TurboTax does not support the calculations for Code Z on Form W-2, unfortunately. If you are using the online edition, you will have to handle it manually by submitting the tax forms by mail. If you are using the desktop, you can use overrides in TurboTax desktop-CD/Download, then file your tax return by mail. Unfortunately, you will not be able to E-file your tax Return because TurboTax does not support the calculations for Code Z on Form W-2
Per instructions,
Z: Income under a nonqualified deferred compensation plan that fails to satisfy section 409A. This amount is subject to an additional 20% tax plus interest.
See instructions on how to report, click here: https://www.irs.gov/pub/irs-pdf/iw2w3.pdf , page 21
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