The program assumes that Deductions: “Salaries and wages” (Screen 15, code 34), COGS: “Cost of labor” (Screen 14, code 3), “Compensation of Officers” (Form 1120S, page 1, line 7), Farm Income: “Labor Hired” (Screen 18, code 17), RRE: “Wages and salaries” (Screen 21, code 15), and Other Rentals: “Wages and salaries” (Screen 22, code 15) represent Section 199A W-2 Wages. Section 199 W-2 Wages are included on the Schedule K, line 17d supporting statement and are allocated to the Schedule K-1 based on the shareholder's percentage of ownership. The entry in this field overrides the automatic calculation of Section 199A W-2 Wages.

NOTE: Special rules apply to the calculation of W-2 wages, and the amount of wage expense entered may not represent W-2 wages for this purpose.  For example, W-2 wages from Statutory Employees should not be included in Section 199A W-2 wages. Additionally, there may be some areas of Form W-2 that may also need to be included in Section 199A W-2 wages. Refer to section 6051(a)(3) and (8) and Notice 2018-64 for more information.