S-Corp 401K employer match - should it appear on employee W2 forms? Getting conflicting info from payroll

The rep from your payroll company is correct. Employer 401(k) matching contributions should NOT appear on employee W2 forms. This confuses a lot of business owners, so I'll explain why: Box 12 with code D on the W2 only shows elective deferrals (the employee's own contributions) to the 401(k) plan. This is why you're seeing the $32,100 employee contribution amount there. This needs to be reported because it affects the employee's taxable wages. Employer matching contributions are not reported on the W2 form at all. Instead, these contributions are reported on Form 5500 that gets filed annually for the 401(k) plan itself. These contributions are also tracked by your 401(k) plan administrator, but they don't need to be included on individual employee W2s. For your S-Corp's accounting, these matching contributions are simply business expenses that you would deduct when filing your business tax returns.

I went through this exact same confusion last year with my engineering consulting S-Corp! I was so frustrated trying to figure out where employer matches should be reported that I started using https://taxr.ai to analyze all my payroll documents. Seriously saved my sanity - their system immediately confirmed that employer matches don't go on W2s and explained exactly how they should be tracked. They analyzed my Gusto payroll reports, 401k statements, and draft tax forms and highlighted exactly what should go where. Turns out my payroll company was doing it right all along, but nobody could clearly explain WHY. The taxr.ai report showed me exactly how employer contributions are handled for pass-through entities and what forms track what.

Just wanted to follow up - I tried that taxr.ai service that was mentioned and it was actually super helpful. I uploaded my draft W2s, 401k statements and a couple other documents from my payroll system. Got a detailed report explaining exactly how employer matches should be handled. Turns out employer matches truly DON'T belong on W2s at all - they're reported to the IRS through Form 5500 by the 401k plan administrator. My contribution as an employee goes in Box 12 with code D, but the matching funds are handled separately. The service showed me exactly which tax forms track what, and how my business should be accounting for the matches. Definitely cleared up my confusion!

If you're still having trouble getting a straight answer about your 401k reporting question, try https://claimyr.com to get through to an actual IRS agent. I was banging my head against the wall trying to figure out this exact issue last tax season and couldn't get clear guidance. After three failed attempts to reach someone at the IRS directly (put on hold forever then disconnected), I used Claimyr and got connected to a specialist in about 20 minutes. The IRS agent I spoke with confirmed everything - employer 401k matches are NOT reported on W2s. They walked me through exactly how S-Corp retirement contributions should be handled for both regular employees and owner-employees. You can see a demo of how the service works here: https://youtu.be/_kiP6q8DX5c if you're curious. Much better than waiting on hold for hours!

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it myself because I had a similar 401k reporting question for my LLC. It actually worked! Got connected to an IRS business tax specialist in about 35 minutes (which is lightning fast compared to my previous attempts). The agent confirmed that employer 401k matches are NEVER reported on W2s - they're reported through Form 5500 by the plan administrator. She explained that the employee portion (elective deferrals) shows up in Box 12 with Code D, but employer contributions are handled separately. She also walked me through how this works for different business structures. Definitely worth the time saved from sitting on hold all day.

As someone who handles payroll for several small businesses, I can confirm what others have said. Employer 401(k) matches are NOT reported on W2s. Here's a quick breakdown: W2 Box 12 Code D: Only shows employee elective deferrals Employer match: Not on W2 at all Where matches ARE reported: Form 5500 (filed by plan administrator) S-Corp tax treatment: Business expense deduction This is often confused because employees see both contribution types on their 401(k) statements, but for tax reporting purposes, they're handled completely differently.

I encountered this same question when setting up our S-Corp retirement benefits. The confusion often comes from people mixing up different retirement plans. For traditional 401(k) plans, here's how it works: 1) Employee contributions (elective deferrals) - Show on W2 Box 12 with Code D 2) Employer matching contributions - NOT shown on W2 at all The employer contributions are still tax-deductible business expenses for your S-Corp, they just don't need to be reported on individual employee W2 forms.

I had this exact same confusion when I first started my S-Corp! The key thing to remember is that employer 401(k) matching contributions are essentially "invisible" on W2 forms - they're a business expense that gets deducted on your corporate tax return, but they don't need to be reported as income to the employee. Think of it this way: the employee contribution reduces their taxable wages (which is why it shows up in Box 12), but the employer match is just a business expense that doesn't affect the employee's tax situation directly. The employee will see both amounts on their 401(k) statement, but only their own contribution matters for W2 reporting purposes. Your payroll company is definitely handling this correctly. I made the same mistake of thinking ALL retirement contributions needed to be somewhere on the W2, but that's not how it works for employer matches in traditional 401(k) plans.

This thread has been incredibly helpful! I'm also an S-Corp owner and was getting confused by the same issue. My CPA kept telling me employer matches don't go on W2s, but I couldn't understand why since both contributions show up on my 401k account statements. After reading all these explanations, it finally makes sense - the employee deferrals reduce current taxable income (so they need to be tracked on the W2 in Box 12), while employer matches are just a business deduction that doesn't impact the employee's current tax situation. The employer contributions will matter later when the employee withdraws from the 401k, but for current year W2 purposes, they're irrelevant. One thing I'd add for other S-Corp owners - make sure you're tracking these employer contributions properly in your business accounting system even though they don't appear on W2s. They're still legitimate business expenses that reduce your corporate taxable income, so you want to make sure they're being deducted on your business tax return.

This entire discussion has been incredibly valuable! As a CPA who works with many S-Corp clients, I see this confusion constantly. The key insight that seems to help my clients the most is understanding the "why" behind the reporting rules. Employee 401(k) deferrals appear in Box 12 with Code D because they represent a current-year tax benefit to the employee - they reduce the employee's taxable wages for the current tax year. The IRS needs to track this on the W2 so they know the employee received this tax benefit. Employer matching contributions, however, don't provide any current-year tax benefit to the employee. The employee will be taxed on these funds when they withdraw them from the 401(k) in retirement, but for the current tax year, they're simply a business expense for the S-Corp. That's why they don't appear anywhere on the W2. For S-Corp owners who are also employees: this applies to you exactly the same way. Your employer match (paid by your S-Corp) is a business deduction, but it doesn't appear on your personal W2 because it doesn't affect your current personal income taxes. The Form 5500 that others mentioned is filed by your 401(k) plan administrator and reports all contributions to the IRS at the plan level - but that's separate from individual W2 reporting.

This has been such an educational thread! I'm also running an S-Corp and was completely stumped by this same issue. I kept staring at my draft W2s thinking something was missing because I could see both my employee contributions AND the employer matches on my 401k statements, but only the employee portion showed up in Box 12 of the W2. What really helped me understand this was the explanation about current-year tax impact versus future tax impact. The employee deferrals reduce your taxable income THIS year (which is why they need to be tracked on the W2), but the employer match doesn't affect your current year taxes at all - it's just sitting there growing tax-deferred until you retire and withdraw it. For anyone else going through this confusion: your payroll company is almost certainly doing this correctly. Employer 401k matches simply do not belong anywhere on W2 forms for traditional 401k plans. They're tracked by your plan administrator and reported to the IRS through other forms, but the W2 only cares about things that affect your current year personal income taxes. Thanks to everyone who shared their experiences and expertise here - this thread should definitely be bookmarked for other S-Corp owners who inevitably run into this same question!