January 25, 2010
How does pension reflect in a W-2 form and how is it different from 401(k) etc?
sng2350 asked:
Where does pension appears in the W-2 form. Which Box within W-2 form will it appear? Does the pension has to be deducted for social security and medicare tax? Is pension a part of 401(k) and other retirement plans?
Maryjane
Where does pension appears in the W-2 form. Which Box within W-2 form will it appear? Does the pension has to be deducted for social security and medicare tax? Is pension a part of 401(k) and other retirement plans?
Maryjane
Comments on How does pension reflect in a W-2 form and how is it different from 401(k) etc?
Quinn
Pension does not show up as a dollar amount on the w2. There is a check box (forget what box) that indicates if you are ELIGIBLE for a pension. This check box basically is used by the IRS to determine if you are eligible to contribute to an IRA.
401K on your w2 reflects your contribution to your 401k plan (does not include any company contribution). Because your 401k is deductible from your federal tax (and some states). So, your Federal taxable wages are determined by taking your total wages and subtracting your 401k contribution (up to the established limits). Section 125 deductions also reduce your federal gross (contributions to health, dental and dependent and health savings accounts).
401k contributions do not impact your FICA(social security) or Medicare wages or tax. 401k is a defined contribution plan (because you contribute or can contribute). Pension is a defined benefit plan because it is paid for by the company. Pension will also have no impact on your fica or medicare tax or wages.
Ellis
if you are actually receiving monthly pension payments, you would get a 1099 in Jan-feb, not a W-2
Ashlynn
There is no W-2, the person gets a 1099-R which serves the same purpose. Pension payments are different the 401(k) distributions.