Employer reporting

[Guest JG44]

Writing from a small nonprofit org, trying to implement the rules correctly but we're very short-staffed to do research, so if anyone knows an answer, I'd be so appreciative:

We've offered a 403(b) to our employees for years, with an elective pretax payroll withholding which we then remit to the 403(b) administrator, who deposits and invests the funds. One of our employees has just opened a ROTH IRA instead, and when I asked the payroll provider to set this up, they set it up as a pretax withholding as well. When I called to ask them to change to after-tax pay, I found they had never heard of ROTH IRA, and they asked me where they should report it on the W2 at year-end.

I've searched the IRS website, which has an FAQ that says "contributions to a designated Roth account must be separately reported on Form W-2 in accordance with the instructions thereto." I've read through the W-2 instructions but all I could clearly glean was that the contributions should still be included in taxable income, but no clear info on whether/how to report in box 12.

If anyone has any experience or guidance on this, it would be a huge help, we really want to set this up appropriately but I don't have the time or expertise to research much further, was expecting the payroll company would know what to do.

Thanks in advance for any suggestions!

[pmacduff]

JG44 - here are the instructions for the 2007 W-2 forms. I think you will find your answer on pgs. 11 & 12.

Hope this helps.

iw2w3.pdf