In which boxes on the W-2 should adoption assistance be reported?

Adoption assistance must be reported on the W-2 in specific locations to ensure accurate tax treatment. The correct reporting method includes utilizing both the applicable boxes that relate to Social Security wages and Medicare wages, as well as a designated code that indicates the nature of the benefit.

When adoption assistance is provided, it is included in the employee's gross income, which is reported in Box 1. Additionally, this benefit may also impact Social Security and Medicare wages; hence, it is reported in Boxes 3 and 5. For tax reporting purposes, contributions toward adoption assistance are designated under Box 12 with the specific code that indicates the type of benefit being provided.

Code T specifically refers to adoption assistance and facilitates tracking the expenses associated with adoption benefits. Therefore, reporting adoption assistance in Boxes 3, 4, 5, 6, and using Code T in Box 12 represents the correct and comprehensive method of reporting as required by the IRS.

This structured approach ensures that both the employer and the employee recognize the tax implications tied to adoption assistance, thereby adhering to IRS regulations for proper tax compliance.