How to treat handle W-2 Box 12a code DD amounts - IRC 3401(a) Comp

[AdKu]

One of my clients sent me employees compensation information directly exported from their payroll system.

A week later I have received W-2s for all employees, including W-3 (Summary of W2 Data Totals for Company).

Most employees’ compensation from the payroll system was higher than the W-2 box 5 compensation.

Majority of affected employees’ W-2 box 12a shows some amount with code DD (cost of employer sponsored health coverage). These employees’ compensation from the payroll system equals the sum of the W-2s box 5 and box 12a code DD.

For some other employees, I needed to add W-2s box 14 code GAP, box 5 and box 12a code DD to get to the compensation from the payroll system.

Compensation definition in the plan is 3401(a). I suppose I needed to increase the compensation by elective deferrals under IRC 402(g)(3), IRC 125, IRC 457 and IRC 132(f)(4).

Does this mean the compensation for retirement plan purposes has to be the sum of W-2 box 5, box 12a code DD and box 14 code GAP (or in short the compensation from their payroll system)?

Help please (if possible examples and explanation from the code or the regulation).

 

[Bird]

I think you just need to use comp from the payroll system.  Everything else is a distraction.