Form W-2 includes some vital information regarding retirement plans. More specifically, employee 401(k) deferrals are included in box 12a. A checkbox is also checked when the company sponsors a retirement plan.
But other questions arise. Specifically, one question we often get is: Are after-tax contributions reported on my W-2?
In this post, I will look at what the IRS says and give you a couple of links to resources. That way, you can make sure your contributions are correctly recorded. Let’s dive in.
After-Tax Contributions Required to be Reported on W2
The answer to the first part of the question is “maybe” but probably not. The client should discuss this matter with their CPA for a complete answer.
According to the IRS Form W-2, Wage, and Tax Statement instructions, an employer may choose to report non-Roth after-tax contributions in Box 14, but they are not obligated to do so.
When you review Form W-2, you’ll notice that Box 14 acts as a “catch-all” for various types of plan contributions. This includes after-tax contributions, certain fringe benefits, and specified employer and employee contributions.
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An employer may use this box to provide additional information to an employee. This can include state disability insurance taxes withheld, union dues, uniform payments, health insurance premiums deducted, nontaxable income, educational assistance payments, or a minister’s parsonage allowance and utility payments. Each item listed in Box 14 should be clearly labeled.
Take a look at what the IRS says about after-tax contributions on a W2. They have an example and clearly state that it is optional. Take a look below:
Since Form W-2 may not reliably track after-tax contributions, employees must maintain their own records and compare them with the information provided by the plan’s administrator. If issues arise, participants should promptly inform the company and the administrator and work to resolve any discrepancies.
Final thoughts
According to the instructions for Form W-2, employers can report non-Roth, after-tax contributions in Box 14, but they are not required to do so. As a result, Form W-2 may not be a dependable source for tracking after-tax contributions. Therefore, it is essential for employees to carefully monitor their plan contributions and maintain separate records to ensure accuracy.
