The codes and amounts in Box 12 of your W-2 are important for preparing your return. Some codes affect your current year income tax return, and other codes are simply for your information. Enter them into Common Form and we’ll handle them appropriately.
Here’s a summary of the codes that pertain to your tax return and how we handle these amounts for you:
- A and B: Uncollected social security and Medicare tax on tips. This represents the social security and Medicare tax on the tips you reported to your employer. There will be an amount here if your employer didn’t withhold social security or Medicare taxes on these tips.
- C: Taxable cost of group-term life insurance. You received group-term life insurance valued at more than $50,000 from your employer. The amount is also reported in Boxes 1, 3 and 5 of your W-2 and appears in Box 12 for your information only.
D, E, F, G, S, and H: These codes give you information about contributions to your retirement plan at work, and they are for your information only:
- D: 401(k) plan
- E: 403(b) plan
- F: 408(k)(6) plan
- G: 457(b) plan
- S: 408(p) salary reduction SIMPLE retirement account
- H: 501(c)(18)(D) plan
- J: You received non-taxable sick pay.
- K: Excise tax for excess golden parachute payments.
- L: Your employer reimbursed you for employee business expenses that you paid out of your own pocket and the amount you received as a reimbursement is greater than the amount you actually spent. This amount isn’t included in your income in Box 1, so you cannot deduct any of the expenses related to this reimbursement.
- M and N: Uncollected social security and Medicare tax on group-term life insurance. If your employer pays for life insurance for you, you have to pay tax on premiums for the life insurance coverage that is in excess of $50,000. The amount of the excess premiums are included in Box 1 of your Form W-2, so you’ll pay income tax on them when you file your return. Your employer didn’t withhold any social security or Medicare taxes on the amount, so you cannot file a Form 1040EZ.
- P: Exclusionary moving expense reimbursements. This amount isn’t included in your income in Box 1.
- R: Your employer made contributions to an Archer MSA (medical savings account) for you. If you have to pay tax on any of the contributions, the amount is already included in Box 1 of your W-2.
- T: Employer-provided adoption benefits.
- V: Your income from the exercise of non-statutory stock options. This amount is included in Box 1 of your W-2.
- W: Employer contributions (including amounts the employee elected to contribute using a section 125 (cafeteria) plan) to your health savings account. Reported on Form 8889, Health Savings Accounts (HSAs).
- Y: Deferrals under section 409(A) on an nonqualified deferred compensation plan.
- Z: Income under section 409(A) on a nonqualified deferred compensation plan. This amount is also included in Box 1. It is subject to an additional 20% tax plus interest.
- AA: Designated Roth contributions under a section 401(k) plan.
- BB: Designated Roth contributions under a section 403(b) plan.
- DD: Cost of employer sponsored health coverage. This amount is not taxable.
- EE: Designated Roth contributions under governmental section 457(b) plan. This amount does not apply to contributions under a tax-exempt organization section 457(b) plan.