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kbustaar
New Member

401k contribution

I feel like I am not getting my 401k contributions ($23k) box D taken off my gross box 1 (108K) is it because the medical Box DD  (20K) is costing me like it is income & washing out my 401K benefit?
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Accepted Solutions
AndreaG
New Member

401k contribution

The information reported in box 12 of your W-2 with code DD reports your health insurance premium. This amount includes both the amount you paid for health insurance as well as the amount that your employer paid towards your premium, if any. 

The amount of income that should be reported in box 1 of your W-2 depends on whether or not the amount that you paid towards your health insurance premium was deducted from your salary. If your premiums are paid through a qualified cafeteria plan then the premiums are deducted from your salary and will NOT be reported in box 1 or box 3 of your W-2. If your premiums are NOT paid through a qualified cafeteria plan, then the amounts you paid will not impact the amount that is reported in box 1 of your W-2.

Any amounts that your employer paid towards your health insurance premiums are NOT reported in box 1, box 3, or box 5. These amounts are included in box 12 only for informational purposes.

Your 401(k) contribution that is reported in box 12 of your W-2 will NOT be reported in box 1 but it will be reported in box 3 and box 5 because although the contribution isnt taxable for federal income tax purposes, it is subject to social security and medicare tax so you will see it reported in boxes 3 and 5 of the W-2. 

 example 1:  if gross earnings were $53,000 in 2016 , and you made a 401(k) contribution of $3000; then box 1 will report $50,000 and box 3 and box 5 will each report $53,000.

 example 2: if gross earnings for 2016 were $53,000 and you made a 401(k) contribution of $3000 and you had $4000 of health insurance premiums deducted from your salary, then box 1 will report $46,000 and boxes 3 and 5 will each report $49,000.

example 3: if gross earnings for 2016 were $53,000 and you made a 401(k) contribution of $3000 and you paid $4000 of health insurance premiums but the amount was NOT deducted from your salary, then box 1 will report $50,000 and boxes 3 and 5 will report $53,000. In this case because health insurance premiums that you paid were NOT deducted from your salary, they wont impact what is reported in box 1. 

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1 Reply
AndreaG
New Member

401k contribution

The information reported in box 12 of your W-2 with code DD reports your health insurance premium. This amount includes both the amount you paid for health insurance as well as the amount that your employer paid towards your premium, if any. 

The amount of income that should be reported in box 1 of your W-2 depends on whether or not the amount that you paid towards your health insurance premium was deducted from your salary. If your premiums are paid through a qualified cafeteria plan then the premiums are deducted from your salary and will NOT be reported in box 1 or box 3 of your W-2. If your premiums are NOT paid through a qualified cafeteria plan, then the amounts you paid will not impact the amount that is reported in box 1 of your W-2.

Any amounts that your employer paid towards your health insurance premiums are NOT reported in box 1, box 3, or box 5. These amounts are included in box 12 only for informational purposes.

Your 401(k) contribution that is reported in box 12 of your W-2 will NOT be reported in box 1 but it will be reported in box 3 and box 5 because although the contribution isnt taxable for federal income tax purposes, it is subject to social security and medicare tax so you will see it reported in boxes 3 and 5 of the W-2. 

 example 1:  if gross earnings were $53,000 in 2016 , and you made a 401(k) contribution of $3000; then box 1 will report $50,000 and box 3 and box 5 will each report $53,000.

 example 2: if gross earnings for 2016 were $53,000 and you made a 401(k) contribution of $3000 and you had $4000 of health insurance premiums deducted from your salary, then box 1 will report $46,000 and boxes 3 and 5 will each report $49,000.

example 3: if gross earnings for 2016 were $53,000 and you made a 401(k) contribution of $3000 and you paid $4000 of health insurance premiums but the amount was NOT deducted from your salary, then box 1 will report $50,000 and boxes 3 and 5 will report $53,000. In this case because health insurance premiums that you paid were NOT deducted from your salary, they wont impact what is reported in box 1. 

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