When tax season is in full swing, you’re probably dealing with multiple tax forms. The W-2 form is one of those forms you’ll receive as an employee.
Employees receive Form W-2 from their employers and the IRS receives a copy. It shows your total wages earned as well as the income and payroll taxes withheld by your employer. However, those aren’t the only figures on Form W-2.
There are four sections in W2 Box 12 codes, labeled 12a, 12b, 12c, and 12d. There is no significance to the lowercase letters. You simply give your employer a place to provide you with the information you need to prepare your tax return. The amount entered in Box 12 has an uppercase code that represents something.
Table of Contents
Form W-2 Box 12 Codes
These are the uppercase codes you may see on Box 12 of your W-2, along with their meanings.
A
Taxes uncollected on tips under the Social Security Act or Railroad Retirement Tax Act (RRTA). On Schedule 2, which is attached to your Form 1040, you should include this amount as part of your total tax liability.
B
The Medicare program does not collect tax on tips. There is no tax collected by Medicare on tips.
C
If you had group term life insurance through your employer, any premiums over $50,000 become taxable income for you. Additionally, they’re included in the taxable wages shown in boxes 1 and 3 of your W-2, so you don’t need to add them to those amounts.
D
Employees may elect to defer money to a 401(k) or SIMPLE 401(k) retirement plan.
Make sure your 401(k) has the right allocation, is properly diversified, and that you’re not paying too much in fees. Blooom’s free 401(k) analysis lets you do all of these things.
E
Retirement contributions to a 403(b) plan.
F
SEP IRA contributions.
G
Your contributions to a 457(b) retirement plan, as well as those of your employer.
H
Contributions to a 501(c) tax-exempt organization.
J
Paid sick time is nontaxable. The information is for informational purposes only – it has no impact on your taxable income.
K
Excess golden parachute payments are subject to a 20% excise tax.
L
Reimbursements for business expenses incurred by employees. These are not taxed.
M
Taxes due on the premium value of taxable group term life insurance over $50,000 for former employees that were not collected.
N
Previously uncollected Medicare tax for former employees on group term life insurance costs over $50,000.
P
Reimbursements for moving expenses paid directly to a member of the United States armed forces and not included in box 1, 3 or 5.
Q
Pay for combat that is not taxable. Taxes are not due on this, but you may be able to use it when calculating your earned income credit if it helps.
R
Contributions from Archer to a medical savings account (MSA). Today, most people use a health savings account (HSA) to pay for out-of-pocket medical expenses. You can use this number to complete Form 8853 if you have an Archer MSA.
S
SIMPLE retirement plans are funded by employee contributions.
T
You may receive adoption benefits from your employer. To determine the taxable and nontaxable portion of adoption benefits, use Form 8839.
V
The income from exercising nonstatutory stock options.
W
Contributions from your employer to your HSA. You must report this information on Form 8889.
Y
Deferrals of salaries under a 409A nonqualified deferred compensation plan.
Z
You are also required to report this amount in Box 1 of Form W-2 if you receive deferred compensation under a nonqualified plan that fails to satisfy Section 409A of the Internal Revenue Code.
AA
Roth 401(k) retirement plans allow designated contributions.
BB
Contributions to a Roth 403(b) retirement plan.
CC
The box code is only for use by employers.
DD
The cost of employer-sponsored health insurance. There is no tax on this amount.
EE
Contributions designated for Roth contributions to a governmental 457(b) retirement plan.
FF
Benefits covered by a qualified small employer health reimbursement arrangement.
GG
Section 83(i) income from qualified equity grants.
HH
At the end of the calendar year, the aggregate number of deferrals under section 83(i).
