W-2 for the income exempt from federal taxes

Forum|Forum|2 years ago
April 1, 2024
3 replies
7 views

My client received a W-2 for an income that is exempted from Federal tax based on the US government arrangements. However, the W-2 shows Federal taxes were withheld. How can I report this income and claim refund for the federal taxes withheld?

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dkh

Level 15

Confused.... the income is exempt from federal taxes because of the type of arrangement the company has with the government or just an arrangement your client has with the government?

Because if it is the company, then why would the company withhold federal taxes on federal exempt wages ??

What is in box 1 of the W2 ?

B

BabakAuthor

Level 5

It's because of the type of arrangement the company has with the government. Box 2 is almost 5% of the amount in box 1.

BobKamman

Level 15

Off the top of my head I don't know any types of income for which the federal government hands out dispensations, at least for income tax. Maybe FICA taxes? Maybe the company is exempt from mandatory withholding, but did it on a voluntary basis?

qbteachmt

Level 15

"based on the US government arrangements"

"the" arrangement is some sort of secret? Which or what arrangement is this? No one knows what this is in reference to, if you don't give some details. "The company" sounds like the Mafia or some secret nongovernment entity.

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