W2 compensation - child support

Hello.  I am working on a PSP that uses W2 compensation with no exclusions.

I have the payroll report and W2s for all employees.  There is an employee who had child support payments deducted from payroll.  The payroll report shows his gross compensation of $5,000 and child support payments of $1,000.

His W2 reports $4,000 taxable income in Box 1. I thought it should be $5,000, since the garnishment is post tax, not pre-tax.

Does anyone out there agree with my thinking?

Thank you!

2 hours ago, perplexedbypensions said:

Hello.  I am working on a PSP that uses W2 compensation with no exclusions.

I have the payroll report and W2s for all employees.  There is an employee who had child support payments deducted from payroll.  The payroll report shows his gross compensation of $5,000 and child support payments of $1,000.

His W2 reports $4,000 taxable income in Box 1. I thought it should be $5,000, since the garnishment is post tax, not pre-tax.

Does anyone out there agree with my thinking?

Thank you!

Sure sounds wrong to me; the employer should be asked why it is reflected that way.

Child support payments are neither deductible by the payer nor taxable to the recipient. When you calculate your gross income to see if you're required to file a tax return, don't include child support payments received.

Caution, this could mean that whoever prepares the W-2s is not familiar with the rules.  The original poster might consider whether to (1) alert the plan sponsor to get some advice from its auditor, and/or (2) assume future W-2s could include this (and other) errors.  IOW, think outside the box.