How are moving expenses reported on the W-2?

When reporting moving expenses on the W-2, it is essential to differentiate between the taxable and non-taxable portions of the reimbursement. The taxable portion of the moving expenses is reported in Boxes 1 (Wages, tips, other compensation), 3 (Social Security wages), and 5 (Medicare wages and tips) of the W-2. This ensures that the necessary amounts are subject to federal income tax as well as Social Security and Medicare taxes.

The non-taxable portion of moving expenses can be reported in Box 12 using the code "P." This coding specifies that these amounts are not subject to federal income tax, which means they are being correctly excluded from taxable wages.

Option D accurately reflects this reporting structure by placing the taxable portion in the appropriate boxes and using the correct code for the non-taxable portion. Understanding the correct handling of moving expense reimbursements on the W-2 helps ensure compliance with IRS reporting requirements.