S125 on W2
On my W2 it says S125 not sure what it is?
I believe S125 stands for Section 125 Plan which is for medical and dental insurance.
The Section 125 Plan provides tax savings by reducing employee medical premiums from gross salary prior to calculation of federal income and Social Security taxes, as allowed under Internal Revenue Code (IRC) Section 125.
The Section 125 Plan reduction does not reduce the salary on which your maximum deferral limit for the Voluntary Investment Program is calculated. The reduction does, however, lower the salary on which both Social Security and unemployment benefits are calculated.
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