Yes, you should report the income as a substitute W-2, so the correct taxes are calculated. You only need to mark the Foreign or International Organization box on the W-2 follow-up screen.
For U.S. citizens, compensation received for services performed as an employee of an international organization is includible in gross income and is reportable on their U.S. federal income tax returns, even though the compensation may not be subject to withholding of U.S. federal income taxes. Furthermore, compensation received by a U.S. citizen for services performed within the United States as an employee of an international organization is subject to self-employment tax.
Employees of a Foreign Government or International Organization - Federal Income Tax Withholding
The UN reimburses those staff members who have to pay the U.S. income taxes due on their UN earnings as well as one-half of the related self-employment taxes payable by U.S. citizens.
You must pay self-employment tax (Social Security and Medicare taxes) for your work in the United States or its territories or possessions for a foreign government or an international organization.
Exception for dual citizens: If you are a U.S. citizen and also a citizen of a country with which the United States has a bilateral social security agreement, other than Canada or Italy, your work for the government of that foreign country is always exempt from this rule.
Check with your employer if you're not sure if this applies to you. @rubyzippers
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