Expert: Shirley McAllister, CPP, PHR - 1/6/2009

Question
Mike Wellman,
Our company paid for an airline ticket for personal use for an employee.  I need to have this amount reflected on his w-2.  I know that the federal taxes should be paid.  But I need a payroll calculation to offset the net amount and to show up on the w-2.  Is there a specific w-2 code that this calculation should have?  If I don't have an offset calculation it gives a net check.  I will also have to offset the expense account it went to when we paid the airline.   I appreciate your help with this.

Thanks
Robin

Answer
Robin I will try to help.  

The Airline Ticket is a taxable benefit. You would code it as payment of a taxable benefit. You have to gross it up for the Federal, Fica, Medicare and state taxes. It could also be considered a gift and you could code it as you would a gift.

It is not coded differently on the W-2, it is coded into box one as part of the salary of the employee.

Your expense account would be employee benefits, or if you wanted to keep it separate from the other benefits put it to employee special awards or just put it toward wages.

Shirley