pay, Bonuses, Deferred compensation, Payments because of retirement, Sales commissions, Severance pay, and Stock options. 1040 x Note. 1040 x Payments made after retirement that are part of the normal payroll cycle should not be routinely reported as special wage payments. 1040 x Earnings Test. 1040 x   Benefits paid to a social security beneficiary under full retirement age may be reduced if the beneficiary continues to work. 1040 x The SSA uses the information in boxes 1, 3, and 5 of Form W-2 to determine the beneficiary's current year earnings. 1040 x Special wage payments, which are for services performed in a prior year, will increase the current year earnings on Form W-2, which also may result in a reduction in the beneficiary's benefits. 1040 x If a benefit is reduced because of a special wage payment, the beneficiary must get documentation from the employer before the SSA can restore the deducted portion. 1040 x Therefore, employer reports of special wage payments help prevent incorrect benefit reductions. 1040 x Reporting Special Wage Payments Employers must report special wage payments for income tax purposes and social security and Medicare taxes in the year received. 1040 x Report income, social security, and/or Medicare taxes for special wage payments on Form W-2. 1040 x See Nonqualified Deferred Compensation and Section 457 Plans, later, for reporting nonqualified deferred compensation plan deferrals and payments on Form W-2. 1040 x In addition, report to the SSA special wage payments made during the reporting year to retired employees and employees who continue to work while receiving social security benefits. 1040 x Submit reports after the close of the tax year. 1040 x To avoid delays in processing, submit reports in time to reach the SSA by April 1. 1040 x Use one of the following reporting methods. 1040 x Electronic reporting. 1040 x   Special wage payment files can be sent electronically by logging onto Business Services Online (BSO) via the socialsecurity. 1040 x gov website. 1040 x BSO enables organizations and authorized individuals to conduct business with and submit confidential information to the Social Security Administration. 1040 x You must register to use this website. 1040 x The web address is www. 1040 x socialsecurity. 1040 x gov/bso/bsowelcome. 1040 x htm. 1040 x   Use the specifications and record layout shown in  Table 2, later. 1040 x Only one file at a time may be submitted. 1040 x If your file is large (>10MB), or you have a slow internet connection, the transmission will be faster if the file is zipped. 1040 x A zipped file contains a file that has been compressed to reduce its file size. 1040 x WinZip and PKZIP are examples of acceptable compression packages. 1040 x   Electronic submissions not meeting the specifications in Table 2 will be rejected. 1040 x Paper listing. 1040 x   A paper listing can be used to report special wage payments to several employees. 1040 x Use the format shown in Table 3, later. 1040 x Submit paper listings to the local SSA office nearest your place of business. 1040 x Visit www. 1040 x socialsecurity. 1040 x gov/locator to find a Social Security office near you. 1040 x Form SSA-131. 1040 x   Use Form SSA-131 to report special wage payments made to an employee. 1040 x Also use this form to report nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in box 11 of Form W-2. 1040 x    This image is too large to be displayed in the current screen. 1040 x Please click the link to view the image. 1040 x Publication 957 Reporting Back Pay to the Social Security Administration Instructions for Form SSA–131   EMPLOYER INSTRUCTIONS FOR COMPLETING SPECIAL WAGE PAYMENT FORM 1. 1040 x Provide the EIN that was used or will be used to report the employee's wages on the Form W-2. 1040 x 2. 1040 x Enter the date the employee retired. 1040 x Enter “Not Retired” if the employee has not retired. 1040 x 3. 1040 x Enter the date that the employee last performed services; was not expected to return to work; and was not subject to recall to render additional services. 1040 x This date should be the same as or earlier than the date in item “2”. 1040 x Enter “Not Retired” if the employee has not retired. 1040 x 4. 1040 x Enter the wages that were paid to the employee in the tax year that were for services that were performed in years prior to the tax year or that were paid on account of retirement. 