What does other cafe mean on W-2?

It is also known as a “cafeteria plan”. Usually, what is reported there is your medical insurance premiums that are paid with pre-tax income. They are not taxed and are not included in your W-2 Box 1 wages so you can not deduct them as medical expenses.

What does CAFE mean on my paystub?

cafeteria plans
They are called cafeteria plans because employees are given a list of benefits to choose from, similar to a cafeteria-style menu. Some benefits not covered by section 125 include: education assistance, Archer Medical Savings Accounts, meals and transportation benefits.

How do I report Cafe 125 on my taxes?

Box 14. Your employer may report your cafeteria plan deductions in Box 14, which is labeled “Other.” It might use the code “Section 125” or “Café 125,” and then state your pretax payments. This data is optional and can clear up any confusion you have about the amount in Box 1.

Is 401k included in a cafeteria plan?

A 401(k) cafeteria plan allows employees who are participating in their employer’s 401(k) plan to also choose additional types of benefits from a smorgasbord of options on a pretax basis. These benefits can include: Group term life insurance. Flexible savings accounts and health savings accounts.

Is Cafe 125 deductible?

A Section 125 plan is part of the IRS code that enables and allows employees to take taxable benefits, such as a cash salary, and convert them into nontaxable benefits. These benefits may be deducted from an employee’s paycheck before taxes are paid.

Is code DD required on w2?

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD.

Is 401k considered Cafe 125?

What other terms are used to describe a 401(k) cafeteria plan? These plans are sometimes referred to as Section 125 Plan (from the applicable IRS code) or a flexible benefits plan.

How does cafeteria plan work?

How does a cafeteria plan work? Employer contributions to the cafeteria plan are usually made pursuant to salary reduction agreements between the employer and the employee in which the employee agrees to contribute a portion of his or her salary on a pre-tax basis to pay for the qualified benefits.

What is the difference between a cafeteria plan and a Section 125 plan?

A cafeteria plan, also known as a section 125 plan, is a written plan that offers employees a choice between receiving their compensation in cash or as part of an employee benefit.