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Understanding Your Wage Statement W-2 BOX 12

When you are applying for a job, you will get an employee handbook outlining policies, responsibilities of employer and employee, and BENEFITS.


Most people do not read their handbook or understand what the different employee benefits mean. Did you know some benefits may give you a tax credit if you qualify?


When you get your W2, the tax professional will enter the codes in your box 12. Some benefits will get calculated, and some have to be entered manually and you may get a separate tax form for that particular benefit. If you get a tax form, make sure to give it to your tax preparer.



The W-2 box 12 codes are:

  • A – Uncollected Social Security tax or Railroad Retirement Tax Act (RRTA) tax on tips.

  • B – Uncollected Medicare tax on tips.

  • C – Taxable costs of group-term life insurance over $50,000 (included in W-2 boxes 1,3 (up to Social Security wages base), and box 5); Taxable costs are information only

  • D – Elective deferral under a Section 401(k) cash or arrangement plan. This includes a SIMPLE 401(k) arrangement.

  • E – Code E includes elective deferrals under a Section 403(b) salary reduction agreement. You may be able to claim the Saver’s Credit,

  • F – Elective deferrals under a Section 408(k)(6) salary reduction SEP. You may be able to claim the Saver’s Credit,

  • G – Elective deferrals and employer contributions (including non-elective deferrals) to a Section 457(b) deferred compensation plan. You may be able to claim employer contributions the Saver’s Credit,

  • H – Elective deferrals to a Section 501(c)(18)(D) tax-exempt organization plan. You may be able to claim the Saver’s Credit,

  • J – Nontaxable sick pay (information only, not included in W-2 boxes 1, 3, or 5)

  • K – 20% excise tax on excess golden parachute payments.

  • L – Substantiated employee business expense reimbursements (nontaxable). You may need to file Form 2106, Employee Business Expenses.

  • M – Uncollected Social Security tax or RRTA tax on taxable cost of group-term life insurance over $50,000 (former employees only).

  • N – Uncollected Medicare tax on taxable cost of group-term life insurance over $50,000 (former employees only).

  • P – Excludable moving expense reimbursements paid directly to a member of the U.S. Armed Forces (not included in Boxes 1, 3, or 5).

  • Q – Nontaxable combat pay.

  • R – Any employer contributions to your Archer medical savings account (MSA).

  • S – Employee salary reduction contributions under a Section 408(p) SIMPLE. (Not included in Box 1). You may be able to claim the Saver’s Credit,

  • T – Employer Provided Adoption benefits (not included in Box 1). Complete Form 8839, Qualified Adoption Expenses, to compute any excludable amounts.

  • V – Income from exercise of non-statutory stock option(s ) (included in Boxes 1, 3 (up to Social Security wage base), and 5).

  • W – Employer contributions (including amounts the employee elected to contribute using a Section 125 cafeteria plan) to your health savings account (HSA).

  • Y – Deferrals under a Section 409A nonqualified deferred compensation plan.

  • Z – Income under a nonqualified deferred compensation plan that fails to satisfy Section 409A. This amount is also included in Box 1 and is subject to an additional 20% tax plus interest.

  • AA – Designated Roth contributions under a 401(k) plan. Roth contributions are not deductible; however, you may be able to claim the Saver’s Credit, Form 1040 Schedule 3, line 4.

  • BB – Designated Roth contributions under a 403(b) plan. Roth contributions are not deductible; however, you may be able to claim the Saver’s Credit,

  • DD – Code DD includes cost of employer-sponsored health coverage. Information only.

  • EE – Designated Roth contributions under a governmental 457(b) plan. This amount doesn’t apply to contributions under a tax-exempt organization Section 457(b) plan. Roth contributions are not deductible; however, you may be able to claim the Saver’s Credit,

  • FF – Permitted benefits under a qualified small employer health insurance reimbursement arrangement. Information only.

  • GG – Income from qualified equity grants under Section 83(i). Information only. This amount is includible in gross income from qualified equity grants under section 83(i)(1)(A) for the calendar year. This amount is wages for box 1.

  • HH – Aggregate deferrals under Section 83(i) elections as of the close of the calendar year. Information only.

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