Turbotax handling of W2 with Box 12 DD value

[golloglybg]

This year it seems Turbotax is incorrectly processing W2 with Box 12 DD value, treating the wages as taxable income (1040 - line 😎 and producing a Schedule 1 (line 8t) showing it as taxable income. As compared to last year this was not the case.  It is also producing an error after efiling return to IRS. Anyone else experiencing this?  I had imported W2 via photo which had interpretation issues in Turbotax so I hand entered the W2 information and tried again, same issue. 

[MarilynG1]

A Code DD in Box 12 of your W-2 is the amount your Employer paid for your Health Insurance.  It is informational only and does not affect your personal return.

Any pre-tax insurance premiums you paid should already have been subtracted from your Wages in Box 1.  

An amount on Schedule 1, Line 8t refers to a 'pension or annuity from a non-qualified deferred compensation plan' which would come from an entry in Box 11 on your W-2 and would be taxable income. 

If this does not apply to you, you could delete and re-enter your W-2. 

[golloglybg]

Thank you Marilyn. I understood your reply but my point is this year (and not the prior 2 years) my W2 with DD box 12 is showing up as taxable income with Turbotax creating a Schedule 1 and showing the wages from this W2 on my 1040.  I had not noticed this until my Federal return was rejected due to inconsistencies in the wages. Is anyone else experiencing this issue in Turbotax filings this year?  Also, I read the W2 DD is informational only and perhaps its best I not include in Turbotax so I can file my return - anyone have an opinion? 

Contacting Turbotax has not helped as one agent said its an IRS problem and another just said to "wait and see" if the problem gets fixed.   Neither had any tax expertise. 

[BillM223]

"had imported W2 via photo which had interpretation issues in Turbotax so I hand entered the W2 information and tried again, same issue. "

Did you actually delete all W-2s and re-enter your W-2 by hand? This certainly sounds like a problem with the auto-import. 

I can't think of a good reason why the code DD dollar amount would trigger anything to print, much less Schedule 1. After all, nearly every W-2 has a code DD and a dollar amount so a problem here would have shown up on the first day.

So let's just confirm that you deleted all W-2s and re-entered them by hand., that you don't have a 1099-R with this dollar amount and that this dollar amount does not appear anywhere else on the return.

[BillM223]

And another question...did you have an entry in box 10 or in Box 11 on your W-2?

[golloglybg]

one other question, after typing in the W2 with DD box 12 there is a question from turbotax "did you take money out of your nonqualified pension plan?".  I have been answering Yes but perhaps I should be saying No?.

thoughts?

[golloglybg]

Also, I do not have a 1099-R with the same dollar amount although I do have 2 1099-Rs (married filing joint) but none of the dollar amounts are the same as my W2. 

[golloglybg]

 I do have values in Box 1 and 11 which are the same, but a different value in box 12 and tax withholding in box 2.

[DMarkM1]

This really sounds like the Box 11 entry is the issue not Box 12.  The amount put in box 11 is taxable income and entries there trigger the follow on question you mentioned "Did you take money out of a nonqualified pension plan?".   If you answer "yes" that will create a Schedule 1 line 8t entry.  

The amount put on schedule 1 line 8t in TurboTax is removed from the box 1 amount on your tax return which may cause an e-filing error.  According to the W2 form instructions entries in box 11 are to be included in Box 1 and will be taxable.  

Box 11 is informational for the taxpayer, it used by the Social Security Administration to verify that they have properly applied the social security earnings test and paid the correct amount of benefits.  The SSA already has their copy of your W2 for their purposes.  

You can leave the box 11 entry out of TurboTax or answer "No" to the follow on question so that the box 1 amount stays the same.  

[golloglybg]

That helps. On my other W2 I have no values in box 12 but in box 13 Retirement Plan is marked.  This is for deferred income that pays out over the course of 10 years now that I am retired.  Do I also say "no" to the follow-on question so amounts match?  I hesitate refiling yet again until both my W2 are accepted properly.

[DianeW777]

You do not need an entry in box 12 when box 13 is checked for 'Retirement Plan'. You don’t need to do anything. If your employer didn’t put anything in box 12, there’s nothing you need to report or enter. You can just skip it and move on.

If there is an entry in box 12, you need to select the code printed, then enter the amount.  Answer any follow-up questions correctly and TurboTax will do the rest. 

[golloglybg]

Hoping you could advise me on my second W2 which doesn't have a box 12 filled in but does have "Retirement" checked in box 13.  I need to determine how to answer the follow-up question. This is deferred compensation that pays out to me annually for 10 years. Do i answer taken out of nonqualified plan or put in? Logically I want to say taken out but given the other W2 complexity I am questioning my logic. Thank you for a response. This W2 has the same amount in Box 1 and Box 11 and fed, state, soc sec and medicare deductions taken out. No amoutn in box 12. 

[golloglybg]

Thanks but my question was not about how to type in the W2 information but instead is about the follow-on question and how to answer it. I had difficulty with another W2 entry which drove errors on filing and the other expert DDMark did a great job helping me through the correction. I wanted to check with him (and others) about how to accurately answer the follow-on question about nonqualified paid in or taken out. 

[BillM223]

Let's try to address your original question: "This year it seems Turbotax is incorrectly processing W2 with Box 12 DD value, treating the wages as taxable income (1040 - line 😎 and producing a Schedule 1 (line 8t) showing it as taxable income. "

You said, "I do have values in Box 1 and 11 which are the same, but a different value in box 12" - I don't understand...you had said that the box 12 code DD amount is what appeared on Schedule 1 line 8t, but now it appears that it's the box 11 amount (as would be correct). 

Do you still think that the box 12 code DD amount is causing an error?

[golloglybg]

Thanks for everyone's input but I am still getting an error when filing my tax return.  

This is the error: 

FW2-001-02 - The sum of all Form W-2s, 'WagesAmt' must not be greater than the sum of ['WagesSalariesAndTipsAmt' in the return and (sum of all Schedule C (Form 1040), 'TotalGrossReceiptsAmt' when 'StatutoryEmployeeFromW2Ind'

I only have 2 W2s and none of them have Statutory employee marked on the W2 (error message from IRS suggests otherwise).

One W2 is a DD (box12 - healthcare cost paid by employer and employee) form with values in Box 1 and 11 (same values = $40,000 ex.) and a lower value in box 12a (say 30,000). 

Another W2 has nothing in box 12 but "Retirement plan" in box 13 and values in Box 1 and 11 (same values = $5000) with fed,state,soc sec and medicare deductions. 

At first I loaded the W2s via a photo but there were several mistakes and so I deleted the W2s and manually reentered the information.  

When I first filed the W2 DD I answered "yes" (Yes, I took this money out of my nonqualified or Section 457 plan) in the follow-on question for both W2s.

This resulted in $5000 on line 1 of 1040 and $40,000 on line 8 of 1040 (with corresponding Schedule 1, line 8t showing $40,000).   I efiled and got the same rejection from IRS. 

I then "fixed" the W2 DD $40,000 income, answering No, this is money I contributed to my nonqualified Section 457 plan. I left the W2 $5000 income the same, answering Yes to follow-on. I efiled and now get the same rejection from the IRS.

When I called Turbotax a couple days ago they told me "this" is a known error and the IRS should be working on a fix with no ETA on resolution. It is unclear to me Turbotax knows what the issue is and its unclear how I can fix anything.  I have filed my tax return via Turbotax for the last 7 years and have had these same W2s for the past 3 years with no issues.  Any advice appreciated else I was told to wait and see and refile after a week.