S-125 -- Health Benefits?

[Black Bart]

This $500 is in W-2 box 14 and I'm thinking it's health benefits, but is it pre-tax or after-tax? Gross, SS, Med wages are all the same.

[JG EA]

Section 125 means cafeteria plan and can be a few different things. But it does mean Pre-tax.

[Burke]

Unless it specifically says "Sect 125" or "Pre-Tax" you cannot be sure. You have to have the client call his company or look at a pay stub (sometimes) to determine this, since Box 1, 3, and 5 will all be the same. Many companies just put the health ins info in that box for the employee's convenience. If it says "S-125", then it is pre-tax benefits. Hopefully, they just showed the health ins amount and not the life insurance, the child-care bene's, etc, as well.

[Nashville]

section 125

Cannot be totally sure from the W-2, but if there is a s.125 plan, it is to everyone's advantage to remove the withheld premiums from both federal taxation and social security taxation.

Section 125 refers to the approved medical plan by corporate employers, where the contributions of employees can be deducted from both federal taxable wages and social security/medicare wages.

Since the amount is thus subtracted from box 1, box 3, and box 5 of the W-2, there is no way you can trace a difference or tell how much medical has been deducted simply by looking at those three boxes. (401k contributions, for example, create a difference between box 1 and boxes3,5)

Sometimes an employer will indicate the amount of the employees' s.125 contributions by putting the amount in box 14, but there is apparently no requirement for them to do so.