Box 12 on Form W-2 lists special codes. These codes report extra types of income, benefits, or deductions. Each code is entered separately in boxes 12a–12d. You can list up to four codes on one W-2. If more are needed, you must issue an additional W-2 without checking the “Corrected” box.
In addition, never combine codes, even if they relate to the same benefit. For example, Roth and traditional deferrals are always shown separately.
Tax Withholding and Tip-Related Codes
A – Uncollected Social Security tax on tips
Tax owed on tips that were not collected from the employee.
B – Uncollected Medicare tax on tips
Similar to Code A, but applies to Medicare tax.
M – Uncollected Social Security tax on group-term life insurance
Applies to retirees or former employees.
N – Uncollected Medicare tax on group-term life insurance
Same as Code M, but for Medicare.
Retirement Plan Contribution Codes
D – Elective deferrals to a 401(k)
Covers both Roth and traditional pre-tax 401(k) contributions.
E – Elective deferrals to a 403(b)
Applies to tax-sheltered annuities, often in schools and nonprofits.
F – Elective deferrals to a 408(k)(6) SEP
Covers Simplified Employee Pension plan contributions.
G – Elective deferrals to a 457(b)
Used by government and certain nonprofit employees.
H – Elective deferrals to a 501(c)(18)(D)
For employees of certain nonprofit organizations.
S – SIMPLE retirement plan contributions
Elective deferrals under a SIMPLE IRA.
AA – Roth 401(k) contributions
Post-tax contributions to a 401(k).
BB – Roth 403(b) contributions
Post-tax contributions to a 403(b).
EE – Roth 457(b) contributions
Post-tax contributions to a 457(b) plan.
Compensation and Benefit Codes
C – Taxable cost of group-term life insurance over $50,000
Value of employer-paid coverage above $50,000.
J – Nontaxable sick pay
Paid by a third party such as an insurance company.
K – 20% excise tax on golden parachute payments
Applies to highly paid individuals receiving certain payouts.
L – Substantiated employee business expense reimbursements
Used in accountable plans.
P – Excludable moving expense reimbursements
Only for active-duty military members.
Q – Nontaxable combat pay
Military wages exempt from income tax.
T – Adoption benefits
Employer-provided adoption assistance.
V – Income from exercise of nonstatutory stock options
Compensation from stock option activity.
W – Employer contributions to an HSA
Includes amounts the employee elects through a cafeteria plan.
Special Deferral and Reporting Codes
Y – Deferrals under a 409A nonqualified deferred compensation plan
Total amount deferred under the plan.
Z – Income under section 409A
Amounts included in income under a failed 409A plan.
DD – Cost of employer-sponsored health coverage
Reported for information only and not taxable.
FF – Permitted benefits under a QSEHRA
Small employer health reimbursement arrangements.
GG – Income from qualified equity grants under Sec. 83(i)
Applies to certain stock-based compensation plans.
HH – Deferrals under Sec. 83(i) elections
Related to qualified equity grants.