What is the representation for contributions to a 409A non-qualified Deferred Compensation Plan in Box 12?

Contributions to a 409A non-qualified Deferred Compensation Plan are represented in Box 12 with the letter Y. This designation is used specifically to indicate deferrals of compensation that employees have chosen to contribute to a non-qualified deferred compensation plan.

Understanding Box 12 reporting is important for the accurate filing of forms such as the W-2. The letter Y ensures that the IRS is made aware of such contributions, which are often not subject to FICA taxes at the time of deferral but are considered taxable at the time of distribution. This reporting can affect both the employee’s and the employer's tax calculations, making precise designation essential for compliance with tax regulations.

In contrast, the other designations in Box 12 serve different purposes: for instance, M pertains to uncollected Social Security or RRTA tax on tips, D indicates elective deferrals to a 401(k) plan, and R is used for employer contributions to a Roth 401(k). Each letter corresponds to distinct types of compensation or benefits, underscoring the necessity of using the correct letter to convey accurate information about an employee's earnings and contributions.