Example: Adjusting State Wages for a Specific State

An employee who lived and worked in Colorado has moved to Georgia. The new employer has reimbursed both deductible and nondeductible moving expenses. They are set up as:

• Benefit 2023 - Nondeductible (taxable) moving expenses.

• Benefit 2024 - Deductible (nontaxable) moving expenses.

On the US Legislative/Regulatory form, for benefit 2023, enter P in the W-2 IRS Defined Code field. Report excludable expenses in Box 12.

FICA and Medicare taxes were withheld from the taxable benefit (2023), but no federal or state taxes were withheld.

The benefit was processed with tax exemption values of A (federal) and F (state), as entered on the Tax Exemptions form.

For federal reporting, you need to add the nondeductible amount (DBA 2023) to reportable wages. The system uses special handling from the workfile build.

For this example, you must add the nondeductible amount to Georgia wages but not to Colorado wages. You specify this amount on the State/Local W-2 Additions Detail form.

The workfile build program processes the following tax areas and their corresponding amounts:

• If you have selected the Track DBA by Tax Area option, the workfile build program reads F06148 for tax area-specific history.

  If amounts exist, the workfile build program adds them to state wages based on the work tax area on the State/Local W-2 Additions Detail form.

• If you have not selected the Track DBA by Tax Area option, the workfile build program uses the amount from F06146 and adds it to all state wages for the employee.

  Important: To add two DBAs that have the same W-2 IRS defined code, both DBAs must have the same designation in the Track DBA by Tax Area option.