12 Feb Understanding codes on tax forms
Photo: pixabay.comQ. I am retired and don’t work. I received a 1099-R pension form and two W-2 forms. One lists wages and tips (less than $600) in Box 1 and shows deductions for Social Security and Medicare. State tax is listed in Box 17 and the letter C is noted in Box 12a. The other W-2 lists wages, etc. in box 1, worth about $100 more than the other W-2, but shows federal tax withheld. Box 12A DD has $16,619.04 listed. Can you explain the codes?
— Trying to understand
A. These tax forms can be confusing.
Payments by a former employer for certain benefits constitute wages.
That would appear in the wage box 1 and are subject to Social Security and Medicare tax, said David Ritter, chair of the tax practice at Brach Eichler in Roseland.
He said letter C in Box 12 refers to income taxable payments for group life insurance in excess of $50,000, and code DD in Box 12a refers to non-taxable costs for employer-provided health insurance.
“From the information provided in the question, I cannot be sure of what the W-2 statements reflect as to these type benefits,” Ritter said.
Sounds like you may want to speak to a tax preparer to further discuss your specific situation.
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This post was first published in February 2018.
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