You might be confused to see “Cafe 125” listed on your W-2 form. This may sound like it has something to do with where you go on your lunch break, but there is a more reasonable explanation. “Cafe 125” stands for IRS regulation code section 125 regarding tax-free cafeteria plans.

What is other cafe on a W-2?

It is also known as a “cafeteria plan”. Usually, what is reported there is your medical insurance premiums that are paid with pre-tax income. They are not taxed and are not included in your W-2 Box 1 wages so you can not deduct them as medical expenses.

Where is Section 125 reported on w2?

The total dependent care benefits the employer paid to the employee or incurred on the employee’s behalf (including amounts from a section 125 plan) should be reported in Box 10 of Form W-2.

Are Section 125 deductions reported on w2?

Under a cafeteria, or Section 125, plan, you pay for your employer-sponsored benefits with pretax money. Your employer doesn’t include your pretax payments in your taxable wages on your annual W-2. It may, however, choose to report certain benefits on your W-2 and code them as Café 125.

What is S 125 on w2?

Box 14 s125 is for the amount of premiums that you paid tax free under an employer’s Section 125 (or Cafeteria) benefits plan. It does not reduce your refund. 2.

Why is Cafe 125 listed on my W-2?

Without knowing exactly what the employee benefits are and what the taxpayer’s situation is, the “Cafe 125” on the W-2 might need to be treated in several different ways on the tax return, or it might simply be there for information (if in box 14) and should be ignored for tax return purposes.

What does Cafe 125 stand for on a tax form?

Here, your employer may indicate your enrollment in these unique tax plans. Cafeteria plans are also known as Section 125 plans, referencing that section of the IRS code, hence the name Café 125. Section 125 plans are available to all employees, as well as their spouses and dependents.

Is the Cafe 125 retirement plan tax deductible?

Employees make the choice to receive these benefits in lieu of pay. Because you weren’t taxed on these benefits in the first place, they are not tax-deductible on your income tax form. Cafe 125 benefits include: qualified 401(k) retirement plans.

Where is the cafeteria plan on a W-2?

If you are looking for an indicator on your W-2 that you are utilizing a cafeteria plan, you may have to look in Box 14, which is commonly labelled “Other”. Here, your employer may indicate your enrollment in these unique tax plans.