Oct 22, 2024
The SECURE 2.0 Act aims to expand the ease of saving for retirement, to simplify the management of retirement plans, and in general to improve financial security for American workers and retirees. The updated law includes new options for 401(k) and 403(b) employer contributions, adjustments to required minimum distribution age for IRAs, and increased catch-up contribution limits. The act also has incentives to encourage employee enrollment.
However, these provisions may affect the amounts that employers need to report on Form W-2. The IRS has issued a fact sheet to clarify plan provisions and their impact on Form W-2. Among the specifics:
Filling out the form
Employee contributions to a Roth SEP or Roth Simple IRA generally will be included on Form W-2 in boxes 1, 3 and 5. They will also be reported in box 12 with code F (for a SEP) or code S (for a SIMPLE IRA).
When an employer makes matching or nonelective contributions to a Roth SEP, to a Roth SIMPLE IRA or as designated Roth contributions to a qualified plan, the employer must report them on Form 1099-R for the year the contributions were made.
For Roth SEP or SIMPLE IRA contributions:
Additional details can be found in IRS Notice 2024-2.
If you filed 2023 W-2 forms without following these new guidelines, you may need to file Form W-2C to correct any errors. Consult your tax accountant and financial advisor for advice on staying compliant.
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