Entering W-2: Box 14 Local Government Retirement Plan

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My wife works for a local government. Instead of paying into Social Security, she pays into a county retirement plan. On her W-2, the amount she contributes to the retirement plan is listed in Box 14. I have been told previously that I am to pick the "Other - not listed" reason for this. By picking this option, we end up owing a significant amount of money to the federal government. Is this the case other people have run into? It almost feels like I should be picking the option that makes it a mandatory state or local tax (which results in us not owing). Any insight regarding this would be appreciated. We have already filed and paid for this year. So, if I did this wrong, I will have to file an amended return. Thanks.

TurboTax Deluxe Online

VEpling2Answer

Level 6

You have reported this correctly. Even though contributions to government retirement systems are often mandatory it is not considered a tax. These contributions are still retirement plan contributions which your wife will get back or receive a benefit from once she retires. If they are pre-tax contributions then your wife's wages in box 1 have already been reduced.

Your tax due probably decreases when you indicate that these are mandatory state or local taxes because the amounts are transferred to your Itemized Deductions as a state/local tax. Unfortunately, this is not the correct tax treatment for these contributions.

elesia-st

Level 2

Is this still the case? Are you still owing a large amount every year? I work for a local government that does not have social security only pension and now it feels like I am being penalized for following the system. I owe a large amount. Pension and Insurance are in box 14. Turbo Tax seems confused by not having social security tax withheld when I talked to them. This can't be right....

VEpling2

Answer

Level 6

msdos62

Level 2

So which is the correct selection? Other or ??

LenaH

Alumni - Expert

If the categories for a particular deduction in Box 14 is not listed as an option, then you should select the category labeled Other - not classified.

Generally, the Box 14 items of your W-2 are for informational purposes and do not affect your income tax return.

For more information, please see What is box 14 on my W-2 for?

@msdos62

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