1040 x  Examples (not all inclusive) of payments to be included: Payments in lieu of vacation that were earned in a year prior to the tax year. 1040 x Accumulated sick payments which were paid in a lump sum based on “retirement” as the sole condition of payment. 1040 x Accumulated sick payments paid at or after the date in item 3, which were earned in a year prior to the tax year. 1040 x Payments “on account of retirement”–dismissal, severance or termination pay paid because of retirement. 1040 x Bonuses which are paid pursuant to a prior contract, agreement or promise causing the employee to expect such payments regularly; or announced to induce the employee to work more steadily, rapidly or efficiently or to remain with the employer. 1040 x Stock Options. 1040 x   Do not include in item “4” payments: For annual, sick, holiday, or vacation pay if used (absence from work) prior to the date of retirement (earlier of items “2” or “3”). 1040 x That were reported or will be reported under “Nonqualified Plans” on the Form W-2. 1040 x That were deducted from the employee's wages and paid to a deferred compensation plan (e. 1040 x g. 1040 x , 401k). 1040 x Employees health and dental plan benefits (non-covered/non-taxable for Social Security Wages). 1040 x Bonuses earned and paid in the tax year. 1040 x 5. 1040 x Check whether payments listed in item 4 will be made for years after the tax year. 1040 x If yes, please show the amounts and years in which these will be paid, if known. 1040 x 6. 1040 x Nonqualified deferred compensation and section 457 plans only. 1040 x If you were unable to report nonqualified deferred compensation or section 457 plan payments and deferrals (contributions) on Form W-2 because both payments and deferrals occurred during the year, show the amount of wages earned by the employee during the tax year. 1040 x Generally, the wages earned will be the compensation reported in block 1 of Form W-2 less payments from a nonqualified deferred compensation (or 457) plan, but including any amounts deferred under the plan during the tax year (See IRS Publication 957). 1040 x Paperwork/Privacy Act Notice: This report is authorized by regulation 20 CFR 404. 1040 x 702. 1040 x The information that you provide will be used in making a determination regarding the amount of Social Security benefits payable to the above named individual. 1040 x While your response is voluntary, if you do not respond we may not be able to make a correct determination regarding the amount of Social Security benefits payable to the above named individual for the year in question. 1040 x We may also use the information you give us when we match records by computer. 1040 x Matching programs compare our records with those of other Federal, State, or local government agencies. 1040 x Many agencies may use matching programs to find or prove that a person qualifies for benefits paid by the Federal Government. 1040 x The law allows us to do this even if you do not agree to it. 1040 x Explanations about these and other reasons why information you provide us may be used or given out are available in Social Security Offices. 1040 x If you want to learn more about this, contact any Social Security Office. 1040 x The Paperwork Reduction Act: This information collection meets the clearance requirements of 44 U. 1040 x S. 1040 x C. 1040 x §3507, as amended by Section 2 of the Paperwork Reduction Act of 1995. 1040 x You are not required to answer these questions unless we display a valid Office of Management and Budget control number. 1040 x We estimate that it will take you about 20 minutes to read the instructions, gather the necessary facts, and answer the questions. 1040 x Form SSA-131 (8-2001) EF (06-2002)   Submit Form SSA-131 to the SSA office nearest your place of business. 1040 x Or, the employee can submit it to the SSA office handling the claim. 1040 x You or the employee must submit this form before the SSA can exclude the special wage payments for purposes of the earnings test. 1040 x If reporting on more than one employee, complete a separate Form SSA-131 for each employee or use the paper listing format (except for reporting nonqualified and section 457 plan deferrals and payments) in Table 3. 1040 x Do not report payments from nonqualified deferred compensation or section 457 plans that were reported in box 11 of Form W-2. 1040 x Use Form SSA-131 if deferrals to and payments from nonqualified or section 457 plans occurred during the tax year. 1040 x Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments A nonstatutory (nonqualified) option to purchase stock which is exercised in a year after the year in which the option was earned is a special wage payment. 