2022 W-2 with Box 11 - nonqualified plans

[hgtc]

Retired taxpayer has W-2 from nonqualified plans box 11 checked.  Lacerte has critical warming said this nonqualified plan amount should be reported in Sch 1 in 2022 form 1040.  And, taxpayer can not e-file his form 1040 for 2022.

Is this something new for tax year 2022 form 1040?  I do see form 1040 changed.  But, has to paper file returns?

How to correct this error?

Thanks

[PolishTaxGuy]

Following and hoping for an answer here as well.

[darcydf]

Following.  I need an answer on this also.

[5280taxhelp]

Following and waiting for a response. 

[Joel2]

I am holding for an answer to the W-2 Box 11 issue.

[5280taxhelp]

I moved the W-2 for the NCDC to the other income section. See below.

Pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan (W-2 Box 11) [Override]

BUT on the W-2 it says taxes were withheld.  Where would one put that information?

[hgtc]

unfortunately, I am still waiting for answer to fix this e-filing issue.

I did ask Lacerte, they said I need to update the program.  but, I am in the most updated version.....

[TaxGirl3 · Accepted solution]

Try entering the W2 box 11 amount in screen 14.1 and reducing the W2 box 1 by that amount (if that's the only amount in box 1, leave $1 to allow the W2 withholding).  Does that work?

[hgtc]

will try that.  Thanks.

[darcydf]

My concern about doing the reduction to box 1 on the W-2 is that it might create a "mismatch" and cause correspondence the the tax return.  How would you work around that?

[TaxGirl3]

What 'mismatch'?  W2 box 11 income is already included in W2 box 1, and instead of being reported on 1040 Line 1a, should be reported on Schedule 1 Line 8t.  See 1040 instructions for Line 1a (page 24) and Line 8t (page 86).

[BMcGovern]

Leave in w-2 area but leave Box 11 blank - enter the Box 11 amount in 14.1 under Pension or Annuity from a nonqualified deferred plan (W-2 Box 11) [O]

[Carrie Houchins-Witt]

Thank you - this works!

[Bob Saunders]

This seems tricky especially when there is a matching state return - like NY - which caused another critical diagnostic preventing it from filing.   Not sure it will pass the matching with IRS and will cause aa notice.  How about just not completing box 11 in the w-2 screen instead?

[TaxGirl3]

That's correct.  Do not enter the W2 box 11 amount in the W2 screen.  Instead, enter it in screen 14.1.  Also, W2 box 1 includes (is increased by) the W2 box 11 amount, and you therefore have to manually reduce the box 1 amount in the W2 screen (the program does this automatically when you put the W2 box 11 amount in the W2 screen, but now you are not doing that).

[runnumbers]

Thank you! Worked for me too.... I was sweating having to file paper returns for all my Deferred comp people.

[hgtc]

just update Lacerte.  This e-file issue solved.  No problem to e-file with Box 11 incomes.

[kc6078]

It fixed the federal e-filing issue but NY still has a critical diagnostics.

[lgjcpa]

Lacerte still does not have it correct -  Be extremely careful on entering  amounts in Box 11 in the W-2 data entry fields. 

The  2021 and 2022 General Instructions for Form W-2 clearly indicate the purpose of "Box 11 - Non Qualified plans"  is for the Social Security Administration - 

[Laurie6]

Entered W2 for retiree as in the past year in Lacerte with Line 1 wages equaling Line 11 non-qualified plans.  Amount has always been taxable in the past, but for 2022 the Line 11 amount is subtracted from Line 1 so no taxable income.  This appears incorrect. 

Is Lacerte fixing this?  Why the change?

[sjrcpa]

Are you sure it is not appearing as taxable income elsewhere on the return?

[lgjcpa]

Lacerte removes it from wages and includes it in pensions.  If the amount in Box 11 is included in the amounts in Box 1 then that is correct.  There evidently is a lot of confusion as to whether or not the amount in Box 11 on W-2's is included in Box 1 on W-2's.  In my case a review of the actual W-2 clearly reflects the amount in Box 11 of the W-2 is not included in Box 1 of the W-2 therefore an entry in Lacerte should not made for Box 11

[Laurie6]

Thank you!  Found it moved to Other Income on Schedule 1, Line 8T.

[Laurie6]

It moved it to Schedule I, Line 8t.  Thank you!

[sjrcpa]

You're welcome.

[JayH]

I have a W-2 where box 11 is clearly NOT included in box 1.  Maybe ignore box 11 entirely?

[cut_bank]

Input W-2 as prepared.  

Gets a little confusing but amount comes across in wages then shows as a subtraction in wages.   

Ends up in box 9t of Schedule 1 (where it belongs).

Seems like it should not show at all in wages as a positve and then a negative.  

Input W-2 as prepared.  It works it's just the presentation in the end product results in a head scratch.  

[ACEND]

I'm still confused.  In my case, looking back at 2020 and 2021 returns, the W-2s are presented exactly the same with Box  1 equal to Box 11.  And we have lots of withholding on this deferred comp.

In 2020 and 2021, the Lacerte result from that input is to only report Wages in Line 1 of 1040 and no "other income".

But in 2022 with the exact details in the W-2, the Lacerte program eliminates the Line 1 Wages amount and puts it all on Schedule 1 box 8T as income from a deferred comp plan.

The net income is correct in all cases and the withholding comes through okay, but the "change" in presentation seems odd.

[TaxGirl3]

This is one of many presentation changes the IRS makes every single year.  Take a look at the 1040 instructions.