What does CAF 125 mean on w2?
Cafe 125 on a W-2 tax form refers to a cafeteria plan, in which an employer offers workers a choice between various job benefits. Income from a cafeteria plan is taken directly from each employee’s paycheck before taxes are taken out.
What does CAF 125 mean?
tax-free cafeteria plans
“Cafe 125” stands for IRS regulation code section 125 regarding tax-free cafeteria plans.
Where does Section 125 go on w2?
The total dependent care benefits the employer paid to the employee or incurred on the employee’s behalf (including amounts from a section 125 plan) should be reported in Box 10 of Form W-2.
What is Cafe 125 on a W-2 tax form?
What Is ‘Cafe 125’ on a W-2 Tax Form? 1 Understanding Section 125 Plans. Cafeteria plans are also known as Section 125 plans, referencing that section of the IRS code, hence the name Café 125. 2 Finding Cafe 125 on W-2. 3 Typical Non-Taxable Benefits. 4 Benefits Not Allowed in a Cafeteria Plan. …
What does caf125 shown in box 14 mean?
The state is NY and the individual is a non-NYC resident and resides and works in Long Island. Thanks! 02-08-2021 12:14 PM The CAF 125 does not change the way the return is prepared and/or filed.
What can be offered as part of Cafe 125?
Other benefits can be offered by your employer but not as part of the Section 125 cafeteria plan. For example, your employer could offer an education benefit under which it would pay for some of your continuing education courses or night school, but unless that benefit qualifies under another section of the code, it counts as taxable income.
Why is Section 125 called a cafeteria plan?
A Section 125 ‘cafeteria’ plan is so-called because you get to choose your benefits from a menu, like choosing food at a cafeteria. However, while the plan may offer many benefits, box 14 of your W-2 shows only the benefits that apply to you.
