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  2. TAX MATTERS

Form W-2 Gets Code for Stock Options

Please note: This item is from our archives and was published in 2001. It is provided for historical reference. The content may be out of date and links may no longer function.

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The IRS announced that employers will use a new code in box 12 of the 2001 form W-2. Box 12 states the amount of benefits includable as wages on which the employee’s share of taxes has been paid. Code V will identify the amount of compensation related to the exercise of employer-provided nonstatutory stock options that are included in box 1—wages, tips and other compensation; box 3—Social Security wages (up to the SS wage base); and box 5—Medicare wages and tips. Currently, the IRS does not require employers to separately identify any taxable fringe benefits that are included in box 1.