Pennsylvania PA W-2 Reconciliation Worksheet

PA W-2 Reconciliation Worksheet
PA W-2 Reconciliation Worksheet (PA-40 W-2 RW)
START PA-40 W-2 RW (EX) 12-22
HERE Name

PA W-2 RECONCILIATION WORKSHEET
Social Security Number

➜

Employer’s identification number from Box b

FEDERAL WAGES
(Box 1)

FEDERAL WAGES
(Box 1)

MEDICARE WAGES
(Box 5)

COLUMN A

COLUMN B

COLUMN C

COLUMN A

COLUMN B

COLUMN C

MEDICARE WAGES
(Box 5)

PA WAGES
(Box 16)

PA WAGES
(Box 16)

SECTION I – Starting Point
SECTION II – Additions
1.

Company contribution to deferred compensation plan.

2.

Elective deferrals to IRC Section 401(k) - Code “D”
in Box 12.
Elective deferrals under IRC Section 403(b) salary reduction
agreement - Code “E” in Box 12.
Elective deferrals under IRC Section 408(k)(6) salary reduction
agreement (SEP) - Code “F” in Box 12.
Elective and non-elective deferrals under IRC Section 457(b)
deferred compensation plan - Code “G” in Box 12.
Elective deferrals to a Section 501 (C)(18)(D) tax-exempt
organization plan - Code “H” in Box 12.
Income from a nonqualified deferred compensation (NQDC)
plan - Code “Z” in Box 12.
Deferrals to a NQDC plan qualifying under IRC Section 409A Code “Y” in Box 12.
Other Additions (provide full descriptions)
Fields 9a. through 9e.

3.
4.
5.
6.
7.
8.
9.
9a.
9b.
9c.
9d.
9e.
10.

TOTAL (add Lines 1 through 9e.)

SECTION III – Subtractions
11.

Company contribution to deferred compensation plan.

12.

Cost of group-term life - Code “C” in Box 12.

13.

Income from a NQDC plan - Code “Z” in Box 12.

14.
15.

Deferrals to a NQDC plan qualifying under IRC Section 409A Code “Y” in Box 12.
Personal use of company vehicle.

16.

Distributions from a NQDC plan.

17.

Distributions from a NQDC plan previously taxed for
Pennsylvania purposes.
Other Subtractions (provide full descriptions)
Fields 18a. through 18e.

18.
18a.
18b.
18c.
18d.
18e.
19.

TOTAL (add Lines 11 through 18e.)

SECTION IV – Finishing Point
[Add Section I and Section II, Line 10 then subtract Section III, Line 19]

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Instructions for PA W-2 RW

Interest Income

PA-40 W-2 RW IN (EX) 12-22

GENERAL INFORMATION

GENERAL INSTRUCTIONS

PURPOSE OF SCHEDULE
Use the PA W-2 RW to provide supplemental information
regarding amounts reported on federal Form W-2, Wage
and Tax Statement, so that the department may reconcile
the wages to determine if the proper amount of gross compensation income is reported for Pennsylvania personal
income tax purposes. The W-2 RW may also be used to
provide additional information regarding nonqualified
deferred compensation distributions previously taxed.

Column A reconciles the amount of federal wages in Box 1
of the W-2 to the amount of Medicare wages reported in
Box 5 of W-2. Include those items of compensation, such
as various types of retirement plan deferrals and any other
items of compensation that are not included in federal
wages but are included Medicare wages in Section II of the
W-2 RW. Include those items of compensation included in
federal wages that are not included in Medicare wages in
Section III of the W-2 RW.

RECORDING DOLLAR AMOUNTS
Show money amounts in whole-dollars only. Eliminate any
amount less than $0.50 and increase any amount that is
$0.50 or more to the next highest dollar.

