In Box 14 add an extra line for "RailRoad Retirement Compensation" and then enter the following:The amount in Box 1 (Gross Wages)PLUS any amount in Box 12 - Code D - 401k Contributions(401k contributions are not taxable for federal purposes, and therefore are excluded from the Box 1 amount. You need to add it back for TurboTax to properly calculate the Tier1)

Question

W2 has amt in box 14 labeled Tier1 and tier2 that we contribute to RR. He is not retired, so this is just our contribution amt. what option do I pick in dropdown box

Forum|Forum|6 years ago
June 4, 2019
4 replies
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TurboTax Self Employed Online

DawnC0

TurboTax recognizes the codes Tier 1 and Tier 2 in box 14 of your W-2, so you only need to choose these codes from the drop-down menu. They are near the bottom of the list. Look for ''Railroad Retirement Tier 1 Tax'' and below that is ''Railroad Retirement Tier 2 tax''. TurboTax will properly report and apply these amounts on your tax return.

ADD another line 14 entry with the same amount as in Box 1 Wages. Select code - "Railroad Retirement Compensation." Code RR

You received the error message because the amount on Line 14 is greater than allowed, but entering the above information will allow your railroad income to be properly reported.

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juju0622Author

I did choose those options, but I get a warning saying that we contributed too much, because we have no railroad retirement earnings...It says we are required to be taxed on 6.2% of earnings? This is just the amount that is withheld from his check for future retirement....please advise what I need to do

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edsonmike-hotmai

It seems there may be a bigger software issue. I've followed all the steps as well and it just isnt working. The RR where i'm employed knows if your using TurboTax because all the calls they've gotten regarding this problem.Hopefully it gets figured out soon.It was never a problem in the past

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JillBaskets

In Box 14 add an extra line for "RailRoad Retirement Compensation" and then enter the following:

The amount in Box 1 (Gross Wages)
PLUS any amount in Box 12 - Code D - 401k Contributions
- (401k contributions are not taxable for federal purposes, and therefore are excluded from the Box 1 amount. You need to add it back for TurboTax to properly calculate the Tier1)

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ABerg2

I'm running into the same issue. I entered the wages from box 1 as mentioned in this thread and selected "Railroad Retirement Compensation". However, what should be used in the Description Box? Also, someone mentioned including the amount listed in box 12a with code "DD" because it is not taxable income. Is this true?

DawnC

It doesn't matter what you put in the description box, TurboTax will know what to do with the information based on the category selection of RR Retirement Compensation. You can put RR compensation in the description field. And you do not need to add anything to the box 1 wages for that entry. Entering your taxable income from Box 1 is all that is needed to remove any errors. It is true that the amounts in Box 12 with code DD (Cost of employer-sponsored health coverage) are not taxable, but you don't need to add it any Box 14 items. Code DD amounts are for informational purposes only — they don't affect the numbers in your tax return. @ABerg2

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jn32

Okay so after a lot of frustration finally realized that my employer had RRMEDWAGE for line 14. This represents your income before 401k and any other non taxable income. If you have that info typed in correctly then on the the drop down menu to the right you need to make sure to select "Railroad Retirement Compensation" . My drop down menu automatically had something else selected. 🎆PROBLEM FIXED, THANK GOD, i was about to go insane. Hope this helps someone else.

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sandman516

I had the same issue last year and just let it go... This year I investigated further. The general solution is to add an extra box 14 item for Retirement compensation using the Box 1 plus the Box 12 "D" total but this still produces the error. In my case I added Box 1 plus the Box 12 "D" plus Box 12 "GG" plus the Box 14 Tier 2 number and it comes out perfect. May have to go back a few years to make sure the Gov has it correct in their records..