Section 125

Forum|Forum|5 years ago
March 31, 2021
1 reply
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When going through Turbo Tax, I'm asked how both the Section 125 amount and the LTD amount (both in Box 14) on my W2 are classified. Several of the classifications refer to states other than Indiana where I worked. Which of the following would be the most accurate classification for each?

-State deductible employee expense
-Wages for SDI, VPDI, TDI, UI, etc.
-Code U, V, W, X, Y, Z
-Other deductible state or local tax

DianeW777

Level 15

Indiana (IN) does not tax Section 125 elections contributions. IN Employer Handbook

An example of compensation that is excluded by the Act is the value of Cafeteria (Section 125) Benefit plans.

Indiana may allow a credit for long term disability premiums. IN Deduction for Long Term Care

If there is no specific code you should check 'Other deductible state or local tax' then watch the questions in the IN state interview.

Also, check the wages in Box 1, of your W-2 and compare them to the wages in Box 16 to see if they match or are different.

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tooheyClockAuthor

Level 2

Thank you. What is the Indiana State Interview? I notice that the amounts in Boxes 1 and Boxes 16 for all of my W2s are the same. Would this for any reason be of concern?