Turbotax handling of W2 with Box 12 DD value

Forum|Forum|3 years ago
January 31, 2023
4 replies
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This year it seems Turbotax is incorrectly processing W2 with Box 12 DD value, treating the wages as taxable income (1040 - line 😎 and producing a Schedule 1 (line 8t) showing it as taxable income. As compared to last year this was not the case. It is also producing an error after efiling return to IRS. Anyone else experiencing this? I had imported W2 via photo which had interpretation issues in Turbotax so I hand entered the W2 information and tried again, same issue.

mglauner

A Code DD in Box 12 of your W-2 is the amount your Employer paid for your Health Insurance. It is informational only and does not affect your personal return.

Any pre-tax insurance premiums you paid should already have been subtracted from your Wages in Box 1.

An amount on Schedule 1, Line 8t refers to a 'pension or annuity from a non-qualified deferred compensation plan' which would come from an entry in Box 11 on your W-2 and would be taxable income.

If this does not apply to you, you could delete and re-enter your W-2.

golloglybgAuthor

Thank you Marilyn. I understood your reply but my point is this year (and not the prior 2 years) my W2 with DD box 12 is showing up as taxable income with Turbotax creating a Schedule 1 and showing the wages from this W2 on my 1040. I had not noticed this until my Federal return was rejected due to inconsistencies in the wages. Is anyone else experiencing this issue in Turbotax filings this year? Also, I read the W2 DD is informational only and perhaps its best I not include in Turbotax so I can file my return - anyone have an opinion?

Contacting Turbotax has not helped as one agent said its an IRS problem and another just said to "wait and see" if the problem gets fixed. Neither had any tax expertise.

BillM223

And another question...did you have an entry in box 10 or in Box 11 on your W-2?

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BillM223

"had imported W2 via photo which had interpretation issues in Turbotax so I hand entered the W2 information and tried again, same issue. "

Did you actually delete all W-2s and re-enter your W-2 by hand? This certainly sounds like a problem with the auto-import.

I can't think of a good reason why the code DD dollar amount would trigger anything to print, much less Schedule 1. After all, nearly every W-2 has a code DD and a dollar amount so a problem here would have shown up on the first day.

So let's just confirm that you deleted all W-2s and re-entered them by hand., that you don't have a 1099-R with this dollar amount and that this dollar amount does not appear anywhere else on the return.

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golloglybgAuthor

Also, I do not have a 1099-R with the same dollar amount although I do have 2 1099-Rs (married filing joint) but none of the dollar amounts are the same as my W2.

fizzywater47

I also noticed a change in the reporting of my W2 income. I am a retiree and also have DD in box 12a. My pension and deferred income have been reported on a W2 and appear on Line 1 of my 1040 SR for the past 10 years. This year my 1040 SR shows ZERO as W2 income on Line 1 despite my entering the info as W2 in Turbotax. Instead the amounts appear as Other Income on Line 8. Im not sure it affects the tax liability but a change on key lines could flag questions.

AliciaP1

The change in how the deferred income is reported is an IRS change for tax year 2022, not a software change so you will not raise any flags.

Per the IRS' 2022 Form 1040 & Form 1040SR instructions:

Line 1h

Other Earned Income

The following types of income must be included in the total on line 1h.

Strike or lockout benefits (other than bona fide gifts).

Excess elective deferrals. The amount deferred should be shown in box 12 of your Form W-2, and the “Retirement plan” box in box 13 should be checked. If the total amount you (or your spouse if filing jointly) deferred for 2022 under all plans was more than $20,500 (excluding catch-up contributions as explained later), include the excess on line 1h. This limit is (a) $14,000 if you have only SIMPLE plans, or (b) $23,500 for section 403(b) plans if you qualify for the 15-year rule in Pub. 571. Although designated Roth contributions are subject to this limit, don’t include the excess attributable to such contributions on line 1h. They are already included as income in box 1 of your Form W-2.

@fizzywater47

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mihai74

Yes, I have the same issue. However, just entered the W2 in Turbotax and at this point I am not sure how that box will affect the taxes overall as I am still far from finishing the taxes. However, I observed that the hardcopy W2 does not have box 12 dd on it so no amount for that box, while the imported W2 shows an amount in box 12 dd, so that is a discrepancy that needs to be addressed either by Turbotax or on the W2 itself. I am hoping that by the time I submit my taxes this will be addressed, otherwise I will need to figure it out. For the money I am paying turbotax, I expect them to explain and address this discrepancy.

KrisD15

Box 12 code DD is reporting the cost of employer health insurance.

This amount has no bearing on your tax return and is informational only.

If you want to know why your employer added it to your digital copy and not your paper copy, you'll have to ask your employer. TurboTax only imports what is provided by your employer's payroll service.

TurboTax cannot manipulate your tax documents.

More about Box 12 code DD.

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