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Form W-2 Box 12 Codes: Detailed Instructions
To report employees' wage statements on Form W-2, you must be familiar with each line and box for accurate and error-free filing. While it is relatively straightforward, one part that may often confuse filers is Box 12 of Form W-2.
This article explains the purpose of Box 12 in Form W-2 and the step-by-step instructions for completing it.
Employers use Form W-2 Box 12 to report various types of compensation and benefits offered to employees that are not included in Box 1, which covers wages, tips, and other forms of compensation. This box also reports employee or certain employer contributions to retirement plans or even non-taxable income.
In Form W2, box 12 is divided into multiple boxes, such as 12a, 12b, 12c, and 12d.
What are W-2 Box 12 Codes?
Form W-2 Box 12 Codes are alphabetic codes used to identify specific types of compensation, benefits, or deductions that are reported in Box 12 of Form W-2. They help the IRS and employees understand what the reported amounts represent.
The IRS allows you to enter multiple codes on Box 12 of Form W-2 for each employee. Each code corresponds to a different compensation, deduction, or benefit type.
Quick Note: If you need to report more than four codes in box 12, an additional Form W-2 is required.
Instructions to Complete Box 12 Codes on W-2
Form W-2 Box 12 contains 30 different codes ranging from “A to II” to report certain compensation, taxes, contributions, and benefits.
Uncollected Social Security, Medicare, or RRTA Taxes
W2 Box 12 Codes
Description
Code A
Enter the code "A" to show the uncollected social security or RRTA (Railroad Retirement Tax Act) tax on tips. Do not include this amount in box 4.
Code B
Enter the code "B" to show the uncollected Medicare tax on tips. Do not show any uncollected Additional Medicare Tax. Do not include this amount in box 6.
Code M
Enter the code "M" to show the uncollected social security or RRTA tax on the taxable cost of group-term life insurance over $50,000 (for former employees).
Code N
Enter the code "N" to show the uncollected Medicare tax on the taxable cost of group-term life insurance over $50,000 (for former employees).
Retirement Plan Contributions (Elective Deferrals)
W2 Box 12 Codes
Description
Code D
Enter the code "D" to show the elective deferrals under a section 401(k) cash or deferred arrangement (plan).
Code E
Enter the code "E" to show the elective deferrals under section 403(b) salary reduction agreement.
Code F
Enter the code "F" to show the elective deferrals under section 408(k) (6) salary reduction Simplified Employee Pension plan (SEP).
Code G
Enter the code "G" to show the elective deferrals and employer contributions (including non-elective deferrals) to any governmental or nongovernmental section 457(b) deferred compensation plan.
Code H
Enter the code "H" to show the elective deferrals under section 501(c) (18)(D) tax-exempt organization plan.
Code AA
Enter the code "AA" to show the designated Roth contributions under a
section 401(k) plan.
Code BB
Enter the code "BB" to show the Designated Roth contributions under a
section 403(b) plan.
Code EE
Enter the code “EE” to show the designated Roth contributions under a governmental section 457(b) plan.
Code GG
Enter the code “GG” to show the Income from qualified equity grants under
section 83(i).
Code S
Enter the code “S” to show the employee salary reduction contributions under a section 408(p) SIMPLE plan.
Code Y
Enter the code “Y” to show the deferrals under section 409A on a nonqualified deferred compensation plan.
Health-Related Benefits and Accounts
W2 Box 12 Codes
Description
Code DD
Enter the code "DD" to show the cost of employer-sponsored health coverage.
Code W
Enter the code “W” to show the Employer contributions to a health
savings account (HSA).
Code T
Enter the code “T” to show the adoption benefits.
Other Compensation and Benefits
W2 Box 12 Codes
Description
Code C
Taxable cost of group-term life insurance over $50,000
Code J
Enter the code “J” to show the non-taxable sick pay.
Code L
Substantiated employee business expense reimbursements.
Code Q
Nontaxable combat pay (only for military personnel).
Code R
Enter the code “R” to show the employer contributions to an Archer MSA.
Code V
Enter the code “V” to show the Income from the nonstatutory stock option(s) exercise. Include this amount in boxes 1, 3 (up to the social security wage base),
and 5.
Code Z
Enter the code “Z” to show the income under a nonqualified deferred compensation plan that fails to satisfy section 409A.
Reimbursements and Medicaid Waiver Payments
W2 Box 12 Codes
Description
Code P
Enter the code “P” to show the excludable moving expense reimbursements paid directly to a member of the U.S. Armed Forces.
Code II
Enter the code "II" to display the amount of Medicaid waiver payments excluded from gross income under Notice 2014-7.
Special Employer Health Reimbursement and Aggregate Deferrals
W2 Box 12 Codes
Description
Code FF
Enter the code “FF” to show the permitted benefits under a qualified small employer health reimbursement arrangement(QSEHRA). The maximum reimbursement for an eligible employee for 2024 is $6,150 and $12,450 for families.
Code HH
Enter the code “HH” to show the aggregate deferrals under section 83(i) elections as of the close of the calendar year.
Special Taxes
W2 Box 12 Codes
Description
Code K
Enter the code “K” to show the 20% excise tax on excess golden parachute payments.
Simplify Your W-2 E-filing with TaxBandits
TaxBandits makes W-2 filing effortless, with detailed instructions for each box, guiding you through the process. Our internal audit checks automatically identify any errors to ensure accurate Form W-2 filing with the SSA.
Even if you have more employees, you can import all your employee's data with a single click using our bulk upload template (CSV).
