Generally most United Nations member countries exempt wages by the United Nations (UN) from tax, however the United States does not. Congruently, the UN is not subject to the requirement to withhold tax from wages paid to US citizens per the International Organization Immunities Act (22 USC 288).
Due to this, the UN does not withhold any federal or state tax from the wages of its employees that are subject to taxation by the United States. This includes federal income tax as well as Social Security and Medicare taxes.
Instead of being issued a W-2, the UN provides a statement of taxable earnings, which acts as a substitute W-2 when preparing your return.
When preparing your return you will enter the statement of taxable earnings as a substitute W-2. Additionally, you will need to complete Schedule SE to calculate self-employment taxes that pose as contributions to the Social Security program.
How to enter taxable earnings?
- Federal
- Income - "Select My Forms"
- W-2
- Enter the EIN or select "Add A W-2 Wage Statement"
- If the statement includes a a Federal EIN, enter it. Otherwise enter all zeroes for the EIN.
- Select "Enter Manually"
- Choose who the form is for (if applicable)
- Check the box at the top of the page "This is a substitute W-2"
- Enter the taxable earnings in Box 1
- Enter zeroes for the Social Security and Medicare Wages
How to complete Schedule SE?
To complete the Schedule SE within the program:
- Federal
- Other Taxes
- Self Employment Tax, Schedule SE
- Choose who the schedule is for (if applicable)
- Gross nonfarm income
What if I paid quarterly estimated taxes to the IRS?
If you have arranged for the United Nations to make quarterly estimated tax payments, you will report them under the "Payments & Estimates" section.
To report this within the program:
- Federal
- Payments & Estimates
- Federal Estimated Tax Payments
- Enter the amount of estimated taxes paid in the appropriate field(s)
Additional Information:
UN - Frequently Asked Questions