How to prepare W-2 for employee for whom employer contributed SEP money

[Greta]

Employer contributed 3% (=$900) for employee who earned 30K. Employee contributed nothing. Is his wage 30K? Medicare wage 30K? What does Box 12 say?

[sjrcpa · Accepted solution]

All wages $30K. Check the retirement plan box. The end.

[dascpa]

Just so you know, participants in Salary Reduction Simplified Employee Pension (SARSEP) plans established before 1997 were entitled to make elective salary deferral contributions.  Now it's only an employer-contributed plan.

[Greta]

I didn't know that. You mean SEP-IRA plans, code S in Box 12? Employees are no longer eligible to reduce taxable wage in Box 1 if they also contribute unless it's a pre-1997 established plan?

[dascpa]

Code S is for a SIMPLE-IRA, not a SEP.

[sjrcpa]

I think SARSEPs went away with TRA 86.

[Greta]

Right!! I haven't done payroll in decades.

Client can't set this up now, deadline was Oct 1.