W-2 Box 14 Descriptions: Pre-Tax, State Tax, and Fringe Codes

The codes in Box 14 of your W-2 are whatever labels your employer chose for amounts that don’t have a dedicated box elsewhere on the form, and the IRS lets employers write almost anything there as long as they label it. So “CASDI,” “SEC 125,” “IRC414H,” and “DUES” all live in the same box but do very different things on your return. Some entries are already handled inside your Box 1 wages, some belong on Schedule A if you itemize, and a small number represent taxable income that should have been added to your wages but sometimes isn’t. Figuring out which bucket your entry falls into is the whole exercise.

Why the Codes Look Different on Every W-2

Box 12 uses standardized letter codes the IRS defines. Box 14 doesn’t. The IRS instructions tell employers they “may also use this box for any other information that you want to give to your employee” and simply ask them to “label each item.”¹ One employer’s payroll system prints “SDI,” another’s prints “CASDI,” a third prints “CA DISAB.” Same withholding, different abbreviation. If a label on your W-2 doesn’t match anything below, your employer’s payroll department is the only authoritative source for what it means.

The Three Things Any Box 14 Entry Can Be

Before working through individual codes, it helps to know that every Box 14 amount does one of three things:

It’s already been excluded from your Box 1 wages and needs no further action on your federal return. Section 125 cafeteria plan contributions, qualified educational assistance under $5,250, Section 414(h) pension pickups, and commuter benefits within the monthly limit all fit here.
It’s a state or local tax you paid, deductible on Schedule A, Line 5a if you itemize. State disability insurance, paid family leave, employee-paid state unemployment, and local taxes fit here, all subject to the federal SALT cap.²
It’s taxable income above an exclusion threshold that should have been added to Box 1. Commuter benefits above the monthly limit, educational assistance above $5,250, and clergy housing above the excludable amount are the usual examples. Competent payroll adds the excess to Box 1 automatically, but if it wasn’t added, you have to include it yourself.³

Informational items like union dues and the personal-use value of a company car sit outside these three categories. They exist for your records and go nowhere on your federal return.

Pre-Tax Benefits Already in Box 1

Section 125 and FSA Codes

Labels like “SEC 125,” “CAF125,” and “FSA” refer to your employer’s Section 125 cafeteria plan. Those contributions pay for health premiums, flexible spending accounts, or dependent care assistance with pre-tax dollars, and the amount has already been subtracted from your Box 1 wages. On the federal return, there’s nothing to do. A handful of states tax Section 125 contributions even though the federal government doesn’t, so you may need the Box 14 figure to add the amount back on your state return.

Educational Assistance

An employer can exclude up to $5,250 per year in educational assistance from your income. Amounts at or below that ceiling may appear in Box 14 as “EDUC” or “EDU ASST” and are informational.⁴ If you received more than $5,250, the excess is taxable and should already sit inside Box 1, though the full assistance figure may still be broken out in Box 14 for reference. On $7,000 in assistance, for instance, $5,250 is excluded and the remaining $1,750 should already be in your wages.⁵

Section 414(h) Pension Contributions

Public-sector employees frequently see “IRC414H” or “414H” in Box 14. Under a Section 414(h) arrangement, the employer “picks up” contributions to a government retirement plan, and those contributions are excluded from federal gross income.⁶ They remain subject to Social Security and Medicare tax, which is why they show up in Box 14 rather than simply disappearing. The IRS specifically directs employers to report Section 414(h)(2) contributions in Box 14 rather than Box 12.¹ Some states tax these contributions even though the federal government doesn’t, so you’ll want the figure handy for your state return.

Employers may also use Box 14 for other pension-related items: nonelective employer contributions, voluntary after-tax employee contributions (other than designated Roth contributions), required employee contributions, and employer matching contributions. These help you track your basis in the plan and are informational for federal purposes.

Commuter and Parking Benefits

Transit passes and qualified parking are tax-free up to $340 per month for 2026.³ Amounts within that limit reported in Box 14 are informational. Anything above the monthly cap is taxable and should already be in Box 1. Some employers report the full benefit in Box 14, which can look alarming; call payroll if you can’t tell whether the excess made it into your wages.

State and Local Taxes You Can Deduct

State Disability Insurance and Paid Family Leave

“SDI,” “CASDI,” “NYSDI,” “NJSDI,” “NYPFL,” “FLI,” and similar labels are mandatory state disability insurance or paid family leave contributions. They come out of your pay after tax. When you itemize, these amounts generally count as state taxes paid and go on Schedule A, Line 5a alongside your state income tax withholding.² Voluntary plan disability insurance (VPDI), which some employers offer as an alternative to the state program, is treated the same way for deductibility.

