Search Help Topics:

Taxes for Excess Golden Parachute Payments are reported to the IRS on Schedule 4 (Form 1040), Line 62. TaxAct supports the entry of excise tax on excess golden parachute payments reported on Form W-2, Box 12, Code K and excess golden parachute payments reported on Form 1099-MISC, Box 13.

Per the IRS Instructions for Form 1040, page 104:

9. Golden parachute payments. If you received an excess parachute payment (EPP), you must pay a 20% tax on it. This tax should be shown in Box 12 of Form W-2 with Code K. If you received a Form 1099-MISC, the tax is 20% of the EPP shown in Box 13. Identify as "EPP".

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal 
  2. Click Wages and Salaries  in the Federal Quick Q&A Topics menu to expand the category and then click Wage income reported on Form W-2
  3. Click New Copy of Form W-2 (Desktop users click Add) to create a new copy of the form or Review to review a form already created
  4. Click Quick Entry or Step-by-Step Guidance
    1. If you select Quick Entry, fill in the form to match your paper copy of Form W-2 and be sure to scroll down to answer questions.
    2. If you select Step-by-Step Guidance, the program will proceed with the interview questions for you to enter or review the appropriate information.

If you received a Form 1099-MISC with the excess payment listed in Box 13, to enter this into TaxAct, please do the following:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal  
  2. Click Form 1099-MISCin the Federal Quick Q&A Topics menu
  3. Click New Copy of Form 1099-MISC (Desktop users click Add) to create a new Form 1099-MISC
  4. Click Form 1099-MISC Quick Entry to open the Quick Entry window
  5. Enter all of the applicable information from your Form 1099-MISC, including Box 13
  6. Close the Quick Entry window
  7. Assign the Form 1099-MISC you just entered to the proper form from the Assigned schedule or form drop-down list
  8. On the screen titled What type of income was reported on this Form 1099-MISC?, make the appropriate selection
  9. If you selected Other non-business income on the previous screen, check the box to confirm that the income is non-business income and is not subject to self-employment taxes

The TaxAct program will automatically calculate the 20% tax based on the amount entered on Form 1099-MISC, Box 13 and transfer the tax amount to Schedule 4 (Form 1040), Line 62. When you print the return, you will see "EPP" and the amount on Line 62.

Note that any link in the information above is updated each year automatically and will take you to the most recent IRS version of the document at the time it is accessed.


Was this helpful to you?