We have one employee who is a broker and is paid on commission only. When he was hired, the bank gave him a loan with the understanding that for every year he remained an employee, a portion would be forgiven and reported to him as income. Our question is, should this be reported through payroll on a W-2? Should it be recorded in a separate box on the W-2? Would all applicable taxes be deducted?

I would treat it the same as a bonus. It is ordinary income subject to applicable taxes, and if enrolled in a 401(k) subject to contribution and the same rate as the normal contribution rate. Therefore, it would be reported on the W-2 in Box 1 - Wages, tips, other comp.

Thanks, once again, for your help!