1040 x It should not count for the social security earnings test. 1040 x Nonstatutory (nonqualified) options exercised as special wage payments by retired employees or employees who continue to work while receiving social security benefits should be reported by employers using the above reporting methods. 1040 x Nonqualified Deferred Compensation and Section 457 Plans A nonqualified deferred compensation plan is a plan or arrangement established and maintained by an employer for one or more of its employees that provides for the deferral of compensation, but does not meet the requirements for a tax-qualified deferred compensation plan. 1040 x For social security and Medicare purposes, deferred compensation plans for employees of state and local governments (section 457 plans) are treated the same as nonqualified plans. 1040 x Nonqualified and section 457 plans are reported differently than other special wage payments. 1040 x See Reporting Amounts Deferred to Nonqualified and Section 457 Plans below for specific instructions. 1040 x Reporting Amounts Deferred to Nonqualified and Section 457 Plans Generally, when the related services are performed, nonqualified deferred compensation is subject to social security and Medicare tax when deferred. 1040 x However, if nonqualified and section 457 plans contain provisions that delay the employee's right to receive payments from the plan, a period of substantial risk of forfeiture exists. 1040 x The plans' deferrals, or contributions, are not subject to social security and Medicare taxes until the period of substantial risk of forfeiture ends. 1040 x No risk of forfeiture. 1040 x   If there is no risk of forfeiture, report wage amounts deferred to a nonqualified deferred compensation or section 457 plan in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. 1040 x Example. 1040 x Company X's nonqualified deferred compensation plan allows the deferral of up to $20,000 of employee salaries each year. 1040 x The plan has no risk of forfeiture. 1040 x In 2012, Employee A defers $20,000 to the plan from a total salary of $200,000. 1040 x Form W-2 Completion Amount Box 1 $200,000 Box 3* 110,100 Box 5 200,000 *Wage base maximum for tax year 2012 Risk of forfeiture lapses before retirement. 1040 x   If the substantial risk of forfeiture lapses before the employee retires, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. 1040 x The accumulated deferrals are reported along with any other social security and Medicare wages earned during the year. 1040 x   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. 1040 x If the employee continues working, future deferrals are social security and Medicare wages when they are earned. 1040 x    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. 1040 x Risk of forfeiture lapses at retirement. 1040 x   When an employee's right to a payment is contingent upon working until retirement, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, as social security and/or Medicare wages in the year of retirement. 1040 x Add the amount to other wages paid in that year, and enter in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. 1040 x   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. 1040 x    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. 1040 x Example—risk of forfeiture. 1040 x At the end of the risk-of-forfeiture period for Company Y's nonqualified deferred compensation plan, Employee B's accumulated deferrals, plus interest earned by the plan, are $120,000, not including B's $20,000 deferral for this year. 1040 x B's wages, including this year's deferred amount, are $80,000. 1040 x Form W-2 Completion Amount Box 1 $60,000 Box 3* 110,100 Box 5 200,000 Box 11 120,000 *Wage base maximum for tax year 2012 Reporting Payments From Nonqualified and Nongovernmental Section 457 Plans When an employee or former employee retires and begins receiving payments (distributions) from a nonqualified or nongovernmental section 457 plan, report the payments in boxes 1 and 11 of Form W-2. 1040 x Report payments (distributions) from a governmental section 457 plan on Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040 x Example. 1040 x Employee D retired from the XYZ company and began receiving social security benefits. 