Code W Box 14

[ED SMITH]

This is on a W-2 for 2003. The client was military and served in Iraq. The "W" in Box 14 show $71K and his Box 1 $17K, SS & Med $74K. In prior years he got W-2 with Code Q, in Box 12, combat pay. There was no "Q" on the 2003.

Does anyone have an explanation for what Code W is?

[JohnH]

SSA Wages Credits for Military

It is "Deemed Military Service Wage Credits".
It is used to determine future SSA benefits.

Search for "Dfas W2" and you'll find a discussion about it from a few weeks back.

[ED SMITH]

thanks JohnH

That was a useful suggestion, so I followed up on it. It doesn't square as deemed wages on two counts. 1. 'Deemed Wages' ended in 2001; 2. The $71K greatly exceeds the $1200 maximum that would be granted as deemed wages.

From the Military Officers Assoc website MOAA.org:
"Service members who served in years 1957-2001 were granted deemed wage credits as follows:

For years 1957 through 1977, you are granted $300 for each calendar quarter that you receive any basic pay.
For years 1978 through 2001, you are granted credits in increments of $100 up to a maximum of $1,200 per calendar year. The $100 increments are granted for each full $300 of basic pay. No credit is granted if your annual wages are less than $300 and no further credit may be granted when the annual wages exceed $3,600.
<<<Effective 01/01/02, deemed wage credits are eliminated for all years after calendar year 2001.>>> Deemed wage credits will continue to be given for wages for periods prior to calendar year 2002.
Note item 2 again. This means the first $3600 of wages in a year earned the deemed wage credits. Once a person earned $3600 in wages, the maximum wage credit of $1200 for the year was reached ($100 in credits for each $300 in wages earned…$3600/$300 = 12 x $100 = $1200…the limit of deemed credits allowed for the year)."