The NYC Payroll website offers the following explanations of the codes for Box 14 of the W-2:
New York IRC 125 /SEC 18
These are the payroll deductions covered under the Internal Revenue Code Section 125 for flexible spending account programs.
These include:
- Health insurance premiums
- Dependent Care Assistance Program (DeCAP)
- Health Care Flexible Spending Account (HCFSA)
If you added a domestic partner to your health insurance, a portion of the amount paid by the City is taxable and is included in Box 14.
The amount in the IRC125 box is treated on a pre-tax basis for federal income purposes. It reduces your taxable wages (Box 1) and social security and Medicare wages (Boxes 3 and 5). The reduction in year-to-date earnings shows in your W-2, not in your pay statement.
This amount is subject to state and City taxes and must be added back to the taxable wages in Box 1 when you file your taxes. The amount for DeCAP is shown in Box 14 and Box 10.
IRC414(h) for Pension Contributions
These are the payroll deductions covered under the Internal Revenue Code Section 414 for pension contributions.
If you are a pension member, your taxable wages in Box 1 are reduced by the amount of your pension contributions. Your contributions shown in Box 14 are not subject to federal income tax, but are subject to FICA (social security and Medicare), state, and local taxes.
To obtain your taxable wages for New York State and City, add the amount in Box 14 to that in Box 1. Only standard pension deductions and certain "buy back" deductions are included in the IRC414H amount. Pension loan repayment deductions are not included.
