Your benefits and your W-2 statement
At this time of year, many questions emerge about the intersection of benefits and taxes as employees review their IRS Form W-2.
Several employee benefits programs that Stanford offers to eligible faculty and staff are non-taxable, meaning the university can help you pay for services without it being considered income; other programs are tax-advantaged, meaning that you can pay for services with part of your paycheck before taxes are calculated. In both cases, you have the capacity to save money throughout the year.
The Form W-2 reports what you earned and what taxes you paid during the tax year. Some benefits are reported on the forms even if they are non-taxable, and this causes confusion. It’s important to note that just because benefits are reported doesn’t mean you’ve paid taxes or will have to pay taxes on them. If you aren’t sure about your tax liability, consult with a tax professional or the IRS directly.
How to read your W-2
Your W-2 forms are mailed to you by the end of January each year, but we encourage you to opt-in for electronic delivery, which means you'll have secure online access to your W-2 through Axess starting Jan. 15 each year. Additional W-2 information can also be found on Fingate.
Box A: You should always double-check your Social Security Number. If there is an error, Fingate provides directions for how to correct it.
Box 1: This reflects what you earned this year, which includes taxable benefits. This does not include:
- wages earned from another employer last year
- before-tax deductions for medical, dental or vision insurance, parking benefits or before-tax retirement contributions
- wage replacement you were paid directly from Lincoln Financial while on a family or disability leave; you will receive additional forms from AbsenceOne to submit with your tax filing that reflect additional wages you were paid on leave
Box 2: This amount is determined based on your withholdings on your Form W-4. If it’s been a while since you looked at that form, you may want to log into Axess and review it. Details about changing withholdings can be found on Fingate.
Box 10: Employers report dependent care benefits, which include your before-tax contributions to your dependent care FSA, the Child Care Subsidy Grant, as well as usage of Stanford's Back-Up Care program available through Bright Horizons. You have not paid taxes on the first $5,000 of dependent care benefits; anything over $5,000 will be added to your Boxes 1, 3 and 5 (e.g. a CCSG award recipient who also participates in the Stanford Back-Up Care program in a given tax year). You may need to complete Form 2441, Child and Dependent Care Expenses, to compute any taxable and nontaxable amounts.
Box 12: This is a collection of status codes and amounts to determine if something is taxable income. The IRS website offers a complete list of codes. Here are some common codes that may relate to Stanford benefits:
- DD — Cost of employer-sponsored health coverage; this is included for your information and is not taxable to you
- W — Employer and employee contributions to your health savings account (HSA), which is not federally taxed but is taxable in California
- E — Elective deferrals under a Section 403(b) salary reduction agreement
- T — Adoption benefits (not included in Box 1)
Box 14: CAVDI or CASDI refers to California state disability leave insurance, and the amount to which you paid into the insurance program this year. If you are unable to work due to a non-work related illness or injury, such as maternity leave, this income protection plan pays a benefit. Stanford automatically enrolls you in the VDI plan (if you live in California) or a short-term disability plan (if you live outside of California) starting on your date of hire. Learn more about state disability insurance on Cardinal at Work.
Alphabetical listing of benefits and where to find them
- Adoption assistance - Box 12, code T
- Child Care Subsidy Grant - Box 10
- Dependent day care FSA - Box 10
- Disability pay - This will be sent to you separately from AbsenceOne
- Emergency and backup care - Box 10
- Faculty Child Care Assistance Program (this is considered taxable income) - Box 1
- Health insurance (employer contributions) - Box 12, code DD
- HSA (employer and employee contributions) - Box 12, code W
- Junior Faculty Dependent Care Travel Grant Program (this is considered taxable income) - Box 1 and Box 16
- Stanford Contributory Retirement Plan (employee contributions) - Box 12, code E
- Stanford Training Assistance Program - STAP funds are non-taxable, unless the reimbursement is paid more than 60 days after the expense was incurred, in which case it may be reflected in Box 1
- Stanford Tuition Reimbursement Program - STRP funds are non-taxable if less than $5,250 per tax year; amounts over the limit would be considered taxable income and reflected in Box 1 and Box 16
- Tuition Grant Program - TGP is non-taxable, unless your child cannot be claimed as your dependent on your federal income tax return, in which case this is considered taxable income and will be reflected in Box 1 and Box 16