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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Is 125-m pre-taxed in box 14 on W2

Customer Question

On the w-2, the wages in box 1 are $71,432.63; box 12a, code (g) $6,398.72(pre-taxed), box 14 414-h 1608.72(pre-taxed)also in box 14 125-m $2,152.58, box 3 $79440.11 (social security wages. I was told the 125-m amount is pre-taxed. Since it along with the other pre-taxed figures does not add up to box 3, I am not sure it is pre-taxed. Please explain.
Submitted: 9 years ago.
Category: Tax
Expert:  Ed Johnson replied 9 years ago.

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.

Customer: replied 9 years ago.

I am not sure whether to report the amount indicated as an add-back to New York State and local income.

Expert:  Ed Johnson replied 9 years ago.

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.