414(h) employee contributions in W-2 Box 12 Code D

Forum|Forum|6 years ago
February 20, 2020
10 replies
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My wife has access to the TCRS K-12 Legacy plan which seems to be categorized as a 414(h) under the IRS code. Last year and this year, her mandated employee contributions to this plan were included in Box 12 Code D on her W-2 which seems to be only for 401(k) contributions. For 6 years prior to 2018, where she also qualified for this plan, her mandated contributions were not reported in Box 12 Code D but in Box 14 instead.

In 2019, she also had access to a 401(k) which she maxed out. So, her 2019 W-2 has ~$22,000 in Box 12 Code D [$19k 401(k) + ~$3k TCRS]. TurboTax throws a warning because this is greater than the expected max.

Her payroll department has been researching this for several weeks, but does this seem like an error? Should these 414(h) contributions appear in Box 12?

If we are not able to get a revised W-2, how should we address this on our tax return?

Thanks.

Best answer by SteamTrain

Last year (2018) sounds like a major foul-up if 414(h) were listed as box 12 code D. You may have to amend 2018 taxes if/and/when they issue a corrected W-2 for 2018 (And pay some back to the Feds)

I "think" they really need to get their W-2 reporting in order. 414(h) contributions should only be in box 14.

I don't know if there would ever be a way to clear this year thru the software, other than the employer issuing a corrected W-2. They need to fix their W-2 (with a W-2C) before you can file. if they delay too long, you may need to file an extension to give them more time to get it fixed. (When a W-2C is issued, it usually just shows the boxes that it fixes, and you just edit the main W-2 to include those fixed boxes).

@dmertz Does this sound about right?

SteamTrainAnswer

Level 15

Last year (2018) sounds like a major foul-up if 414(h) were listed as box 12 code D. You may have to amend 2018 taxes if/and/when they issue a corrected W-2 for 2018 (And pay some back to the Feds)

I "think" they really need to get their W-2 reporting in order. 414(h) contributions should only be in box 14.

@dmertz Does this sound about right?

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

dmertz

Level 15

Yes, SteamTrain, your response sounds right. The instructions for box 12 explicitly state that 414(h) contributions are not be included in box 12 but are to be included in box 14 as information to the employee:

"Do not report in box 12 section 414(h)(2) contributions (relating to certain state or local government plans)."

Code D is only for 401(k) contributions. 414(h) applies only to 403(b) contributions. If the 403(b) contributions were not picked-up by the state under 414(h) they would be reported with code E, not code D.

Is it possible that the employer mistakenly deposited the 403(b) contributions into the 401(k) instead?

CjzVWqHmUDRYG7nmAuthor

Level 2

Thanks.

I don't think the TCRS K-12 Legacy plan has a 403(b). I think (I am not a tax professional) it is a 414(h) pension with a 401(k) option. Employee contributions to the pension are mandated at 5% of salary. 2019 was the first year she elected to use the 401(k) (mostly because we didn't realize it was an option).

So, I don't think any funds were sent to a 401(k) in 2018. Only the 5% to the 414(h) pension in 2018.

In 2019, we saw the $19k land in her new 401(k) account as well as the 5% land in her pension account.