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Box 14 may not add up as you are implying, because it is a miscellaneous and optional reporting block. For example, union dues, employer-paid tuition assistance, health insurance premiums you paid, or after-tax contributions to a retirement plan will be reported here. Some employers report certain state and local taxes in Box 14, such as State Disability Insurance (SDI) premiums.
The codes for the box include: the 125-M medical spending account or other cafeteria plan benefit.
I am not sure whether to report the amount indicated as an add-back to New York State and local income.
I see, so you want to know if New York State taxes this amount or not?
No, you do not have to add the section 125 benefits back in.
Section 125 distributions are an excluded distribution.