1040 x XYZ paid D a $12,000 bonus upon retirement for sales made in a prior year, and D received $25,000 in payments from XYZ's nonqualified deferred compensation plan. 1040 x In addition, D agreed to continue performing services for XYZ, but on a part-time basis for wages of $15,000 per year. 1040 x D made no deferrals to the nonqualified plan this year. 1040 x Form W-2 Completion Amount Box 1 $52,000 Box 3 27,000 Box 5 27,000 Box 11 25,000 Report the $12,000 bonus to the SSA using electronic reporting, a paper listing, or Form SSA-131. 1040 x For more information, see Reporting Special Wage Payments , earlier. 1040 x Reporting Payments and Deferrals in the Same Year Do not complete box 11 when payments (distributions) are made from a nonqualified plan and deferrals are reported in boxes 3 and/or 5 of Form W-2 (including current year deferrals). 1040 x Report to the SSA on Form SSA-131 the total amount the employee earned during the tax year. 1040 x Normally, the amount earned is the amount reported in box 1 of Form W-2 less payments from a nonqualified or section 457 plan, but including any amounts deferred under the plan during the tax year. 1040 x See Form SSA-131 and its instructions, earlier. 1040 x Example. 1040 x Employee K retired this year from Company XYZ and began receiving social security benefits. 1040 x During the year he earned wages of $50,000 and deferred $35,000 of the wages into the company's nonqualified deferred compensation plan. 1040 x K also received $75,000 in payments from the company's nonqualified plan. 1040 x Form W-2 Completion Amount Special Wage Payment $75,000 Wages 50,000 Minus: deferral 35,000 Total reported in Box 1 $90,000     Wages including deferral reported in  Boxes 3 and 5 $50,000     Leave Box 11 blank. 1040 x File Form SSA-131 -0-     Form SSA-131 Completion Amount from Box 1 of Form W-2 $90,000 Minus: payments from a nonqualified plan 75,000 Plus: amounts deferred into the plan during the year 35,000 Total wages earned for purposes of Form SSA-131 (item 6) $50,000 Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) Plans It is not necessary to show amounts deferred during the year under an NQDC plan subject to section 409A. 1040 x If you report section 409A deferrals, show the amount in box 12 of Form W-2 using code Y. 1040 x For more information, see Notice 2008-115, 2008-52 I. 1040 x R. 1040 x B. 1040 x 1367, available at www. 1040 x irs. 1040 x gov/irb/2008-52_IRB/ar10. 1040 x html. 1040 x Special reporting rules apply when an NQDC plan is not compliant with section 409A (when there has been a “plan failure”). 1040 x Income included under section 409A from an NQDC plan is reported in box 1 and box 12 of Form W-2 using code Z. 1040 x See Notice 2008-115. 1040 x The following examples use small dollar amounts for illustrative purposes. 1040 x However, the amount reported in box 3 of Form W-2 is always limited by the social security earnings wage base (for example, $110,100 for 2012). 1040 x The term “vested” in the following examples means that the amount deferred is not subject to a substantial risk of forfeiture. 1040 x Conversely, the term “not vested” means that the amount deferred is subject to a substantial risk of forfeiture. 1040 x The examples assume that the NQDC plan is in compliance with section 409A, and that amounts deferred under the plan are not includible in gross income as they are deferred. 1040 x For purposes of the examples, it is assumed that the regular pay of the employee is remuneration for employment and wages for employment tax purposes except to the extent the deferral of a portion of the regular pay results in a reduction in wages. 1040 x Example 1: Deferral that is immediately vested (no substantial risk of forfeiture) with no distributions and no vesting of prior-year deferrals. 1040 x For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into her employer’s NQDC plan. 1040 x The deferral of $20 was vested upon deferral and there was an employer match of $10 under the plan, which was also vested. 1040 x Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10. 1040 x Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 vested deferral) $180 Box 3 ($200 Regular pay plus $10 Employer match, vested) 210 Box 5 ($200 Regular pay plus $10 Employer match, vested) 210 Box 11 -0- Example 2: Deferral with delayed vesting (substantial risk of forfeiture) of employee and employer portions (no distributions and no vesting of prior-year deferrals). 1040 x For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. 