IRS Box 14 Codes: SDI, PFL, S-Corp Health, and Parsonage

The codes in Box 14 of your W-2 are labels your employer picks to describe amounts that affect your pay or taxes but don’t fit anywhere else on the form. Most W-2 Box 14 codes are informational, but a handful (S-corporation health insurance premiums, state disability and paid family leave contributions, and a clergy parsonage allowance) can change what you owe or get back. Starting with 2026 W-2s, the IRS split the old Box 14 into Box 14a for these miscellaneous items and Box 14b for Treasury Tipped Occupation Codes; if you aren’t a tipped worker, Box 14b will be blank and everything you used to look for in Box 14 now sits in Box 14a.¹

Why the Labels Aren’t Standardized

Boxes 1 through 12 follow strict IRS formatting. Box 14a does not. The official instructions let employers use it “for any other information that you want to give to your employee,” as long as each item is labeled.¹ One company might write “SDI,” another “CASDI,” a third “State Disab” for the same withholding. If a code on your form doesn’t match anything below, your payroll department is the right first call. They can tell you exactly what the abbreviation stands for and whether the amount was already included in your Box 1 wages.

Codes That Can Change Your Federal Tax

S-Corporation Health Insurance (SCORP, SEHLTH, 2% SH MED)

If you own more than 2% of an S-corporation and the company pays your health insurance premiums, those premiums are added to your taxable wages in Box 1 but exempt from Social Security and Medicare tax. The premium amount appears in Box 14a so you can claim it as the self-employed health insurance deduction.² The deduction goes on Schedule 1 (Form 1040), line 17, which reduces your adjusted gross income whether or not you itemize.³

State Disability, Unemployment, and Family Leave (SDI, CASDI, NYSDI, PFL, FLI)

Several states require employees to contribute to disability insurance or paid family leave through payroll withholding. These show up in Box 14a with codes like SDI, CASDI, NYSDI, PFL, or FLI. The IRS treats mandatory contributions to state funds that protect against wage loss as deductible state and local taxes.⁴ The Schedule A instructions specifically list mandatory contributions to state disability benefit funds, state unemployment funds, and state family leave programs as deductible on line 5a.⁵

Two conditions apply. You have to itemize, and the amount counts toward your overall state and local tax (SALT) deduction cap, which is $40,400 for 2026 ($20,200 if married filing separately).⁶ On its own the SDI line is small. Combined with state income tax, property tax, mortgage interest, and charitable gifts, it can be the amount that tips you past the standard deduction.

Parsonage or Housing Allowance (HOUSING, PARSONAGE)

If you’re a member of the clergy, your employer usually reports your housing or parsonage allowance in Box 14a. The excludable portion (generally the smallest of your actual housing expenses, the fair rental value of the home, or the officially designated allowance) is not included in your Box 1 wages. Anything you can’t exclude must be reported as income on Form 1040, line 1h.⁷

Codes That Are Just for Your Information

Union Dues

Union dues withheld from your pay often appear in Box 14a. The federal deduction for union dues was suspended by the Tax Cuts and Jobs Act starting in 2018, and the One Big Beautiful Bill Act made the elimination permanent.⁸ The amount still appears on your W-2 because some states allow the deduction on the state return, but it will not reduce your federal taxes.

Educational Assistance

Employer-provided educational assistance up to $5,250 per year is tax-free and excluded from Box 1 wages.¹ Employers often list the full amount in Box 14a so you can see what was provided. You don’t report the excluded portion anywhere. Any amount above $5,250 is already included in your Box 1 wages and taxed as regular income.

Commuter and Transit Benefits

Qualified parking and transit or vanpool benefits within the monthly tax-free limits are informational only when they appear in Box 14a. If a benefit exceeded the limit, the excess is already in your Box 1 wages. Starting in 2026, bicycle commuting reimbursements are fully taxable; the exclusion has been permanently eliminated.⁹

Other Fringe Benefits

Employers also use Box 14a for company vehicle lease values, uniform or clothing allowances, employer contributions to pension plans (including nonelective, matching, and required employee contributions), and other fringe benefits.¹ If a benefit’s value was taxable, it’s already baked into Box 1. The Box 14a entry simply shows the breakdown.

Where Each Item Goes on Your Return

S-corporation health insurance premiums: Schedule 1 (Form 1040), line 17.²
State disability, unemployment, and family leave contributions: Schedule A, line 5a, subject to the SALT cap.⁴
Union dues, educational assistance within the $5,250 limit, qualified commuter benefits: informational, no federal entry.
Non-excludable parsonage allowance: Form 1040, line 1h.⁷

When entering Box 14a amounts into tax software, type the employer’s label exactly as it appears, then pick the category the software offers (“State disability insurance,” “Union dues,” and so on). That category selection, not the label, controls where the number flows. Choosing the wrong one is a common filing error that can lose you a valid deduction or create one you aren’t entitled to.

If a Code or Amount Looks Wrong

Start with your employer’s payroll department. They can issue a corrected form (W-2c). If you’ve asked and the corrected form hasn’t arrived by the end of February, you can call the IRS at 800-829-1040 or visit a Taxpayer Assistance Center. The IRS will send your employer a letter requesting a corrected W-2 within ten days.¹⁰

If the corrected form won’t arrive in time to file, the IRS will send you Form 4852 to use as a substitute W-2, which you fill in from pay stubs, bank statements, and prior forms. If a corrected W-2 shows up later with different numbers, amend your return using Form 1040-X.¹⁰

1
Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3
2
Internal Revenue Service. S Corporation Compensation and Medical Insurance Issues
3
Internal Revenue Service. Form 7206 – Self-Employed Health Insurance Deduction
4
Internal Revenue Service. Topic No. 503, Deductible Taxes
5
Internal Revenue Service. Instructions for Schedule A (Form 1040)
6
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
7
Internal Revenue Service. Ministers’ Compensation and Housing Allowance
8
Internal Revenue Service. Publication 525 – Taxable and Nontaxable Income
9
Internal Revenue Service. Employer’s Tax Guide to Fringe Benefits
10
Internal Revenue Service. W-2 – Additional, Incorrect, Lost, Non-Receipt, Omitted