What should I do if box 1 in my w-2 includes employer-provided adoption assistance?

[adzhong]

Turbo tax note says "Any amounts paid by an employer for qualified adoption expenses under an adoption assistance program are not subject to federal income tax withholding and aren't included in box 1 on your W-2." That is not the case in my w-2, what should I do to adjust?

[Coleen3 · Accepted solution]

You should ask for a corrected W-2 and present your employer with the following links. It looks like he just read the first paragraph and did not proceed to the Section 2.

Any fringe benefit you provide is taxable and must be included in the recipient's pay unless the law specifically excludes it. Section 2 discusses the exclusions that apply to certain fringe benefits. Any benefit not excluded under the rules discussed in section 2 is taxable

This section (2) discusses the exclusion rules that apply to fringe benefits. These rules exclude all or part of the value of certain benefits from the recipient's pay.

In most cases, the excluded benefits aren't subject to federal income tax withholding, social security, Medicare, federal unemployment (FUTA) tax, or Railroad Retirement Tax Act (RRTA) taxes and aren't reported on Form W-2.

This section discusses the exclusion rules for the following fringe benefits.

• Accident and health benefits.

• Achievement awards.

• Adoption assistance.

https://www.irs.gov/publications/p15b/ar02.html

https://www.irs.gov/publications/p15b/ar02.html#en_US_2017_publink1000193638