1040 x The deferral of $20 was not vested upon deferral, and there was an employer match of $10 under the plan, which was also not vested. 1040 x Regular pay = $200; Deferral, not vested = $20; Employer match, not vested = $10. 1040 x Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, not vested) $180 Box 3 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 5 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 11 -0- Example 3: Deferral that is immediately vested with prior-year deferrals and investment earnings on the prior-year deferrals that are now vesting (no distributions). 1040 x For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. 1040 x The deferral of $20 was vested upon deferral. 1040 x During the year, $100 of prior-year deferrals and $15 of investment earnings on the $100 of prior-year deferrals became vested. 1040 x Regular pay = $200; Deferral, vested = $20; Vesting of prior-year deferrals = $100; Vesting of investment earnings on $100 of prior-year deferral = $15. 1040 x Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, vested) $180 Box 3 ($200 Regular pay plus $100 vested prior-year deferral plus $15 earnings on deferral) 315 Box 5 ($200 Regular pay plus $100 vested prior-year deferral plus $15 vested investment earnings on prior year deferral) 315 Box 11 ($100 vested prior-year deferral plus $15 earnings) 115 Example 4: No deferrals but there are distributions (no vesting of prior-year deferrals). 1040 x For the year, the employee’s regular pay was $100, and the employee deferred no pay into the employer’s NQDC plan. 1040 x There was no vesting of prior-year deferrals under the plan. 1040 x During the year, there were total distributions of $50 from the plan to the employee. 1040 x Regular pay = $100; Distribution = $50. 1040 x Form W-2 Completion Amount Box 1 ($100 Regular pay plus $50 Distribution) $150 Box 3 ($100 Regular pay ) 100 Box 5 ($100 Regular pay) 100 Box 11 ($50 Distribution) 50 Special rule for box 11 of Form W-2 (distributions and deferral in the same year). 1040 x   If, in the same year, there are NQDC distributions and there are deferrals that are reportable in boxes 3 and/or 5 (current or prior-year deferrals) of Form W-2, do not complete box 11. 1040 x Instead, report on Form SSA-131 the total amount the employee earned during the year. 1040 x * Submit the SSA-131 to the nearest SSA office or give it to the employee. 1040 x   *Generally, the amount earned by the employee during the tax year for purposes of item 6 of Form SSA-131 is the amount reported in box 1 of Form W-2 plus current-year deferrals that are vested (employee and employer portions) less distributions. 1040 x Do not consider prior-year deferrals that are vesting in the current year. 1040 x If there was a plan failure, the box 1 amount in this calculation should be as if there were no plan failure. 1040 x Example 5: Deferral that is immediately vested and there are distributions (no vesting of prior-year deferrals). 1040 x For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1040 x There was also an employer match of $10. 1040 x The deferral and employer match were vested upon deferral. 1040 x There was no vesting of prior-year deferrals under the plan. 1040 x During the year, there were total distributions of $50 from the plan to the employee. 1040 x Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10; Distribution = $50. 1040 x Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, vested) $230 Boxes 3 and 5 ($200 Regular pay plus $10 vested employer match) 210 Leave Box 11 blank. 1040 x File Form SSA-131 -0-     Form SSA-131 Completion Item 6 - amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $30 vested current year employee deferral and employer match) $210 Example 6: Deferral with delayed vesting and there are distributions (no vesting of prior-year deferrals). 1040 x For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1040 x The deferral was not vested upon deferral. 1040 x There was no vesting of prior-year deferrals under the plan. 1040 x During the year, there were total distributions of $50 from the plan to the employee. 1040 x Regular pay = $200; Deferral, not vested = $20; Distribution = $50. 1040 x Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay minus $20 deferral that is not vested) 180 Box 11 ($50 Distribution). 1040 x 50 Example 7: Deferral that is immediately vested and there are distributions (also vesting of prior-year deferrals and earnings on those prior-year deferrals). 