III. Reduce Amount by Additional Non-Taxable Wages. Compensatory damages are not reported as taxable income, included in FICA wages or subject to income tax or FICA withholding. Liquidated damages, interest and legal fees are reported as taxable compensation but not included in FICA wages and not subject to FICA withholding.
* Backpay is reported as taxable compensation, included in social security and Medicare (FICA) wages and subject to income tax and FICA withholding. Therefore, you may need to review all earnings statements for the applicable calendar year to find these amounts:Ģ. Military leave payments or adjustments marked 'Med/SS Non-Tax'ģ. Non-taxable grievance/settlement payments*Ĥ. Retirement contribution earned through county - Judges only These amounts are found in the 'Earnings' section of your earnings statement. However, they will only be found on the earnings statements for the periods in which you received these types of wages. II. Add back wages that were exempt from social security and Medicare but not from income tax. Begin with social security/Medicare taxable wages, whichever is greater, shown in box 3 or 5 of the W-2.