Local Taxes and Employee-Paid Unemployment

Local income taxes tied to a percentage of earnings usually go in Box 19, but flat-rate occupational taxes, per-capita assessments, and other local levies that don’t fit the standard income-tax mold often land in Box 14. Either way, they generally qualify for the SALT deduction. Employee contributions toward state unemployment (labels like “SUI” or “SUT”) also appear here in states that require them and follow the same rule: after-tax and potentially deductible.

All of these deductions together are subject to the federal SALT cap on Schedule A. If your total state and local taxes exceed the cap, the extra doesn’t help on your federal return, and none of it helps at all unless you itemize instead of taking the standard deduction.

Fringe Benefits and Specialized Codes

Personal Use of a Company Vehicle

If your employer provides a vehicle you also use personally, the taxable value of that personal use is calculated using the annual lease value or another IRS-approved method. That value is added to your Box 1 wages and typically shown separately in Box 14 (often “AUTO”) so you can see the breakdown. It’s already in your wages, so you don’t report it again.

Union Dues

Union dues appear as “DUES,” “UNION,” or the union’s own abbreviation. The federal deduction for miscellaneous itemized deductions, which had included union dues, was eliminated starting in 2018, made permanent in 2025, and codified under IRC Section 67(h). Union dues are not deductible on your federal return. The Box 14 entry is informational federally, though some states still allow a deduction on the state return.

Clergy Housing Allowance

Ministers may see “HOUSING” or “PARSONAGE” in Box 14. This allowance is excludable from federal income tax and shouldn’t appear in Box 1. The excludable amount is the lesser of the officially designated housing allowance, the amount actually spent on housing, or the fair rental value of the home including furnishings and utilities.⁷ Any excess that can’t be excluded goes on Line 1h of Form 1040. Even when excluded from income tax, the housing allowance remains subject to self-employment tax, which catches some clergy by surprise.

Other Codes You Might See

Box 14 can also carry employer-paid premiums for non-major-medical health plans, nontaxable income, uniform payments, and non-qualified deferred compensation (“NQDCP” or “NONQUAL”). Employer-paid health premiums reported here are usually informational and don’t affect AGI. Non-qualified deferred compensation amounts are generally after-tax and serve as a basis record. Railroad employees see their own set of entries: Tier 1, Tier 2, and Medicare tax under the Railroad Retirement Tax Act, which replace the standard Social Security and Medicare amounts in Boxes 4 and 6.

Entering Box 14 in Tax Software

Software will ask for the description exactly as printed on your W-2, the dollar amount, and a category from a dropdown. The dropdown uses standardized names, which rarely match your employer’s abbreviation letter for letter. “CASDI” maps to a state disability insurance category; “IRC414H” maps to a Section 414(h) retirement contribution; “SEC 125” maps to a Section 125 or cafeteria plan option.

When nothing in the dropdown fits and you can’t tell what the entry is, choose “Other (not classified).” The software will carry the amount through without applying any specific tax treatment, which is the right answer for purely informational items. Picking the wrong category is worse than picking “Other,” because it can add income you don’t owe tax on or claim a deduction you’re not entitled to. Confirm with payroll first, use “Other” if you still can’t confirm.

When the Code Is Unclear or the Number Looks Wrong

Payroll is the first call. Ask two specific questions: was this amount already excluded from Box 1 wages, and is it deductible anywhere on my return? Those two answers tell you exactly how to handle the entry.

If the amount itself is wrong, your employer needs to issue a Form W-2c to correct it.⁸ Don’t file with a figure you know is wrong. The IRS matches your return against what your employer reported, and mismatches can produce a CP2000 notice proposing additional tax, penalties, and interest.⁹

1
Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3
2
Internal Revenue Service. 2025 Schedule A (Form 1040)
3
Internal Revenue Service. Publication 15-B (2026), Employers Tax Guide to Fringe Benefits
4
Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
5
Internal Revenue Service. Employer-Offered Educational Assistance Programs Can Help Pay for College
6
Internal Revenue Service. Employer Pick-Up Contributions to Benefit Plans
7
Internal Revenue Service. Ministers Compensation and Housing Allowance
8
Internal Revenue Service. About Form W-2 C, Corrected Wage and Tax Statements
9
Internal Revenue Service. Understanding Your CP2000 Series Notice