SECTION 4. DEFINITION OF

PARAGRAPH (e)(1) WAGES AND CORRELATION WITH BOXES ON FORM W–2

.01 Definition of paragraph (e)(1) wages . Paragraph (e)(1) wages means, with respect to any person for any taxable year of such person, the sum of the amounts described in § 6051(a)(3) and (8) paid by such person with respect to employment of employees by such person during the calendar year ending during such taxable year. See § 1.199–1(e)(1) of the regulations. Thus, paragraph (e)(1) wages include: (i) the total amount of wages as defined in § 3401(a); (ii) the total amount of elective deferrals (within the meaning of § 402(g)(3)); (iii) the compensation deferred under § 457; and (iv) for tax years beginning after December

plified calculation while the second and third methods (the modified Box 1 method and the tracking wages method) provide greater accuracy. After paragraph (e)(1) wages are determined under one of these methods, the amount of W–2 wages is then determined by applying § 1.199–2T(e)(2) of the temporary regulations.