1040 x For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1040 x The deferral was vested upon deferral. 1040 x There was vesting of $100 of prior-year deferrals and $15 of earnings on the $100 prior-year deferral under the plan. 1040 x During the year, there were total distributions of $50 from the plan to the employee. 1040 x Regular pay = $200; Deferral, vested = $20; Distribution = $50; Vesting of prior-year deferrals ($100) and earnings on those prior-year deferrals ($15) = $115. 1040 x Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 vested deferral $230 Boxes 3 and 5 ($200 Regular pay Plus $115 vested prior deferral (with vested earnings on the deferral)) 315 Leave Box 11 blank. 1040 x File Form SSA-131 -0-     Form SSA-131 Completion Item 6, amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $20 vested current year deferral) $200 Example 8: Deferral with delayed vesting and there are distributions (vesting of prior-year deferrals, including employer matches, and earnings on those deferrals). 1040 x For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. 1040 x The deferral was not vested upon deferral. 1040 x There was also vesting of prior-year deferrals and employer matches and earnings on these amounts under the plan ($115). 1040 x During the year, there were total distributions of $50 from the plan to the employee. 1040 x Regular pay = $200; Deferral, not vested = $20; Distribution = $50; Vesting of prior-year deferrals and employer match = $100 plus earnings on that $100 of $15. 1040 x Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay plus $115 vested prior-year deferral and prior year employer match and earning on the prior year amounts minus $20 deferral that is not vested) 295 Leave Box 11 blank. 1040 x File Form SSA-131 -0-     Form SSA-131 Completion Item 6 ($230 Amount from Box 1 of Form W-2 minus $50 Distribution) $180 Table 2. 1040 x Specifications for Electronic Reporting of Special Wage Payments Record Position  Field Size   Description Start End 1 3 3 Record Type—must include only the capital letters “SWP” 4 12 9 SSN—must be numeric and may not be all zeros 13 27 15 Last Name—all capitals and no punctuation; may have blanks on right only 28 38 11 First Name—all capitals and no punctuation; may have blanks on right only 39 39 1 Middle Initial—must be either a capital letter or blank 40 48 9 EIN—must be numeric and may not be all zeros 49 59 11 Payment—must be numeric; may not be all zeros; last two digits on right are assumed to be cents; no period or dollar sign 60 63 4 Payment Year—must be only a four-digit year 64 66 3 SSA Office Code—must be numeric and may be all zeros 67 67 1 Payment Type Code—must be the capital letter “T” 68 117 50 Filler  The record format is a fixed length of 117. 1040 x  The file format is ASCII. 1040 x  Submit only one file at a time. 1040 x   Table 3. 1040 x Sample—Paper Listing for Reporting Special Wage Payments to Several Employees Report of Special Wage PaymentsTax Year: Page of A. 1040 x Employer Name: EIN:   Address: Contact Name:     Phone: ( )   . 1040 x 1) B. 1040 x Employee Name: (Last) (First) (MI)   C. 1040 x SSN: D. 1040 x SWP:$ E. 1040 x Type: Other: 2) B. 1040 x Employee Name: (Last) (First) (MI)   C. 1040 x SSN: D. 1040 x SWP:$ E. 1040 x Type: Other: 3) B. 1040 x Employee Name: (Last) (First) (MI)   C. 1040 x SSN: D. 1040 x SWP:$ E. 1040 x Type: Other: 4) B. 1040 x Employee Name: (Last) (First) (MI)   C. 1040 x SSN: D. 1040 x SWP:$ E. 1040 x Type: Other: 5) B. 1040 x Employee Name: (Last) (First) (MI)   C. 1040 x SSN: D. 1040 x SWP:$ E. 1040 x Type: Other:     INSTRUCTIONS:   Enter tax year and page number. 1040 x   A. 1040 x Employer name, employer identification number (EIN), address, the name of a contact person, and a phone number where the contact person can be reached during normal business hours. 1040 x   B. 1040 x Employee's name. 1040 x   C. 1040 x Employee's social security number (SSN). 1040 x   D. 1040 x Total amount of special wage payments made to the employee. 1040 x   E. 1040 x Type of special wage payment from the following list: (1) Vacation Pay, (2) Sick Pay, (3) Severance Pay,  (4) Bonus, (5) Deferred Compensation, (6) Stock Options, and (7) Other—Please explain. 1040 x   Do not use a paper listing for nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in block 11 of Form W-2. 1040 x (Get Form SSA-131. 1040 x )                 Prev  Up  Next   Home   More Online Publications