Setting Up Deduction Codes #
Overview #
This knowledge base article provides comprehensive instructions on how to set up various deduction codes in Pro-Pay, a payroll software system. These codes are essential for accurate reporting and compliance with tax regulations.
Key Features #
- Detailed list of deduction codes and their descriptions
- Instructions for setting up codes in the Employer Deductions Set-up screen
- Information on W-2 form reporting
- Annual deferred compensation limits
Setting Up Deduction Codes #
To set up deduction codes in Pro-Pay, follow these steps:
- Access the Employer Deductions Set-up screen in Pro-Pay.
- Enter the appropriate code for each deduction type as listed below.
Deduction Codes and Descriptions #
Code | Description |
---|---|
A | Uncollected Social Security Tax On Tips |
B | Uncollected Medicare Tax On Tips |
C | Cost Of Group Term Life Insurance Over $50,000 |
D | 401(k) |
E | 403(b) |
F | 408(k)(6) Salary Reduction SEP |
G | 457(b) |
H | 501(c)(22)(D) |
I | Designated Roth contributions to a section 401(k) plan (prints as Code AA on W-2) |
J | Sick Pay Not Includable In Income |
K | Tax On Excess Golden Parachute Payments |
L | Certain Employee Business Expense Reimbursement |
M | Uncollected FICA Tax On Cost Of Group Term Life Insurance |
N | Uncollected MEDICARE Tax On Cost Of Group Term Life Insurance |
O | Designated Roth contributions to a section 403(b) plan (prints as Code BB on W-2) |
P | Excludable Moving Expense Reimbursements |
Q | Military Employee’s Basic Quarters, or Non Taxable Combat Pay |
R | Employer Contributions To an Archer MSA (Medical Savings Account) |
S | Employee Salary Reduction Contributions To A “SIMPLE” Plan |
T | Employer Provided Adoption Benefits |
U | Cost of employer-sponsored health coverage (prints as Code DD on W-2) |
V | Income from exercise of nonstatutory stock option(s) |
W | Employer Contributions to a Health Savings Account |
Y | 409-A – Deferrals under section 409-A non qualified deferred Comp plan |
Z | Income under section 409-A non qualified deferred Comp plan |
5 | Designated Roth Contributions under a governmental section 457(b) plan (prints as Code EE on W-2) |
6 | nQSEHRA // Qualified small employer health reimbursement arrangement (prints as Code FF on W-2) |
7 | Income from Qualified equity grants under section 83(i) (prints as Code GG on W-2) |
8 | Aggregate deferrals under section 83(i) elections as of the close of calendar year (prints as Code HH on W-2) |
W-2 Boxes 10, 11, and 14 Codes #
Code | Description | W-2 Box |
---|---|---|
1 | Dependent Care Benefits | Box 10 |
2 | Non qualified Plans | Box 11 |
3 | Other | Box 14 |
Special Code for NYS45MN Form #
Code | Description |
---|---|
9 | Answers YES to the question: Are dependent health care benefits available to any employee? |
2015 Deferred Compensation Limits #
Pro-Pay automatically sets these limits for each employee during the transfer of files from the prior year to the new year. Changes can be made to individual employee files at any time thereafter.
Plan Type | IRS Code | Pro-Pay Code | Limit |
---|---|---|---|
401(k) | 401-k | D | $17,000 |
403(b) (Tax Deferred Annuity) | 403(b) | E | $17,000 |
SIMPLE Plan | 408(p)(2)(E) | S | $11,500 |
SEP Plan (Simplified Employee Pension) | 408(k)(2)(C) | F | $550 |
457(b) (salary reduction) | 457(b) | G | $17,000 |
Troubleshooting #
If you encounter issues while setting up deduction codes:
- Verify that you are in the correct screen (Employer Deductions Set-up).
- Double-check that you have entered the correct code for each deduction type.
- Ensure that the deduction amounts do not exceed the annual limits for deferred compensation plans.
- If a code is not appearing on the W-2 form as expected, verify that the correct corresponding W-2 code is assigned.
Additional Support #
For further assistance:
- Access the help menu within the Pro-Pay payroll software.
- Visit our website at https://www.Paysoft.com for additional resources and support.
Feedback #
We value your input! If you have suggestions for improving this knowledge base article or encounter any issues not addressed here, please contact our support team through the Pro-Pay software or our website.