Affects of Special W2 Situations on Processing

Owned by Lori Nye
Last updated: Jan 16, 2024 by Andrea Boehm
2 min read

This document describes the affects of situations a district may have on W2 reporting. 

The items listed here in red affect balancing between W2 Report and Submission and Quarter Report. These items will cause the total gross on W2 Report and Submission to be higher than that found on Quarter Report as they apply.

Adoption Assistance - Cash Payment

Payment processed as Adoption Assistance Pay Type:

  • Exempt from:

    • Federal taxation

    • Ohio taxation

    • SERS/STRS

  • Not exempt from:

    • Medicare taxation

    • ODJFS wages

  • City taxes treated according to how the 'Tax Non Cash Earn' flag is set on the Payroll Item Configuration record. 

Adoption Assistance - Section 125 Treated as Wages

Created using the Payroll Item Configuration/Item with Type of Adoption Assistance:

  • Included annuity type of Section 125 treated as wages

  • Exempt from:

    • Federal taxation

    • Ohio taxation

  • Not exempt from:

    • Medicare taxation

    • ODJFS wages

    • SERS/STRS

  • City taxations are according to whether or not the city honors annuities. 

Cost of Life Insurance over $50,000

Use Life Insurance Premium Pay Type:

  • Exempt from:

    • Federal tax withholding

    • Ohio withholding

    • SERS/STRS

  • Not exempt from:

    • Federal taxation

    • Ohio taxation

    • Medicare taxation

  • City taxes treated according to how the 'Tax Non Cash Earn' flag is set on the Payroll Item Configuration record. 

Dependent Care Benefits

  • Exempt from:

    • Federal taxation up to exclusion limit of $5000

    • Ohio taxation up to exclusion limit of $5000

    • City taxation if a Section 125 plan 

Educational Reimbursements

Contact legal or tax advisor if necessary to determine how payment should be handled. 

Employee Expense Reimbursements

If paid through USAS disbursement and the district wants the amounts to appear on the W2 form, see separate document for more details - Reimbursable Employee Expenses.

Fringe Benefits

Amounts must be entered in Core>Adjustments on the Federal (001) record using Type of Fringe Benefits.

Health Savings Accounts - Employee Amount

Set up as annuity in Payroll Item Configuration with Type HealthSavingsAccount.  This will put the Annuity Type as 'Other'.

  • Exempt from

    • Federal taxation

    • Ohio Taxation

    • City withholdings

    • Medicare

    • ODJFS Reporting

  • Not exempt from:

    • SERS/STRS 

Health Savings Accounts - Employer Amount

Set up as annuity in Payroll Item Configuration with Type, HealtheSavingsAccount.  This will put the Annuity Type as 'Other'.

  • Enter only board amount in Payroll Item records

  • Exempt from

    • Federal taxation

    • Ohio taxation

    • City withholdings

    • Medicare

    • ODJFS reporting

    • SERS/STRS 

Insurance Amounts Paid to an Annuity Company

  • Exempt from:

    • SERS/STRS

    • Medicare taxation

  • Not exempt from:

    • Federal taxation

    • Ohio taxation

    • City taxation 

Medical Savings Accounts

Set up as Payroll Item Configuration with the Type of Medical Savings.

  • Exempt from:

    • Ohio taxation

    • SERS/STRS

    • ODJFS reporting

  • Not exempt from:

    • Federal taxation

    • Medicare taxation

  • City taxation will be according to 'Tax Employer Amount' checkbox found in Payroll Item Configuration.

Medicare - Employer Pays Employee Share

Set up as 692/693 with Employer amount as 2.9%

  • Exempt from:

    • SERS/STRS

  • Not exempt from:

    • Federal taxation

    • Ohio taxation

    • Medicare taxation

  • City taxation will be according to 'Tax Employer Amount' checkbox found in Payroll Item Configuration.

Moving Expenses - Active Military Only

Section 125 Plans - Treated as Non-wages

Set up as Payroll Item record with Type of Annuity

  • Exempt from:

    • Federal taxation

    • Ohio taxation

    • Medicare taxation

    • City taxation

  • Not exempt from:

    • SERS/STRS 

SERS/STRS Employer Pickup - Annuitized

Set up as SERS Annuity and STRS Annity (590/591) Payroll Item records

  • Exempt from:

    • Federal taxation

    • Ohio taxation

  • Not exempt from:

    • Medicare taxation

  • City taxation is according to whether or not city honors annuities.

SERS/STRS - Non-Annuitized

Set up as SERS and STRS (400/450) Payroll Item records

  • Not exempt from:

    • Federal taxation

    • Ohio taxation

    • City taxation

    • Medicare taxation 

Third Party Sick Pay - Taxable

  • Contact insurance provider to determine type of third party sick payment.

  • Contact legal or tax advisor if necessary to determine how payment should be handled.

  • See Third Party Sick Pay. 

Third Party Sick Pay - Non-taxable

Enter amount in Core>Adjustments on the Federal (001) Payroll Item using the 'Third Party Pay' Type.

Use of Company Vehicle

  • Contact legal or tax advisor if necessary to determine how payment should be handled.

  • Any amounts reportable must be entered in Core>Adjustments on the Federal (001) Payroll Item using the 'Vehicle lease' Type.