At Work

Have you looked closely at your W-2?

When filing your income taxes this year did you take notice of Box 12, code DD on your W-2?

As you can see from this sample, it can be a hefty amount. Many workers will find it much higher, sometimes near or more than $20,000. And, what appears on that line has nothing to do with your earnings. You may find $15,000 in that box if you earn $30,000 per year or $300,000.

Box 12 Code DD is the value of the employer health benefits. It’s not taxable income, but because it is tax free, it represents the largest single revenue loss to the federal government. Sometimes this represents insurance premiums, more often it’s the equivalent value of self- insured benefits and arguably the most valuable part of your compensation.

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2 replies »

  1. No, 12DD is not the employer’s contribution, but it represents a somewhat jerrymandered definition of the cost of some of your medical coverage, no matter who paid, nor whether your coverage underwent change mid year.

    It is a stupid number, particularly because there is little, if anything that knowing this number enables an individual to take any action.

    Just like M4All, those without claims may ask for a refund, or ask their employer to forego coverage and pay this in wages.

    Most important, it isn’t likely to be the number all will use in determining the Cadillac tax, should it ever take effect.

    Misleading stuff

    Like

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