Does anyone know what Sch A Part 2 code I should be using on my NY IT-225 form for an IRC125 deduction on my W-2?

If it is NYS taxable, the code is 101. If you file with Turbo Tax, this should automatically populate. Check your W2 entry to see if you chose New York IRC 125/SEC 18 subject to NY tax. 

Also check your hard copy W2 to see if it matches with your entry into the return. If the hard copy mentions that it's tax exempt, then it doesn't need to be reported on It-225.