WHEN I ADD LINE 12 FROM MY W-2 WITH CODE J AS NONTAXABLE SICK PAY, IT DOESNT CHANGE MY TAXES OWED AT ALL. SHOULDNT THIS REDUCE THE AMOUNT OF MONEY I SHOULD OWE?

[JohnW15 · Accepted solution]

No, this won't reduce the amount of money you owe, but it won't increase it, either.

The amount that's reflected by Code J in Line 12 of Form W-2 wasn't included in box 1 of your W-2, so when you input the W-2 into TurboTax, only the actual taxable income shown in box 1 was carried over to you return.  The J-coded amount has no effect.

An amount with the J code represents sick pay that was paid by a third party and was not includible in income (and not shown in boxes 1, 3, and 5 of the W-2) because the employee -- you -- contributed to the sick pay plan.

For more information, please see the IRS' 2018 General Instructions for Forms W-2 and W-3.