According to the IRS website (https://www.irs.gov/retirement-plans/common-errors-on-form-w-2-codes-for-retirement-plans) your employer used the wrong code for Box 12. IRS says Simple Plans should use Code D, not Code S.
If you change the code in TurboTax, it will go through (print out the above page from the IRS website to keep with your tax records in case of audit).
Common mistakes
During Form 5500 examinations, IRS agents found employers using incorrect codes in Box 12 of Form W-2, for example:
- code D for 401(k) elective deferrals incorrectly included 403(b), 457, or non-qualified amounts.
- code E for 403(b) contributions but did not have a 403(b) plan.
- code H to incorrectly report health benefits; code H is for elective deferrals to a 501(c)(18)(D) tax-exempt organization plan. (In fact, a recent Employee Plan Compliance Unit project found that only 6 % of employers who used this code actually contributed to a 501(c)(18) plan.)
- code S for a SIMPLE 401(k); the correct code for a SIMPLE 401(k) is code D.
