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How to Enter Statutory Employee Income from a W-2 in TaxSlayer | 1040-SR (Web-Based)
How to Enter Statutory Employee Income from a W-2 in TaxSlayer | 1040-SR (Web-Based)
Daisy Macapangal avatar
Written by Daisy Macapangal
Updated over 2 weeks ago

What Is a Statutory Employee?

A statutory employee is an independent contractor who is treated as an employee for tax withholding purposes. Unlike regular W-2 wages, statutory employee income is reported on Schedule C instead of Form 1040, Line 1 (Wages).

If a taxpayer receives a Form W-2 with the Statutory Employee box (Box 13) checked, follow these steps to correctly enter it in the software.


Steps to Enter Statutory Employee Income in the Software

  1. Access Form W-2

    • From the left-side menu, search for "W-2" and select Form W-2, Wage and Tax Statement.

    • Alternatively, navigate to Income and select Form W-2.

  2. Enter W-2 Information

    • Input all the details from Form W-2 as usual.

    • Scroll down to Box 13 and check the box for Statutory Employee.

    • (Checking this box ensures that these wages are not included as regular wages on Form 1040).

  3. Continue to Schedule C

    • Click Continue after entering the W-2 details.

    • A message will appear stating that statutory employee income (Box 1 on W-2) must be reported on Schedule C.

    • Click "Create a Schedule C" when prompted.

  4. Enter Income on Schedule C

    • From the Schedule C menu, select Income.

    • Locate the field "Income Reported to You on Form W-2 as a Statutory Employee" and enter the Box 1 amount from Form W-2.


Important Notes on Statutory Employee Income

✔️ Do Not Combine With Self-Employment Income

  • Statutory employee wages should be reported on a separate Schedule C and not combined with self-employment income.

✔️ Do Not Include in Schedule SE

  • Social Security and Medicare taxes should already be withheld and reported on Form W-2, so statutory income should not be carried over to Schedule SE (Self-Employment Tax).

By following these steps, taxpayers can correctly report statutory employee income while ensuring compliance with IRS filing requirements.

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