On form W-2 Box 12 code DD I have a negative number what do i do?

[fourdano]

In the review it tags this as unable to enter a negative number but that is what state employer put on W-2

[macuser_22 · Accepted solution]

It cannot be a negative number.  Code DD is the amount that you employer paid for your health care.  It is impossible for what they paid to be a negative amount.   Just leave off the minus sign which is probably just a printing glitch (or a dash and not a negative sign).

[eamaddox91]

I have a client with an employee that cancelled his employer health coverage effective back into the previous year. He was refunded his premiums for the time back to his cancellation date. Therefore, his 12 DD will (and should) be a negative number, although I don't know if QuickBooks will produce the W-2 with a negative number there. Will the IRS accept it this way?

[macuser_22]

Code DD is for employer sponsored health care and has nothing to do with employee premiums.

W-2 instructions:
"Code DD—Cost of employer-sponsored health coverage.
Use this code to report the cost of employer-sponsored health coverage. The amount reported with code DD is not taxable. Additional reporting guidance, including information about the transitional reporting rules that apply, is available on the Affordable Care Act Tax Provisions page of IRS.gov. "

This reports how much the employer spent for health care and cannot be negative.  (A negative number would say that the employer got paid for providing employee health care rether than paying for it - which would be nonsensical.)

[eamaddox91]

I guess I worded it poorly, sorry. The employee's policy was cancelled. The company received the adjustment, but the adjustment included a couple months of 2015 premiums in addition to his 2016 premiums. Therefore, the refund/adjustment for him is greater than the premiums paid during 2016, creating a negative number for the 2016 health costs pd on his behalf. What to do?

[macuser_22]

Nothing for 2016 should on a 2015 W-2.   Like I said, it cannot be a negative number.  The W-2 is wrong if it incudes 2016. , however code DD is informational only and makes no difference whether it is entered or not.   The intent of code DD is part of the ACA (Obomacare) and is simply to notify the employee how much the employer pays for their health insurance.

When you say "client" - you are not using TurboTax to prepare tax returns for clients are you?   That violates the license agreement and IRS regulations for self prepared software.

[eamaddox91]

No, I'm not using TurboTax to do returns for clients. I was just searching the web for answers to this situation and this site popped up in the results. I used TurboTax for my daughter's return this year, as I have in previous years.

The 2015 W-2 only includes the 2015 health costs, but later, in March 2016 some of those 2015 costs were refunded to the company.  This will cause the 2016 number to go negative. I'd rather not do an amended 2015 W-2 if I don't have to. Should I just do an adjustment for 2016 to show it as zero in this box? Otherwise it will be negative.

[macuser_22]

You won't get a 2016 W-2 until 2017.   Wait until you get it.   It should not be negative since any 2015 reimbursement should not be reported on a 2016 W-2.   Like I said, it is information only so you can leave code DD off altogether since it does not go on your tax return at all.