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Year-End Reporting & W-2 Processing Flashcards

7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Year-End Reporting & W-2 Processing flashcards as text

  1. What form is used to correct errors on a previously issued W-2?

    Answer: Form W-2c

    Form W-2c (Corrected Wage and Tax Statements) is used to correct errors on previously issued W-2 forms and is accompanied by Form W-3c when filed with the SSA.

  2. What Box 12 code on Form W-2 reports the cost of employer-sponsored health coverage under the ACA?

    Answer: Code DD

    Code DD in Box 12 reports the aggregate cost of employer-sponsored health coverage as required for informational purposes under the Affordable Care Act.

  3. Starting with tax year 2023, at what threshold are employers required to file W-2 forms electronically with the SSA?

    Answer: 10 or more forms

    The Taxpayer First Act lowered the mandatory e-file threshold to 10 or more aggregate information returns, effective for returns filed after December 31, 2023.

  4. How long must an employer retain an undeliverable W-2 form that is returned by the postal service?

    Answer: 4 years

    If a W-2 is returned as undeliverable, the employer must retain it for 4 years as part of its payroll records.

  5. What Box 12 code reports designated Roth contributions to a 401(k) plan?

    Answer: Code AA

    Code AA in Box 12 reports designated Roth contributions made to a 401(k) plan, which are after-tax deferrals to a Roth account within the plan.

  6. What type of information is reported in Box 14 of Form W-2?

    Answer: Other employer-discretionary information

    Box 14 is a catch-all box where employers may report other information such as state disability insurance premiums, union dues, or after-tax health insurance contributions.

  7. Which IRS form is used to report non-employee compensation of $600 or more paid to independent contractors?

    Answer: Form 1099-NEC

    Form 1099-NEC (Nonemployee Compensation) was reinstated in 2020 to separately report payments of $600 or more made to independent contractors and other non-employees.