Employee Taxes

Reading a W-2

Box 1: Wages, Tips, Other Compensation

This is your total taxable wages for federal income tax purposes. This figure includes your regular wages, bonuses, and any taxable fringe benefits (such as education benefits greater than $5,250), rewards and recognition, gifts, taxable moving expenses, as well as the taxable value of group-term life insurance in excess of $50,000 (see box 12, below). Box 2: Federal income tax withheld. This amount represents the total amount withheld from your paycheck for federal income taxes.

Box 3: Social Security Wages 

This represents income subject to Social Security tax. There is a Social Security wage base each year and once you earn up to that amount, you no longer will have deductions for Social Security tax. Social Security wages are reduced by pre-tax deductions such as health/dental/vision insurances, and flex spending but not reduced by your contributions to a retirement plan (403b or 457.) The only applicable exceptions are students working at UVA while enrolled at least half time and attending classes, as well as nonresident alien employees visiting the U.S. for a limited period on F-1, J-1, M-1 or Q-1 visas and performing services to carry out the purpose for which such visas have been issued.

Box 4: Social Security Tax Withheld

This amount represents the total amount withheld from your paycheck for Social Security taxes. The Social Security tax rate is 6.2%, and a matching amount of 6.2% is paid by UVA. The only applicable exceptions are students working at UVA while enrolled at least half time and attending classes, as well as nonresident alien employees visiting the U.S. for a limited period on F-1, J-1, M-1 or Q-1 visas and performing services to carry out the purpose for which such visas have been issued.

Box 5: Medicare Wages and Tips 

This represents income subject to Medicare tax. There is no maximum wage base for Medicare taxes. Medicare wages are reduced by pre-tax deductions such as health/dental/vision insurances, and flex spending but not reduced by your contributions to a retirement plan (403b or 457.) The only applicable exceptions are students working at UVA while enrolled at least half time and attending classes, as well as nonresident alien employees visiting the U.S. for a limited period on F-1, J-1, M-1 or Q-1 visas and performing services to carry out the purpose for which such visas have been issued.

Box 6: Medicare Tax Withheld 

This amount represents the total amount withheld from your paycheck for Medicare taxes. The Medicare tax rate is 1.45%, and a matching amount of 1.45% is paid by UVA. Once you earn $200,000 annually, there is an additional .9% that the employee pays which makes a total of 2.35%. The only applicable exceptions are students working at UVA while enrolled at least half time and attending classes, as well as nonresident alien employees visiting the U.S. for a limited period on F-1, J-1, M-1 or Q-1 visas and performing services to carry out the purpose for which such visas have been issued.

Boxes 7 and 8: Social Security Tips and Allocated Tips.

This is not applicable to UVA employees.

Box 9: Blank; Field not used.

Box 10: Dependent Care Benefits

This amount represents any amount reimbursed for dependent care expenses through a flexible spending account. UVA must report the pre-tax amount paid into a dependent care flexible spending account as part of the university’s Benefits Plan. Only dependent care benefits are reportable in this box.

Box 11: Nonqualified Plans

This amount reports any amounts that were distributed to you from your non-qualified deferred compensation

Box 12: See backside of Form W-2

Box 13

The “Retirement plan” block will be checked if you contributed to any of UVA’s tax-deferred options, or if you were a participant in UVA’s Optional Retirement Plan or the Commonwealth’s defined benefit plan through the Virginia Retirement System (VRS). By checking the “Retirement plan” block, an employer notifies the IRS that an employee’s eligibility for a deductible Individual Retirement Arrangement (IRA) is limited.

Box 14. Other 

This box may be used by an employer to report any additional tax information (e.g. taxable auto allowance.)

Box 15: State/Employer’s State ID Number 

This box simply reports the UVA's state and state identification number for taxation purposes.

Box 16: State wages, tips, etc.

This amount represents the total of taxable wages earned in that state.

