IRS Releases 2018 Instructions for Forms W-2 and W-3

Sovos
September 4, 2018

The IRS has released the 2018 Instructions for Forms W-2 and W-3. Form W-2 is used by employers to report employee wage information to the IRS.

There are a number of changes from the previous revision:

  • Two new codes (Codes GG and HH)
    • Code GG- Income from qualified equity grants under section 83
    • Code HH- Aggregate deferrals under section 83elections as of the close of the calendar year
  • Leave-based donation programs to aid victims of Hurricanes and Tropical Storms Harvey, Irma, and Maria, and the 2017 California Wildfires
    • Employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made before January 1, 2019, to qualified tax-exempt organizations providing relief for the victims of Hurricane Harvey and Tropical Storm Harvey, Hurricane Irma and Tropical Storm Irma, Hurricane Maria and Tropical Storm Maria, and the California Wildfires that began on October 8, 2017
  • Suspension of exclusion for qualified moving expense reimbursements
  • The Tax Cuts and Jobs Act also temporarily makes the Sinai Peninsula of Egypt a qualified hazardous duty area. Treat this hazardous duty area as a combat zone for the exclusion from income of certain combat pay under section 112 and exclusion from wages under section 3401(a)(1)
  • New qualified equity grants under section 83
  • New section for “Qualified small employer health reimbursement arrangement”
  • Penalties have increased due to inflation
  • FSA limit has increased

To view the Instructions for Forms W-2 and W-3, please click here.

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Sovos

Sovos is a global provider of tax, compliance and trust solutions and services that enable businesses to navigate an increasingly regulated world with true confidence. Purpose-built for always-on compliance capabilities, our scalable IT-driven solutions meet the demands of an evolving and complex global regulatory landscape. Sovos’ cloud-based software platform provides an unparalleled level of integration with business applications and government compliance processes. More than 100,000 customers in 100+ countries – including half the Fortune 500 – trust Sovos for their compliance needs. Sovos annually processes more than three billion transactions across 19,000 global tax jurisdictions. Bolstered by a robust partner program more than 400 strong, Sovos brings to bear an unrivaled global network for companies across industries and geographies. Founded in 1979, Sovos has operations across the Americas and Europe, and is owned by Hg and TA Associates.
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