Question

What does BOX 12 CODE "Designated Roth contributions under a governmental 457(b) plan" signify on a W-2 form?

A) Contributions to a 401(k) plan
B) Contributions to a governmental retirement plan
C) Deductions for health insurance
D) Social security contribution

Answer 1

BOX 12 CODE "Designated Roth contributions under a governmental 457(b) plan" on a W-2 indicates contributions to a specific type of governmental retirement plan made with after-tax dollars.

Step-by-step explanation:

On a W-2 form, BOX 12 CODE "Designated Roth contributions under a governmental 457(b) plan" signifies contributions to a governmental retirement plan. This indicates that the employee has contributed to a Roth account within a 457(b) plan, which is a type of defined contribution plan specific to government and certain non-profit employees.

Unlike traditional 401(k) or 403(b) plans, these contributions are made with after-tax dollars, and distributions during retirement may be tax-free if certain conditions are met.