1. IRC 125 - cafeteria plan -you pay for some things pre-tax, maybe HSA or FSA among other options. In Sections 125 and 223 – Cafeteria Plans, Flexible Spending: Section 125(d)(1) defines a cafeteria plan as a written plan under which all participants are employees and the participants may choose among two or more benefits consisting of cash and qualified benefits. Section 125(f) defines a qualified benefit as any benefit which, with the application of section 125(a), is not includable in the gross income of the employee
2. You can add the values together. You probably have a couple of different sec 125 items, one value for each. This income is taxable to NY and NYC so it must be included on your w2 screen in box 14 and select IRC125.
The amount in the IRC 125 Box is subject to New York State and City taxes. The NYS income tax instructions direct the income tax filer to report wages as they appear on the W-2 in Box 1 then to add back the amount to arrive at New York State/City taxable wages from Tax Frequently Asked Questions - OPA
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