WHO MUST COMPLETE
The W-2 RW must be completed by taxpayers when the
amount shown as Medicare wages in Box 5 of the W-2 are
greater than Pennsylvania wages shown in Box 16 and
there is insufficient information included on the W-2 to reconcile the wages without the additional information represented on the W-2 RW. The W-2 RW must also be completed when a PA resident taxpayer works in another state and
Pennsylvania tax is not withheld from the wages when
insufficient information is included on the W-2 to adjust the
wages to the amount of world-wide wages a Pennsylvania
resident would be subject to using Pennsylvania personal
income tax rules.

SCHEDULE INSTRUCTIONS
IDENTIFICATION INFORMATION
NAME OF TAXPAYER ON W-2
Enter the name of the taxpayer shown on the W-2.
SOCIAL SECURITY NUMBER
Enter the Social Security number (SSN) of the taxpayer
shown on the W-2.
EMPLOYER’S IDENTIFICATION NUMBER
Enter the federal employer identification number from Box
b of the W-2 for the employer whose wages are being reconciled.

Column B reconciles federal wages in Box 1 of the W-2 to
Pennsylvania wages in Box 16 or to what Pennsylvania
wages should be (for wages earned by a Pennsylvania resident outside the state or by nonresidents). Include those
items of compensation, such as various types of retirement
plan deferrals and any other items of compensation that
are not included in federal wages but are included
Pennsylvania wages in Section II of the W-2 RW. Include
those items of compensation included in federal wages that
are not included in Pennsylvania wages in Section III of the
W-2 RW.
Column C reconciles Medicare wages in Box 5 of the W-2
to Pennsylvania wages in Box 16 or to what Pennsylvania
wages should be (for wages earned by a Pennsylvania resident outside the state or by nonresidents). Include those
items of compensation, that are not included in Medicare
wages but are included Pennsylvania wages in Section II of
the W-2 RW. Include those items of compensation included
in Medicare wages that are not included in Pennsylvania
wages in Section III of the W-2 RW.
NOTE: The most common differences between federal, Medicare and Pennsylvania wages are included
on Lines 1 thru 8 and Lines 10 thru 17. Other additions and
subtractions not listed may be reported on Lines 9 and 17,
respectively.
IMPORTANT: If including the W-2 RW with a PA-40,
Personal Income Tax Return, all three columns of the
W-2 RW must be completed.

LINE INSTRUCTIONS
SECTION I
STARTING POINT
Enter the amount of federal wages from Box 1 of the W-2
in the space above the headings for Columns A and B.

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Enter the amount of Medicare wages from Box 5 of the W2 in the space above the heading for Column C.

Box 12 of the W-2, enter the amount from the last pay
statement of the year from the employer.

SECTION II

LINE 7

ADDITIONS

LINE 1
COLUMN A
Enter the amount of any company contributions to a
deferred compensation plan not included in federal wages
that are included in Medicare wages.

LINE 2

COLUMN A
Enter the amount of earnings on amounts deferred that are
included in Box 1 when a nonqualified deferred compensation (NQDC) plan fails to satisfy the requirements under
IRC Section 409A plan shown as Code Z in Box 12 of the
W-2.

LINE 8

COLUMNS A AND B
Enter the amount of any elective deferrals the
taxpayer/employee made to an IRC Section 401(k) cash or
deferred arrangement plan shown as Code D in Box 12 of
the W-2. If contributions were made but are not shown in
Box 12 of the W-2, enter the amount from the last pay
statement of the year from the employer.

COLUMNS A AND B
Enter the amount of any deferrals the taxpayer/employee
made to a nonqualified deferred compensation (NQDC)
plan that are not required to be included in compensation
under IRC Section 409A shown as Code Y in Box 12 of the
W-2. If contributions were made but are not shown in Box
12 of the W-2, enter the amount from the last pay statement
of the year from the employer.

LINE 3

LINES 9a THROUGH 9e

COLUMNS A AND B
Enter the amount of any elective deferrals the
taxpayer/employee made to an IRC Section 403(b) salary
reduction agreement shown as Code E in Box 12 of the W2. If contributions were made but are not shown in Box 12
of the W-2, enter the amount from the last pay statement of
the year from the employer.

