Wrong code and amount on W-2 for Simple IRA?

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Topic Author
stingray777
Posts: 68
Joined: Sun Dec 08, 2019 2:57 pm

Wrong code and amount on W-2 for Simple IRA?

Post by stingray777 » Thu Feb 13, 2020 1:02 pm

I got a W-2 from the employer, and I talked to the HR, but I still am not 100% convinced. So please help me out.
This is what I have on W-2:

12a code: E 7182
12b code: S 9463
Retirement plan: X

I was told by HR that code E was OK for Simple IRA, even though it is usually for 403(b) plan. I could not confirm it myself, but if that is how it works, fine with me. 2019 was my first year to put money into retirement plan, so I am new to this. We are a small business, not non-profit company.

My big concern is the amount on 12b. HR said the contribution amount from the employer was the difference between the two: $9463 - $7182 = $2281. However, when I was doing the tax return with HR block software, it told me that I have contributed more than the standard amount of $13000, so the excess would be counted as my income. This is not correct.

I really think It should only say code S - 7182
Could please someone confirm it before I go back to HR?

Spirit Rider
Posts: 12519
Joined: Fri Mar 02, 2007 2:39 pm

Re: Wrong code and amount on W-2 for Simple IRA?

Post by Spirit Rider » Thu Feb 13, 2020 1:20 pm

HR is wrong, what else is new.

SIMPLE IRA employee deferrals are only reported as Box 12 Code S.

Employer contributions for a SIMPLE IRA plan are not reported on a W-2 anywhere.

niceguy7376
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Location: Metro ATL

Re: Wrong code and amount on W-2 for Simple IRA?

Post by niceguy7376 » Thu Feb 13, 2020 1:41 pm

stingray777 wrote:
Thu Feb 13, 2020 1:02 pm
I got a W-2 from the employer, and I talked to the HR, but I still am not 100% convinced. So please help me out.
Do they do their own payroll internally?

Topic Author
stingray777
Posts: 68
Joined: Sun Dec 08, 2019 2:57 pm

Re: Wrong code and amount on W-2 for Simple IRA?

Post by stingray777 » Thu Feb 13, 2020 2:47 pm

niceguy7376 wrote:
Thu Feb 13, 2020 1:41 pm
stingray777 wrote:
Thu Feb 13, 2020 1:02 pm
I got a W-2 from the employer, and I talked to the HR, but I still am not 100% convinced. So please help me out.
Do they do their own payroll internally?
It is outsourced.

Topic Author
stingray777
Posts: 68
Joined: Sun Dec 08, 2019 2:57 pm

Re: Wrong code and amount on W-2 for Simple IRA?

Post by stingray777 » Thu Feb 13, 2020 2:59 pm

Spirit Rider wrote:
Thu Feb 13, 2020 1:20 pm
HR is wrong, what else is new.

SIMPLE IRA employee deferrals are only reported as Box 12 Code S.

Employer contributions for a SIMPLE IRA plan are not reported on a W-2 anywhere.
Thank you so much. How they put in my W-2 did not make sense to me even without knowing what each code means.
I will go back to HR.

Katietsu
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Joined: Sun Sep 22, 2013 1:48 am

Re: Wrong code and amount on W-2 for Simple IRA?

Post by Katietsu » Thu Feb 13, 2020 3:13 pm

So the reality is that $7182 was contributed from your earnings and $2281 was an employer contribution? Have you confirmed this with your own records? It is probably accurate but given the other oddities, I would verify this before talking to HR again.

Topic Author
stingray777
Posts: 68
Joined: Sun Dec 08, 2019 2:57 pm

Re: Wrong code and amount on W-2 for Simple IRA?

Post by stingray777 » Fri Feb 21, 2020 5:04 pm

I received a corrected W-2. The numbers are drastically changed on Box 12.
Now it has code S with $500. This is not the amount I contributed, but I was told that this is a 1% bonus amount from the employer. Under Simple IRA, 3% is the maximum contribution, so anything above shows up here. My employer gave us 4% matching.

So technically my contribution amount does not show anywhere in my W-2. It can be calculated from Box1 (Income less health insurance and my retirement contribution). It makes sense in a way, but is this how it should read?

