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March 2, 2022
Question

My w-2 has Code z in box 12. What do I do to complete my taxes if this calculation is not supported by TurboTax?

  • March 2, 2022
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    1 reply

    March 2, 2022

    The code Z means that you had a distribution from a non-qualified pension plan. That normally means the pension plan was not set up properly to allow for deferred taxation on contributions for some reason. In that case, plan participants can be subject to a 20% penalty on the amount reported on your W-2 form as a distribution.

     

    You can enter the W-2 in TurboTax and the program will calculate your income tax on the income, but not the penalty. So, you may need to consult with a tax professional to determine if you are subject to the penalty and to determine where and how to report it on your tax return. 

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