IRC 132

[hegomez1961]

The amount I have for IRC132 was not excluded from my income for NY. How can I enter it in TurboTax. What was excluded is my IRC414H.

[LindaS5247]

The amount listed on your W-2 as IRC 132, is not subject to taxes in New York.  This amount is for any Commuter Benefits you may have received.  

Box 14 on your W-2 form reporting IRC 132 fringe benefits are typically not included in your gross income as reported in box 1 on your W-2 form or in box 16 for your state wages.

Because they are not included in Box 1 as taxable wages, you don't need to deduct that amount from your New York income because it wasn't included in income on your tax return.

Click here for additional information on commuter benefits.

Click here for NYC Commuter Benefits FAQ.

Please feel free to come back to TurboTax Community with additional information or questions or click here for information on Turbo Tax Support. 

[TaxLady1975]

IRC 132 has not been deducted from box 1 on my NYS tax return and it is not indicated in the drop down menu. Also 132 contributions are not subject to federal income tax, ss tax, medicate etc. How can I ensure the correct deductions are taken?

[KeshaH]

Line 1 of your NYS tax return should come from the wages and salaries you reported on your federal tax return. This information comes from box 1 of your W-2. Box 1 of your W-2 will already have excluded section 132 benefits from income, so you won't need to subtract it again.

To make sure that these benefits weren't included in box 1 of your W-2, you can review your paystubs or contact your payroll department for verification.

[disgruntled2]

Hi, KeshaH. You have not addressed the issue, which is that IRC 132 is not available in the category droplist for Box 14. IRC 132 includes commuter benefits, which are pretax benefits. Until Intuit addresses this oversight, I guess we can only select IRC 125/SEC 18 NY tax exempt.

[KeshaH]

IRC132 benefits are not included in the dropdown for box 14 because they are treated the same for federal and NY tax purposes. 

As you mentioned, these benefits are pre-tax benefits under both federal and NY tax law. There's no need to make an adjustment on the state return for that amount because it should already not be included in taxable wages in box 1 of the W-2. The state-specific options in the box 14 dropdown are generally related to items that are treated differently between the IRS and state tax laws. You should be able to use the "Other" option from the dropdown for this item.

@disgruntled2 

[pastc699]

But what does that mean for me?  Turbo Tax added it to the application but there is not category to indicate commuter benefits or that it's exempt.  Does that mean I should delete the line? 

[TaxLady1975]

Even though IRC132 is typically accounted for in box one, I would like to advocate for Intuit to include the specific category explicitly listed as IRC132 "transportation benefit" for clarity, continuity, consistency, transparency and peace of mind for the user. For multiple years I have wasted time attempting to get clarification on the question and when doing taxes, it feels "unfinished" and unstable for the user. Intuit has plenty of fields for other tax categories where if you click on them, one's tax bill or refund is not modified, but the user goes through the motions to rule things out and comprehend the process. The same should apply to IRC. The repeated IRC issue has made me consider using different software. It's a simple fix for Intuit and it would come as great relief to users. In addition to adding this specifically, you could have a thought bubble or similar explicitly state that the accounting for this element is already tabulated in box 1.

[DaveF1006]

Since there is no specific "IRC 132" or "Commuter Benefit" category in the Box 14 dropdown, you have two main options:

1. Option A (The "Safe" Route): Select "Other (not classified)" or "Other - not on list above" from the dropdown. This allows the information from your W-2 to be recorded in the system without triggering a state tax adjustment that shouldn't be there.
2. Option B (The "Clean" Route): Technically, you can leave it out if the amount is purely informational. However, for the sake of "peace of mind" (as TaxLady1975 mentions), entering it as "Other" is usually the preferred way to ensure your digital return matches your physical paper trail.

2. Why isn't there a specific category?

The core of the issue is a difference between reporting and taxability:

1. Box 14 is a "Catch-All": Employers use Box 14 to provide information that doesn't fit elsewhere. There are very few federal requirements for what goes here; it’s often just for your own records.
2. Already Subtracted: Because IRC 132 (commuter benefits) is pre-tax for both Federal and New York State, your employer has already subtracted that money from the total shown in Box 1 (Federal Wages) and Box 16 (State Wages).
3. No Adjustment Needed: Tax software uses the Box 14 dropdown to look for items that require a "math correction" (like a benefit that is tax-exempt for the Feds but taxable for the State). Since IRC 132 is exempt for both, no math correction is needed, so the software doesn't "care" about the specific label.

3. The "Peace of Mind" Problem

@TaxLady1975 has a valid point. Just because the math works doesn't mean the user feels confident. When you see a code like "IRC 132" on your W-2 and don't see a matching button in your software, it feels like a mistake is waiting to happen. While Intuit (and other providers) view Box 14 as a list of "Exceptions to the Rule," users view it as a "Verify My Data" step.

You aren't missing out on a deduction by selecting "Other." The deduction already happened before your W-2 was even printed. Choosing "Other" just lets the software know what's in that box, and it won’t change your taxable income. Keep in mind, anything recorded in Box 14 is informational and does not affect your tax return.