How to enter New York State portion of IRC 125

[Gabbymck]

Hi there,

 I received a prompt  to enter New York State portion of IRC 125 on my NYS State tax return. Where does this monetary value come from I have been hearing conflicting information. In box 14 of my W-2 I do have two values present do I add these value together and enter them? 

Any help would be great!

[AmyC]

1. IRC 125 - cafeteria plan -you pay for some things pre-tax, maybe HSA or FSA among other options. In Sections 125 and 223 – Cafeteria Plans, Flexible Spending: Section 125(d)(1) defines a cafeteria plan as a written plan under which all participants are employees and the participants may choose among two or more benefits consisting of cash and qualified benefits. Section 125(f) defines a qualified benefit as any benefit which, with the application of section 125(a), is not includable in the gross income of the employee

2. You can add the values together. You probably have a couple of different sec 125 items, one value for each.  This income is taxable to NY and NYC so it must be included on your w2 screen in box 14 and select IRC125.

The amount in the IRC 125 Box is subject to New York State and City taxes. The NYS income tax instructions direct the income tax filer to report wages as they appear on the W-2 in Box 1 then to add back the amount to arrive at New York State/City taxable wages from Tax Frequently Asked Questions - OPA

[Gabbymck]

Thank you so much!!!

[tmullan]

Was this requested last year? Or is this a new "tax" by NY State and NYC in 2024?

[LenaH]

No, this is not a new tax. Although the TurboTax prompt looks different this year, the amount of your IRC125 has been used for calculation of your NYS return for many years. From what I can find, IRC 125 plans have been in existence since 1978. 

@tmullan 

[ecgrigorian]

I entered in the total amount under box 14 of my W2 and it is saying it is an error. Is there another box I should be adding to the total?

[DawnC]

Go to the New York return.   The first question after you answer the residency questions is - see below.   @ecgrigorian 

On that screen, you have to enter the amount from Box 14 or delete the zero if you do not have an amount in Box 14.

If you are getting an error on your W-2 - use the Other - not classified category for Box 14.  

[Kobby1]

First, thanks for being kind and answering these questions. I've got in box 14 amounts for NY PFL and NY SDI. Am I to add these figures up and use that as my answer to the prompt? thanks so much

[Hanson]

I have the same question as Kobby1 except my box 14 has:

NY SDI 

NY FLI

Do I add the two amounts?

[Michael181818]

So NY Family Paid Leave is considered part of this is IRC 125. Does it matter if this amount was taken out after tax?

[AmyC]

The PFL and SDI are other deductible state/ local taxes. They are after tax dollars and can be used if you itemize. If you do not itemize on your federal, they have no additional value.

You can add them together for one entry, if you want. If you don't itemize, you don't even have to add the box 14 information since it won't go on your tax return. This is just you getting information moved to the right place. The federal and state already have a copy. This is just for the program to get things right.

@Kobby1   @Hanson   @Michael181818 

[Hanson]

Okay, but I am still not clear on what to do. Please: What do I fill in for "New York State portion of IRC 125"? TurboTax does not allow me to proceed without entering a number for that question. 

Thanks

[AmyC]

Enter the amount of IRC 125 on your w2. The IRC 125 is your pre-tax cafeteria plan and can encompass quite a few items. Tax Frequently Asked Questions - OPA  states: The amount in the IRC 125 Box is subject to New York State and City taxes. The NYS income tax instructions direct the income tax filer to report wages as they appear on the W-2 in Box 1 then to add back the amount to arrive at New York State/City taxable wages.

The program asks you to identify which of the following is correct for your W2, select subject to NY tax.

• NY IRC 125/Sec 18 Subject to NY tax or
• NY IRC 125/Sec 18 tax exempt

@Hanson So sorry!

[Hanson]

Hi Amy,

thanks for your patience. The problem is that my W2 does not specifically show or even mention anything labeled as IRC 125. In other words, there is no IRC 125 BOX. In that case , which case would it be? I was told it is box 14. But box 14 shows two items:

NY SDI

NY FLI

Please help us with this confusion. Thank you again!

Hanson

[AmyC]

You may not have any cafeteria plan at work or may not use it, so there is no 125 on your form. Nothing extra to tax and nothing to enter.

Again, the SDI and FLI are not taxable and you only need to enter them if you are itemizing state and local taxes on your federal. You can add them together or list them separately. Scroll way down and select Other deductible state taxes.

@Hanson