COLUMNS A AND B
Enter the amount of any items of compensation not shown
on Lines 1 thru 8 that are not included in federal wages that
are included in Medicare or Pennsylvania wages.

LINE 4
COLUMNS A AND B
Enter the amount of any elective deferrals the
taxpayer/employee made to an IRC Section 408(k)(6)
salary reduction agreement shown as Code F in Box 12 of
the W-2. If contributions were made but are not shown in
Box 12 of the W-2, enter the amount from the last pay
statement of the year from the employer.

LINE 5
COLUMNS A AND B
Enter the amount of any elective and non-elective deferrals
the taxpayer/ employee made to an IRC Section 457(b)
deferred compensation plan shown as Code G in Box 12 of
the W-2. If contributions were made but are not shown in
Box 12 of the W-2, enter the amount from the last pay
statement of the year from the employer.

LINE 6
COLUMNS A AND B
Enter the amount of any elective deferrals the
taxpayer/employee made to an IRC Section 501(C)(18)(D)
tax-exempt organization plan shown as Code H in Box 12
of the W-2. If contributions were made but are not shown in
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COLUMN C
Enter the amount of any items of compensation not shown
on Lines 1 thru 8 that are not included in Medicare wages
that are included in Pennsylvania wages.

LINE 10
COLUMNS A AND B
Add the amounts on Lines 1 thru 9e and enter the total for
each column.

SECTION III
SUBTRACTIONS

LINE 11
COLUMN C
Enter the amount of any company contributions to a
deferred compensation plan not included in federal wages
that are included in Medicare wages.

LINE 12
COLUMNS B AND C
Enter the amount of the cost of group-term life insurance
payments shown as Code C in Box 12 of the W-2. If payments were made but are not shown in Box 12 of the W-2,
enter the amount from the last pay statement of the year
from the employer.
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LINE 13

LINES 18a THROUGH 18e

COLUMN C
Enter the amount of earnings on amounts deferred that are
included in Box 1 when the NQDC plan fails to satisfy the
requirements under IRC Section 409A plan shown as Code
Z in Box 12 of the W-2.

COLUMNS A AND B
Enter the amount of any items of compensation not shown
on Lines 11 thru 16 that are included in federal wages that
are not included in Medicare or Pennsylvania wages.

LINE 14
COLUMN C
Enter the amount of any deferrals the taxpayer/employee
made to a NQDC plan that are not required to be included
in compensation under IRC Section 409A shown as Code
Y in Box 12 of the W-2. If contributions were made but are
not shown in Box 12 of the W-2, enter the amount from the
last pay statement of the year from the employer.

LINE 15
COLUMNS B AND C
Enter the amount of any personal use of company vehicle
included in federal wages. This amount is sometimes
included in Box 14 of the W-2. If not included as a separate
amount in Box 14 of the W-2, enter the amount from the
last pay statement of the year from the employer.

LINE 16
COLUMN A
Enter the amount of any distributions from a NQDC plan
that were not previously included in Pennsylvania wages.

COLUMN C
Enter the amount of any items of compensation not shown
on Lines 11 thru 16 that are included in Medicare wages
that are not included in Pennsylvania wages.

LINE 19
COLUMNS A, B AND C
Add the amounts on Lines 11 thru 18e and enter the total
for each column.

SECTION IV
FINISHING POINT
COLUMNS A, B AND C
Add the amount from Section I and Section II, Line 10 and
subtract the amount from Section III, Line 19 and enter the
result for each column.
IMPORTANT: The Finishing Point amounts from
Columns B and C should be the same and equal the
amount of Pennsylvania wages reported on Form W-2 provided by an employer for a Pennsylvania resident working
in Pennsylvania. When the amounts do not match, include
the amount from Column C in the total as Gross
Compensation on Line 1a of the PA-40 Return.

LINE 17
COLUMN B
Enter the amount of any distributions from a NQDC plan
that were previously included in Pennsylvania wages.
IMPORTANT: Proof that the amounts deferred for a
NQDC plan were previously included in Pennsylvania
wages is also required to be included with the return.

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