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How to process moving expense reimbursements in payroll so properly report on W-2 in Microsoft Dynamics SL

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Posted on by Vickie Thomas

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For W-2 purposes, nonqualified moving expense reimbursements to employees must be reported in boxes, 1, 3 and 5 of Form W-2. They must also be processed to have federal and state income tax withheld at supplemental (bonus) tax rates, and social security and Medicare taxes withheld. We need to know how to set up the earnings codes and tax codes to process these payments properly.

In addition, qualified moving expense reimbursements must be reported in box 12 of W-2 with Code P.

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Casey2 5 on at

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Re: How to process moving expense reimbursements in payroll so properly report on W-2 in Microsoft Dynamics SL

Create a new earnings type for Moving Expenses. You can make this earnings type a Non-Wage or Regular type attach the appropriate deductions (Federal, FICA & Medicare, SIT) in the grid which will then report those earnings as taxable on the 941 / W2’s. (Non-wage earnings type without federal & state deductions attached do not get reported on the 941/W2’s). On the W-2 Control Data tab of the Earnings Type Maintenance screen choose the appropriate box number and box letter.

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