DEFERRED 414H

[TAXMAN]

OK TP w-2 shows a difference in wages box1 to ss wages in box 3. The difference in these two are coded 414H in box 14. This is a county school w-2. I think not qualified for the 8880 form. Am I wrong?

[Don in Upstate NY]

You are correct.  The 414H (at least in NY) is a MANDATORY contribution to the state retirement plan.  Form 8880 gives a federal credit for VOLUNTARY contributions.

 

You didn't ask, but the 414H contribution is NOT taxed by the federal (you noticed the difference between boxes 1 and 3), but IS taxed by NYS. When the client retires, the reverse is true - the pension distributions will be taxed by the feds, but not by NYS.

[michaelmars]

_{most w-2's don't add it to the NY wages, you have to do the add back on the state form}

[TaxCPANY]

http://tax.custhelp.com/app/answers/detail/a_id/603/~/are-public-employee-414-(h)-contributions-taxable-by-new-york-state%3F provides a decent list of the types of 414(h) we're likely to encounter.