I am still in doubt because H&R Block tax software had told me that my contribution amount was over the standard limit for Simple IRA (before the W-2 correction) and it gave me an impression that this box should have MY contribution.

Do I still need to go back to the preparer?

Topic Author
stingray777
Posts: 68
Joined: Sun Dec 08, 2019 2:57 pm

Re: Wrong code and amount on W-2 for Simple IRA?

Post by stingray777 » Fri Feb 21, 2020 5:08 pm

Katietsu wrote:
Thu Feb 13, 2020 3:13 pm
So the reality is that $7182 was contributed from your earnings and $2281 was an employer contribution? Have you confirmed this with your own records? It is probably accurate but given the other oddities, I would verify this before talking to HR again.
I did not really confirm it, but it is close enough. Thanks for your insight.

Spirit Rider
Posts: 12519
Joined: Fri Mar 02, 2007 2:39 pm

Re: Wrong code and amount on W-2 for Simple IRA?

Post by Spirit Rider » Fri Feb 21, 2020 7:33 pm

stingray777 wrote:
Fri Feb 21, 2020 5:04 pm
I received a corrected W-2. The numbers are drastically changed on Box 12.
Now it has code S with $500. This is not the amount I contributed, but I was told that this is a 1% bonus amount from the employer. Under Simple IRA, 3% is the maximum contribution, so anything above shows up here. My employer gave us 4% matching.

So technically my contribution amount does not show anywhere in my W-2. It can be calculated from Box1 (Income less health insurance and my retirement contribution). It makes sense in a way, but is this how it should read?

I am still in doubt because H&R Block tax software had told me that my contribution amount was over the standard limit for Simple IRA (before the W-2 correction) and it gave me an impression that this box should have MY contribution.

Do I still need to go back to the preparer?
As impossible as it seems the employer is even more incompetent and clueless with this latest W-2. It is prohibited for a SIMPLE IRA employer contribution to be greater that 3%. If they did in fact contribute 4%, they have a serious SIMPLE IRA plan compliance error.

None of this changes the fact that SIMPLE IRA employee deferrals are reported on W-2 Box 12 Code S and employer contributions are never reported anywhere on a W-2.

Are they really that incompetent that they can't read instructions included in every Form W-2.

S--Employee salary reduction contributions under a section 408(p) SIMPLE (not included in box 1)

Topic Author
stingray777
Posts: 68
Joined: Sun Dec 08, 2019 2:57 pm

Re: Wrong code and amount on W-2 for Simple IRA?

Post by stingray777 » Fri Feb 21, 2020 10:13 pm

Spirit Rider wrote:
Fri Feb 21, 2020 7:33 pm
stingray777 wrote:
Fri Feb 21, 2020 5:04 pm
I received a corrected W-2. The numbers are drastically changed on Box 12.
Now it has code S with $500. This is not the amount I contributed, but I was told that this is a 1% bonus amount from the employer. Under Simple IRA, 3% is the maximum contribution, so anything above shows up here. My employer gave us 4% matching.

So technically my contribution amount does not show anywhere in my W-2. It can be calculated from Box1 (Income less health insurance and my retirement contribution). It makes sense in a way, but is this how it should read?

I am still in doubt because H&R Block tax software had told me that my contribution amount was over the standard limit for Simple IRA (before the W-2 correction) and it gave me an impression that this box should have MY contribution.

Do I still need to go back to the preparer?
As impossible as it seems the employer is even more incompetent and clueless with this latest W-2. It is prohibited for a SIMPLE IRA employer contribution to be greater that 3%. If they did in fact contribute 4%, they have a serious SIMPLE IRA plan compliance error.

None of this changes the fact that SIMPLE IRA employee deferrals are reported on W-2 Box 12 Code S and employer contributions are never reported anywhere on a W-2.

Are they really that incompetent that they can't read instructions included in every Form W-2.

S--Employee salary reduction contributions under a section 408(p) SIMPLE (not included in box 1)
HR emailed my questions and references (as to why I thought the codes and amounts were incorrect) to the 3rd party preparer and I never got direct answers to my question from them. All I got was that HR stating W-2 was incorrect and we would receive correction. I have no idea what went on over the phone between our HR and them. I just know there was a phone call.

I do not need to put my employer in a difficult position, and take 1% from every employee. It's ridiculous that they might have to correct it again.

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