Is the "D17" actually "DD"? This is a legitimate code in box 12 on your W-2 (D17 is not).
I have checked my W2 again. Here is the clear picture... 12a - DD $xxx, 12b - D 17 $xxx, 12c - D $xxx
Then that's what you should report. Still, I can imagine DD looking like D 17. TT says, "The "17" in code D17 refers to a contribution made for 2017 and is a redundant indication since code D by itself on a 2017 W-2 already means a contribution for 2017. Ignore the "17" and select code D from TurboTax's drop-down box. [This doesn't quite explain your situation because it refers to a 2017 W2, but it gives a pretty good hint.]" It appears this would be related to last year, so your D17 is from one tax year (not this one) and the D is for this tax year (no need for an 18). So, you should type the D17 in, but select "D" from the drop-down box, which you also will select for 12c.
First part is correct. D corresponds 2018 and D17 corresponds to 2017 (messed up by employer).
Now, on the second part How/Where can I can type the D17. There is no option or place for that. I only see the letter code D to be selected from the dropdown and the corresponding column only takes the Dollar Amt.
So, how can I indicate the "17" in the tax form, where "17" is reflected in the W2 ? Without the "17" the software is indicating that I have made excess contribution, which is how IRS would also then interpret ?
You mean that your employer admits that the D is for contributions to your 401(k) plan in 2018 and that D17 is for the 401(k) plan in 2017? Did your employer remove both years' contributions from Wages in box 1 (probably not)? TurboTax doesn't have an option for D17 because employers are not supposed to mix years on their tax documents. If your employer removed the 2017 contribution from Wages on your 2017 W-2 but forgot to enter the D amount in box 12, then they should have corrected the 2017 W-2 and you may have needed to amend your 2017 return.
Ask your employer if they really intended the D17 for the 2017 401(k) plan contribution, and if they removed it from Wages on your 2018 W-2...
I am checking further, based on the questions raised. I will update soon with some clarification that I get from my employer, along with looking at 2017 W2, paystub etc. Thanks !
Here is what I have found... The D17 amount is for 2017 401K, but the amount was actually deducted in 2018. Basically, taken out of 2018 Income, for 2017 401K contribution.
So, the 2017 401K contribution was less by this amount reflected under D17. Since, it was the employers mistake, they took that amount from the 2018 pay to be accounted for the 2017 401K contribution. They have then reflected this in the W2 as D17.
The answer to the question "Did your employer remove both years' contributions from Wages in box 1 (probably not)? "
YES. They have removed both years' contribution from Wages in Box 1.
I believe that your employer should not have done this. They should have issued you a corrected W-2 for 2017 and now another one for 2018. Then you would need to amend your 2017 return and maybe your 2018 if you have already filed it. @Spino your thoughts?
Well, I am reaching out to my employer again for their input on this. If I include D 17, then the software shows excess 401K payment. If I don't include it, then it could be identified as a discrepancy...
Is this situation, only because of the software ? Wonder if it would be different if this 1040 is done manually, along with the worksheets etc. ?
I am not surprised. Your W-2 indicates twice the "normal" 401(k) contribution for 2018. That is why I don't think they way they did it is correct.
Note that you can go ahead and file if you need to, using some of the strategies discussed, but of course everything is nicer if you can get them to adjust the W2. However, I have noted that some entities, who would no doubt prefer to remain nameless, would rather not make changes, which suggests errors were made, and continue to defend a wrong result, if they feel that has less downside for them as an entity, department, or individual performer. So at the end of the day, you may be faced with taking what you know and what you have and making the best of it. It happens. This year one such entity refused to revise the 1099, which was in error, but did agree to write a letter with the correct facts, and that it was the taxpayer's responsibility as to how to file. We'll see if I actually get the letter, too!
[mention://77326794 @TurboTaxBillMc] I wonder if you could find any basis for why the employer would do this (and it would be correct.) It seems like our taxpayer is going to be frustrated either way. One solution might be to report the excess contribution as listed on the W2, manually deduct the 2017 contribution, and then indicate in a statement why it is being deducted and declare that it will be entered as a correction on the 2017 return if that is what is needed. I think the IRS would take the position that it is the taxpayer's responsibility to file correctly, even if the employer has wrongly reported. Alternatively, the D 17 contribution could be coded as "other." Then it would not carry over to the contribution calculations. The rest of the scenario would still apply (statement, correction as needed to 2017 return, with reference to and documentation of the 2018 W2 on the 2017 1040x (amended return). Here is a relevant link, although not necessarily a clear answer as it is disputed: https://accountants-community.intuit.com/questions/1332132-can-contributions-be-made-to-your-401-k-once-the-tax-year-ends-up-to-the-tax-filing-deadline-but-credit-give-to-the-tax-year-you-are-filing
With more research here is what I found,
1. 401K Makeup contribution is allowed only for Veterans under USERRA Act.
2. For those type of makeup contributions for previous years, IRS does provide the option to enter the 2 digit year, to indicate 401K employee contribution for past years (ex: D 17 D 16) etc. This information is also stated in IRS document GeneralInstructionsForW2 ()iw2w3) Page 18
3. Even for these type of makeup contributions, IRS does not say how those have to be reflected in the tax form. Past years tax return has to be amended for sure.
3. Since I am not a veteran, my employer obviously has made a mistake. Have reached out to them with these addl. info. Will update on how it goes.
Still working with my empyloyer. However, I found that you can make retroactive contributions to 401K for 2017 until April 15, 2018. So, the D17 entry on my 2018 W2 corresponds to 2017 make up contribution. In this situation, should I get a corrected W2C for 2017 (with the updated 401k amount in 12b) and another W2C for 2018 (excluding the D17 entry).
It's not your job to figure out how your employer should file, just how you should file. You have what your employer plans to give you. What you have to do is decide how to report it on your taxes. 1) Don't include the D17 in the D code entry, as this will generate an error. Instead code it as other. 2) If the contribution lowers your taxable income as declared on the W2, then all is well. Better to just accept that than to go back and refile 2017. It probably doesn't, though, so you want to go back and amend 2017, lowering your taxable income in view of the 2017 contribution made and reported in 2018. If you don't want to call a CPA, who might have to just do research with your employer and pay stubs anyway, try first calling your person at your employer, whom you've probably already talked to and ask for help on how to report it. They'll probably help you. (Of course, you're still responsible.)
You should report all codes listed on your w2 exactly as they're stated. This doesn't mean you have to do anything further with the information, although you may. You can report multiple codes in this box, and they may not all be listed. There is an option for code explanation of "other, not listed above".
The reason you want to be sure it is reported just as it is listed is because the IRS also gets this information directly from the entity issuing the W2, and their computers check to be sure they match.