Americorp and strange W2

[jasdlm]

I have a W2 for $2,700, but Box 1 is empty, and the SS and Medicare boxes each have $2,700 along with the relevant w/holding.  Client (kid of a client) tried to do her own return last year, and it rejected, so brought to me.  I think the W2 is incorrect.  I've never seen a W2 with $0 in box 1 but amounts in 3 - 6.  At the risk of making myself look ill-informed, what am I missing?  In searching online, it seems that box 1 should have been completed, but not box 3 and 5, and it seems that the almost $200 fica/medicare withheld shouldn't have been withheld.

Yikes!  Do I need to give up my preparer's license?

Thanks much.

[Lion EA]

Did the employee contribute his full wages to a 401(k) or 457 plan, health/dental/vision insurance, flexible spending accounts, or retirement and tax deferred savings plans? Is that even allowed?! If so, his contribution would NOT appear in Box 1 but would be taxed in Boxes 3-6.

[jasdlm]

Nothin in any box 12 or box 14.  Hmmm.

[Lee B]

If your client's daughter goes to the Americorp website, there should be an explanation for her W 2.

Americorp has different programs with some strange tax rules that apply.

[jasdlm]

Thanks so much!  I scoured the website and found examples of Box one with no Box 3 but not Box 3 with no Box 1.  Hmmm.

[Lion EA]

Any Form W2-C exist for this employer to this employee, that used along with the W-2 you have would solve the mystery?

[Lee B]

Either ignore the W 2 and don't file or paper file the return.

[joanmcq]

Or put $1 in box 1

[mcbreck]

I don't think you can efile with $0  in Box 1. We've talked about this previously to just enter $1. Only time I ever had one like yours, it was due to stock options where they withheld SS and MEDA from the amount but they didn't have any earned income. Is there a stock transaction report?

[jklcpa]

It's more likely that this is some sort of stipend that isn't taxable as federal wages but had the SS & Medicare withheld. As others said, either ignore the w-2 completely or enter $1 as federal taxable wages. Personally I'd ignore it if there isn't anything in any other boxes that needs reporting.

Nothing on the that W-2 that affects any state return?

[jasdlm]

 Thank you all!  I put $1 in box one and shipped it off.  No state return affected.  Same organization did her 2023 return and reported all income in all 3 boxes.  I still think both year's W2s are incorrect, as I think the money was her living stipend, but unless/until she gets me her agreement, it stands as reported.  Thanks again!