You can track employer benefits. A benefit is money deducted from an employer's paycheck for special services, such as 401(k) investments, medical insurance, and dental insurance. These deductions have specific tax consequences.
On the Payroll tab, click Tax Setup > Benefits/Allowances > Employer Benefits.
Enter the necessary information.
Description—Enter a description for the benefit.
W2 Code—Enter a letter code for this type of benefit from the list on the back of the W-2 form. The code letter prints in Box 12 of the W-2. Some common codes used for Box 12 include:
Code C – Taxable cost of group-term life insurance over $50,000.
Code AA – Designated Roth contributions under a section 401(k) plan.
Code DD – Cost of employer-sponsored health coverage.