Box 14 W-2 form overview
What is form W-2?
Form W-2 is a statement used to report an employee’s wage and tax information. It’s an important part of payroll and employee document management. If an employee performs at least $600 worth of work for an employer or had income, Social Security and Medicare tax withheld from their pay, then their employer must file a Form W-2 for them. Each field has a specific purpose relating to employee wage information. Form W-2 is used by employers, employees, the IRS and state and local tax authorities to file and process income tax.
What is box 14?
Box 14 is used to report amounts that don’t belong in other boxes on Form W-2. Employers can use it to report additional tax or income information for filing or informational purposes. Some employers use box 14 to report amounts deducted for State Disability Insurance taxes or union dues that may be tax deductible.
As of 2020, box 14 can also be used to report the amount of qualified sick or family leave paid, according to the Families First Coronavirus Response Act.Usually, this information doesn’t affect an employee’s personal tax return unless they have self-employment income or claim qualified sick leave or family leave credits against self-employment income.
What else goes in box 14 on W-2s?
Employers can use box 14 on W-2 forms to report additional information, which can vary according to the state or local area. Examples of items that may be reported in box 14 include:
- The lease value of a vehicle provided to an employee
- A clergy member’s parsonage allowance and utilities
- Charitable contributions made through payroll deductions
- Employer-paid tuition assistance
- Retirement plan deductions
- Health insurance premium deductions
- Nontaxable income
- Uniform payments
- Nonelective employer contributions made on behalf of employees
- S-corporation health insurance premiums
- Pre-tax employer contributions to cafeteria or meal plans
- After-tax HSA contributions
- Employer matching contributions
- Required employee contributions
- Voluntary after-tax contributions except for designated Roth contributions
Examples specifically pertaining to railroad employees include:
- RRTA compensation
- Tier I tax
- Tier II tax
- Medicare tax
- Additional Medicare tax
W-2 form box 14 codes
Items entered in box 14 must be labelled with a code that provides a brief description of the item. There are no standardized codes for box-14 because the federal government doesn’t provide standardized codes for box 14 items, so employers can assign their own code that adequately describes the reported item. Be sure that your chosen codes are clear to avoid any confusion for employees.
Some locations have their own designated codes for specific state and local taxes. New York City, for example, uses the following codes:
- IRC414H for pension contributions: This denotes payroll deductions covered under IRS Code Section 414 for pension contributions.
- IRC132 for commuter benefits: This indicates payroll deductions covered under IRS Section 132 for commuter benefits.
- IMP for domestic partner benefits: This describes the taxable value of an employee’s domestic partner’s health plan coverage provided by the city and or/union welfare fund.
- IRC125 for pretax benefit programs: This code is for payroll deductions covered under the IRS Code Section 125 for flexible spending account programs.
