Taxes for Excess Golden Parachute Payments are reported to the IRS on Schedule 2 (Form 1040) Additional Taxes, Line 17k. TaxAct supports the entry of excise tax on excess golden parachute payments reported on Form W-2 Wage and Tax Statement, Box 12, Code K, and excess golden parachute payments reported on Form 1099-MISC Miscellaneous Income, Box 13.

Per IRS Instructions for Form 1040 and 1040-SR, page 98:

11. 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.”

If you received a Form W-2 with the excise tax listed in Box 12, Code K, see Form W-2 - Entering in Program.

Report your Box 13 Form 1099-MISC amount (if you need help accessing Form 1099-MISC in the TaxAct program, go to our Form 1099-MISC - Entering in Program FAQ):

1. From within your Form 1099-MISC, continue with the interview process until you reach the screen titled 1099-MISC: Enter information on form.
2. Enter the Box 13 amount.

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 2 (Form 1040) Additional Taxes, Line 17k. When you print the return, you will see "EPP" and the amount on Line 17.

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