A lot of times when you get a W-2 at the end of the year you don’t know or understand what the codes mean in Box 12. There may or may not be descriptions on the back of the Form. Here is a quick and dirty guide to help you with what the codes and what it means:
A Uncollected social security tax or railroad retirement tax on tips.
B Uncollected medicare tax on tips.
C The cost of group-term life insurance coverage in excess of $50,000. This amount has been included in boxes 1, 3, and 5 as taxable income.
D §401(k) contributions.
E §403(b) (tax-sheltered annuity) contributions.
F §408(k)(6) (SEP) contributions.
G §457(b) contributions (a type of plan used by certain government employees).
H §501(c)(18)(D) contributions.
J The amount of any sick pay not includible in income because the employee contributed to the sick pay plan.
K The employee received excess golden parachute payments.
L The employee received a mileage allowance or per diem (daily) expense allowance in excess of the standard government rate. The portion of the reimbursement equal to the government rate is shown in box 12, and the excess is included in box 1 as taxable income.
M The taxpayer is a former employee (most likely a retiree) who received more than $50,000 group-term life insurance coverage paid for by the former employer. The amount shown with this code represents uncollected social security tax or RRTA tax on the excess coverage cost.
N This code indicates the same situation as code M, except the amount shown represents uncollected medicare tax.
P This code represents excludible amounts paid directly to an employee to help finance a work-related move.
Q Nontaxable combat pay.
R This code represents employer contributions to the employee’s Archer MSA (medical savings account).
S Employee salary reduction contributions under a §408(p) (SIMPLE) plan (not included in box 1).
T This code represents employer-provided adoption benefits. These amounts are generally nontaxable.
V Income resulting from the exercise of certain stock options. Amount is included in boxes 1, 3, and 5.
W This code represents employer contributions to the employee’s health savings account (HSA). This amount generally is not taxable. Any taxable amount will be included in box 1.
Y Deferrals under a §409A nonqualified deferred compensation plan.
Z Income under §409A on a nonqualified deferred compensation plan.
AA Designated Roth contributions to a §401(k) plan.
BB Designated Roth contributions to a §403(b) salary reduction agreement.
You should be able to go back to your boss or employment dept or human resources and have them explain specifically what the code means for you. It will be helpful to know at tax time later on.
Oct 25 2009
Kim Isaac Greenblatt
How To Read W2 Box 12 Codes