Box 17: State Income tax 

This amount represents the total of state income taxes withheld from your paycheck for the wages reported in Box 16.

Box 18, 19 and 20Local Wages, Local Income Tax and Locality Name

These boxes apply to out-of-state employees only, whose tax residency states collect local income taxes.

Changing Withholding

During the year, changes in an employee’s marital status, exemptions, adjustments, deductions or credits may occur which will impact what they claim on their tax return. When these changes occur, employees should change their withholding status and number of allowances in Employee Self-Service/Tax forms appropriately. If the changes reduce the number of allowances an employee is allowed to claim or if their marital status changes from married to single, employees must update their Form W-4 within 10 days of this change. Generally, employees can make changes to their W-4 whenever they wish to change their withholding allowances for any other reason. 

Here are some examples of lifestyle changes which could impact withholding allowances: 

Marriage  Divorce  Birth or adoption of a child  Loss of an exemption Purchase of a new home  Retirement  Filing Chapter 11 bankruptcy

 

For additional assistance as to whether you can claim exemption from withholding, you can refer to IRS Publication 505 Tax Withholding and Estimated Tax. This guide will walk you through a series of “yes” and “no” questions to help you decide whether you can claim exemption from withholding.

When Will New W-4 Form Allowances Go into Effect? 

Any change to the W-4 form entered through Workday will take effect the next available paycheck.

 

Employees can claim exemption from withholding only if both of the following situations apply:

 They had a right to a refund of all federal income tax withheld in the previous tax year because they had no tax liability They expect a refund of all federal income tax withheld for the current tax year because they expect to have no tax liability 

Who is Exempt from Withholding?

 If an employee claims exemption from withholding, employers will not withhold Federal income tax from their wages. The exemption applies only to income tax and not to Social Security or Medicare taxes. 

Payroll Taxes

New employees must indicate both state and federal tax exemptions in Workday. If you make no selection, UVA must withhold taxes at the default rate of single with zero exemptions.

All employees may change their current tax withholding rate at any time. Elections remain in effect until a change is made.

You can change your elections in Workday.  Use the "Show Me How" feature if you need assistance.


Exemptions

You can claim exempt from income tax withholding if you meet IRS or State guidelines. By claiming exempt, no federal and/or state taxes will be withheld.

Find information on claiming exemption from withholding on the requisite tax forms.

Renewal

Exempt status expires at the end of the every calendar year and must be renewed by February 15 to maintain exemption for the next calendar year If you do not renew your exempt status by February 15, UVA must begin withholding income taxes during the next pay period at the default maximum withholding amount, single with zero exemptions No refunds will be given by the Finance-Payroll Department

 

The Finance-Payroll Department cannot give tax advice. If you need tax assistance, contact the IRS or seek your own tax or legal counsel.


Resources

IRS Withholding Calculator

Overwithheld Income Taxes

UVA is required to withhold income taxes from an employee’s paycheck according to the employee’s withholding selections. It is your responsibility to complete these tax forms in Workday and to do so correctly.

If you fail to complete the forms and income taxes are overwithheld as a result, the Finance-Payroll Department will not refund any of the taxes withheld.

If eligible, you can be refunded for any overwithheld income taxes when filing a personal income tax return for that year.

Full-Time Students

Information regarding the exemption from Social Security and Medicare (FICA) taxes for students can be found in the Student FICA exemption policy.

Student workers with active faculty or staff assignments are not eligible for FICA exemption on any assignment, no exceptions.

Additional Information can also be found on the Student FICA webpage

 

Payroll Help

NEED HELP?  WE HAVE A SOLUTION!

Payroll Specialists staff the HR Solution Center, so that all UVA employees have a helpful resource available for routine questions and tasks related to payroll and timekeeping.

Phone:
434-243-3344
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As of January 1, 2022, the Common Paymaster relationship is handled via a configuration in Workday instead of as a manual intervention.  As a result, employees working for both UPG and ACD will only make one W-4 election.

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