Relocation assistance given on W2 for informational purpose in box 12b with code P

[t482]

Dear community,

I have received my W2 for 2025. I have received relocation assistance for my move, which is included in my total taxable income (box 1,3,5,16). In addition, the actual relocation amount is entered for informational purposes according to my employer in box12b with code P ("Excludable reimbursed moving expenses paid directly to members of the Armed Forces“). I'm not a member of the armed forces, my relocation was work related.

When I read-in my W2 into TurboTax, the amount given in box 12 b is added another time to my taxable income, which already includes this amount, resulting in higher taxes.

As written above, my employer says that the box 12b entry is for informational purposes only and that I will need to exclude it from my Turbo Tax filing to prevent any confusion; and that this does not increase or decrease my tax liability, but the coding could cause confusion in some tax software or if reviewed later.

I'm not sure how to handle this within TurboTax. To me it sounds like just leaving the entry for 12b in TurboTax empty, but on the other hand it is in my W2.

Could anyone please advise?

Thank you.

Kind wishes

[DianeW777]

The relocation assistance is taxable and as you indicated and should be in Boxes 1, 3, 5, and 16 (assumes your state follows federal law). It should not be included in Box 12.  For this reason your employer should issue a corrected W-2, however if the employer is not willing to do that you would file your tax return without an entry in Box 12.  Be prepared with your pay stubs, relocation documents to maintain with your tax return.

Confirm you did have the correct amount of social security tax and medicare tax withheld from your pay by using the formulas below.

• Double check the Box 3 amount x .062 equals the amount in Box 4 - social security tax on your wages
• Double check the Box 5 amount x .0145 equals the amount in Box 6 - medicare tax on your wages

If these figures are correct, then you have paid the required amount.

Please update here if you have more questions or need further assistance and we will help.

[t482]

Dear DianeW777,

thank you very much for your help. I checked the calculations and everything is calculated correctly on the W2, nevertheless I don't think I am going to get a corrected W2, so I will file as you have described in your message. Do I have to send the documentation (pay stubs, relocation documents) directly when filing the taxes, or just have them ready in case they are requested?

My relocation actually started in 2024, but only a small portion of the relocations costs happened back then with the majority of the costs having happened in 2025. But I checked my 2024 W2 and it is has the same situation as the 2025 one, but the amount in Box12 given with Code P is much smaller, so I must have overlooked that it was added for a second time to my taxable income in 2024 when doing my taxes with TurboTax.

What should I do about the 2024 situation?

Thank you so much for your help.

Kind wishes

[DaveF1006]

No. You do not need to send in pay stubs or relocation documents directly when filing ‌taxes. You just need to have them ready in case they are requested in case of an IRS "inquiry".

As far as your Box 12B entry, completely omit this entry on your W2. Even though it's informational, TurboTax assumes that you are in the military and attempting to make a deduction.  If you don't show  military status on your tax return, the software will treat that amount like it's never been reported as income. This means it'll add it to your income again. 

Omitting this will prevent that from happening since the amount is already reported in Box 1 of your W2. 

@t482 

[t482]

Thank you very much, DaveF1006.

I have just one more question. My 2024 tax return is of course already processed last year, but has the similar problem, which I didn't recognise when I did the taxes last year, which means that my 2024 taxable income was also increased by including the first part of the relocation assistance twice. What can and should I do for the 2024 tax return?

Thank you!

[DaveF1006]

You should amend your 2024 and perform the same procedure as you did for 2025.

[t482]

Thank you!