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Level 1

Is severance pay on W2 considered as retirement plan for tax purposes

Is severance pay on W2 considered as retirement plan for tax purposes?  I received 3 months of severance pay in 2017, and on my W-2 Box 13 had retirement plan checked, is that correct???  Thanks.

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Level 7

Is severance pay on W2 considered as retirement plan for tax purposes

No.  Severance pay is ''separation'' pay given to employees by some employers upon termination of employment.  If Box 13 was checked for Retirement plan this means that you participated in your employer's retirement plan during the year. This might be a 401(k) plan, 403(b) plan, SEP-IRA, SIMPLE-IRA, or another type of pension plan. If you participate in a retirement plan, your ability to deduct contributions to a traditional IRA may be limited based on your income.

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Level 7

Is severance pay on W2 considered as retirement plan for tax purposes

No.  Severance pay is ''separation'' pay given to employees by some employers upon termination of employment.  If Box 13 was checked for Retirement plan this means that you participated in your employer's retirement plan during the year. This might be a 401(k) plan, 403(b) plan, SEP-IRA, SIMPLE-IRA, or another type of pension plan. If you participate in a retirement plan, your ability to deduct contributions to a traditional IRA may be limited based on your income.

Level 1

Is severance pay on W2 considered as retirement plan for tax purposes

Thank you, TurboTaxDawnC.  I also believed that there was a mistake on that W-2.  I called company benefits and their people also feel that box was checked in error, so told me to call Payroll Dep't. to get a corrected W-2 made.  So now I have a Case Number there.  Thanks.
Level 7

Is severance pay on W2 considered as retirement plan for tax purposes

You are welcome - the check in that box doesn't mean that your severance pay is retirement income - it only means that you were enrolled in a retirement plan..