Form W-2 Box 13 Explained: When to Check the Retirement Plan Box
Confused about Form W-2 Box 13? Learn when the retirement plan box should be checked, what “active participant” means, and how employer and employee contributions affect reporting.
When reviewing Form W-2 at year end, Box 13 is one of the most commonly misunderstood checkboxes, and one of the easiest to get wrong. The “Retirement plan” indicator may seem minor, but it plays an important role in how an employee’s personal tax return is prepared and whether certain IRA deductions are allowed. Checking (or not checking) this box isn’t based solely on whether someone chose to contribute. If they were considered an “active participant” in an employer-sponsored retirement plan at any point during the year may impact the checkbox as well.
To help employers, payroll teams, and advisors apply this rule consistently, it’s important to understand the IRS definition of active participation and the specific scenarios that trigger Box 13 reporting. The guidance below walks through the IRS rules and a practical decision framework to determine when Box 13 should, or should not, be checked.
Form W2 Instructions: https://www.irs.gov/pub/irs-pdf/iw2w3.pdf
| Type of Plan | Conditions | Check Retirement Plan Box? |
| Defined benefit plan (for example, a traditional pension plan) | Employee qualifies for employer funding into the plan, due to age/years of service—even though the employee may not be vested or ever collect benefits | Yes |
| Defined contribution plan (for example, a 401(k) or 403(b) plan, a Roth 401(k) or 403(b) account, but not a 457 plan) | Employee is eligible to contribute but does not elect to contribute any money in this tax year | No |
| Defined contribution plan (for example, a 401(k) or 403(b) plan, a Roth 401(k) or 403(b) account, but not a 457 plan) | Employee is eligible to contribute and elects to contribute money in this tax year | Yes |
| Defined contribution plan (for example, a 401(k) or 403(b) plan, a Roth 401(k) or 403(b) account, but not a 457 plan) | Employee is eligible to contribute but does not elect to contribute any money in this tax year, but the employer does contribute funds | Yes |
| Defined contribution plan (for example, a 401(k) or 403(b) plan, a Roth 401(k) or 403(b) account, but not a 457 plan) | Employee contributed in past years but not during the current tax year under report | No (even if the account value grows due to gains in the investments) |
| Profit-sharing plan | Plan includes a grace period after the close of the plan year when profit sharing can be added to the participant’s account | Yes, unless the employer contribution is purely discretionary and no contribution is made by end of plan year |
Check box 13 on Form W2 if the employee was an “active participant” (for any part of the year) in any of the following.
1. A qualified pension, profit-sharing, or stock-bonus plan described in section 401(a) (including a 401(k) plan).
2. An annuity plan described in section 403(a).
3. An annuity contract or custodial account described in section 403(b).
4. A simplified employee pension (SEP) plan described in section 408(k).
5. A SIMPLE retirement account described in section 408(p).
6. A trust described in section 501(c)(18).
7. A plan for federal, state, or local government employees or by an agency or instrumentality thereof (other than a section 457(b) plan).
Do not check this box for contributions made to a non-qualified or section 457(b) plan.
Generally, an employee is an active participant if covered by:
(a) a defined benefit plan for any tax year that they are eligible to participate in, or
(b) a defined contribution plan (for example, a section 401(k) plan) for any tax year that employer or employee contributions (or forfeitures) are added to their account. For additional information on employees who are eligible to participate in a plan, contact your plan administrator.
Why does it matter?
When Box 13 is checked, it signals that the individual was covered by an employer retirement plan during the year. This matters because it may affect their ability to deduct contributions to a traditional IRA on their personal tax return (depending on their filing status and modified adjusted gross income).
Decision Steps to Determine Whether to Check Box 13
Use the decision steps below to ensure accurate and consistent reporting.
Step 1 — Did the employer offer a qualified retirement plan during the year?
Qualified plans include:
401(k) / 401(a) plans
403(a) and 403(b) annuity plans
SEP (408(k)) and SIMPLE (408(p)) plans
Certain 501(c)(18) plans
Defined-benefit pension plans
❌If No → Box 13 should not be checked.
✅If Yes → Proceed to Step 2.
Step 2 — Was the employee eligible to participate in the plan at any time during the year?
Eligibility alone generally triggers “active participant” status.
❌If No → Do not check Box 13.
✅If Yes → Proceed to Step 3.
Step 3 — Did the employee make contributions during the year? Includes:
Pre-tax deferrals
Roth deferrals
Catch-up contributions
After-tax contributions (if the plan allows)
✅If Yes → Check Box 13. The payroll system is configured to automatically check the Retirement Plan box on Form W2 if the employee contributed to a 401K or 403b plan during the year.
❌ If No → Proceed to Step 4.
Step 4 — Did the employer make contributions for the employee?
Examples:
Employer match
Nonelective contributions
Profit-sharing allocations
Forfeiture allocations
✅If Yes → Check Box 13.
❌If No → Proceed to Step 5.
Step 5 — Is the employee considered an active participant in a defined-benefit (pension) plan?
In Defined Benefit plans, eligibility or benefit accrual is enough — employee contributions are not required.
✅If Yes → Check Box 13.
❌If No → Proceed to Step 6.
Step 6 — Is the employee only participating in a plan that does not trigger Box 13?
Box 13 should not be checked if the employee is only covered under:
A 457(b) deferred compensation plan
A non-qualified deferred compensation plan
A plan from a prior employer (rehired retirees)