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Ask Barbara Your Own Question
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2967
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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Customer Question

I have a client that moved from Massachussetts and always had received a refund. But in preparing a Part Year MA resident return it shows she owes and it does not make sense.

On her MA W-2, in box 14 are the following codes and amounts:
O $ 229.79
Y $ 2,356.97
Z $ 656.39

I need to know that these for. She is being penalized for underpaying into the MA health care system (MA version of ObamaCare that Romney put in place).

The IRS instructions for preparing W-2's was no help in identifying those 3 codes.

Thanks, Glenn
Submitted: 3 years ago.
Category: Tax
Expert:  Barbara replied 3 years ago.

bkb1956 :

Thank you for allowing me to be of service to you regarding your tax question. Generally, Box 14 is utilized to provide additional information to employees. The only way to find out what the codes mean is to contact the employer and ask for an explanation. Please see the following for some additional information. I hope this information is helpful to you.

Customer :

What did you do to determine that this Massachussetts employer is required to withhold the MA state ObamaCare tax (which we know exists) to be included on the return? Makes sense to me that Box 14 would be exactly where that would be reported. I could read your answer as a "I didn't contact anyone that knows something about a Massachussetts W-2 answer". If it were an income tax it would show up under the other income taxes, but you and I know it is not an income tax, yet every MA employee has to pay into that system. What did you do to find out my question?

bkb1956 :

I will contact the Massachusetts Department of Revenue to determine exactly what these codes mean and advise you of my findings. Thank you.

bkb1956 :

As promised, I contacted the Massachusetts Department of Revenue. The representative gave me the following information: Code O in Box 14 is for HSA (Health Savings Account)/HCFAC pre-tax; Code Y in Box 14 is retirement pre-tax (federal); and Box Z in Box 14 is health and life insurance pre-tax. I hope this information is useful to you. Thank you.

Customer :

Since I explained that I was trying to pick up the Mass. ObamaCare premiums paid, would Code O or Z be such payments? Remember, a Mass. employee does not have a choice to pay in or not. I believe it is Z but you indicated life insurance is in that number as well, so that concerns me. The O being HSA does not make sense to be that cost, but why Z if one also has O? Disappointed that you made contact with them and still did not get a definitive answer.

Customer :


bkb1956 :

As a result of my telephone conference with the Massachusetts Department of Revenue representative, it appears that your client contributes to a health savings account (code O), a retirement plan (code Y) and either health and/or life insurance (code Z). Please note that all of these items are pre-tax.

bkb1956 :

In addition, your client would be considered a part-year resident and non-resident. Schedule R/NR (Resident/Non-Resident) Worksheet must be filled out and attached to the tax return. I hope this information is helpful.

Customer :

You still did not answer my question about how much or how to identify what my client paid in for the Massachussetts health care system which must be entered into the return, or how to find that amount if not from the W-2. Thanks anyway. I would have been better off calling them myself. Hope you never to do a return like this one because you are missing the point.

Customer: replied 3 years ago.

Expert needs to learn the Massachusetts tax filing requirements. I found them out on my own and he was way off base. I provided him with enough information and he failed on multiple attempts to find the answer. If he were a 2nd year Big 4 tax accountant he would have been criticized by even the first level reviewer for not doing better research and/or not asking the right questions of MA DOR.

Expert:  Barbara replied 3 years ago.
I apologize if you believe I did not answer your question correctly, but your original question was to identify the codes in Box 14 of your client's W-2 which I did after speaking with a Massachusetts Department of Revenue representative. I also informed you (based on the information you gave in your question) of the need to file both the part-year and non-resident form, rather than simply the part-year form.

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