When my employer makes a contribution to an employee 401k account, are any taxes payed by the employee (e.g. FICA)? And does the employer match amount show anywhere on the employee's W-2 or 1040?


The 401K match has limits, but it is not taxable until you withdraw the money from the account. You can think of it as an initial lump of interest or gain.

When you leave the company you are allowed to keep it, if you are vested. You can then roll it over into a IRA, or another 401K.

When you withdraw money in retirement you will pay taxes on the match and all the gains from the match. Taxes on what you contribute will depend on if it was pre-tax or post-tax, or if it was deposited into a Roth IRA.

The amount you deposit pretax is noted on the W-2, which you attach to the 1040 form. The company match does not appear anywhere on the w-2 or 1040. It should show on your 401-K statements. Those statements should also tell you how much of the match has been vested.

  • Thanks, but what about the 2nd part of my question? – Vik David Feb 7 '12 at 22:13
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    edited to cover the w-2 and 1040 part of the question – mhoran_psprep Feb 7 '12 at 23:24
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    I verified the W-2 reporting rule by looking up the General Instructions for W-2. Page 15 has an example, "The $2,000 nonelective contribution and the $3,000 nonelective profit-sharing employer contribution are not required to be reported on Form W-2, but may be reported in box 14." – Vik David Feb 8 '12 at 18:30
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    mhoran - "When you retire you will pay taxes on the match" is what I find misleading. You pay taxes upon withdrawal. If after separating at age 55 there is no penalty. The wording to me sounds like the year you retire, you get a tax bill. I know this is not case, just trying to help you edit for clarity. – JTP - Apologise to Monica Feb 8 '12 at 23:16
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    This answer doesn't address the question of whether FICA (Social Security and Medicare) taxes have to be paid on the amounts distributed from the employer match portion (and the gains therefrom). Income tax, yes, but what about FICA (cf. the title of the question) tax? And if the answer is Yes, FICA tax must be paid, what happens if the 401k is rolled over into an IRA (employer match portion including gains therefrom must go to a Traditional IRA since it is pre-tax money)? Does FICA tax have to be paid on money distributed from that IRA? And who pays the employer's share of the FICA tax? – Dilip Sarwate Sep 11 '13 at 13:14

Employer matches (even for Roth 401Ks) are put into traditional 401K accounts and are treated as pre-tax income.

Traditional 401K plans are tax deferred accounts, meaning you won't owe any taxes on it this year, but will have to pay taxes on it when you take the money out (likely after retirement).

401K contributions (including the match) are reported to the IRS and are entered in box 12 on the W2 form.

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    See my comment on mhoran_psprep's answer. The match is not reported on Box 12 ... – Vik David Feb 8 '12 at 18:42
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    My match, and my wife's do not appear on the W2. Lots of Box 12, but not the match. – JTP - Apologise to Monica Feb 8 '12 at 23:08
  • My match is shown as a Box 14 item with the description "401MCH". – eflat Mar 1 '15 at 0:03

Employer match doesn't incur FICA tax (social security, medicare) for you at all - either current year or when you withdraw. All you have to pay is income tax when you withdraw after retirement age.

(Disclaimer - I'm not tax professional but has done my research)


For the 1st part of your question. Yes the other taxes still apply. You are only deferring your income tax, not the other taxes.

Read the 3rd paragraph:


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    That link refers to employee deferrals, not employer matches. – Craig W Mar 28 '14 at 1:20

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