What Is in Box 12 of a W-2? Common Codes Explained

The W-2 form, or Wage and Tax Statement, is a federal tax document employers issue annually to report an employee’s yearly wages and taxes withheld. This form is foundational for preparing individual income tax returns, providing the Internal Revenue Service (IRS) with a summary of earnings and tax payments. Box 12 on the W-2 reports various types of income, benefits, and deductions that do not fit into the primary wage and tax boxes.

Purpose of Box 12

Box 12 on a W-2 form serves as a specific reporting area where employers detail certain types of compensation, benefits, or deductions using designated alphabetical codes. These items are reported separately because they often have unique tax treatments. Some amounts in Box 12 might be included in your taxable wages (Box 1), while others are for informational purposes only and are not taxable. The information reported helps the IRS and the employee understand the full scope of compensation and benefits received, ensuring proper tax calculation.

Key Box 12 Codes

Box 12 contains various codes, each representing a specific type of income, benefit, or contribution.

Code D: Elective deferrals to a 401(k) cash or deferred arrangement, including SIMPLE 401(k)s. These are pre-tax contributions that reduce your taxable income.
Code DD: Cost of employer-sponsored health coverage, which is for informational purposes only and is not taxable income.
Code E: Elective deferrals to a 403(b) salary reduction agreement, typically for employees of public schools and certain tax-exempt organizations.
Code F: Elective deferrals under a 408(k)(6) Simplified Employee Pension (SEP) plan.
Code G: Elective deferrals and employer contributions to a 457(b) deferred compensation plan, often for governmental and some non-governmental tax-exempt entities.
Code H: Elective deferrals to a 501(c)(18)(D) tax-exempt organization plan.
Code P: Excludable moving expense reimbursements paid directly to a member of the U.S. Armed Forces, which are not included in taxable income.
Code V: Income from the exercise of nonstatutory stock options, which is generally included in wages (Box 1) but is also shown here for clarity.
Code W: Employer contributions to a Health Savings Account (HSA).
Code AA: Designated Roth contributions to a 401(k) plan. These are after-tax contributions, meaning qualified distributions will be tax-free in retirement.
Code BB: Designated Roth contributions to a 403(b) plan.
Code CC: Designated Roth contributions under a governmental 457(b) plan.
Code GG: Income from qualified equity grants under 83(i).
Code HH: Aggregate deferrals under 83(i) elections as of the close of the calendar year.
Code S: Employee salary reduction contributions under a 408(p) SIMPLE plan.
Code Y: Deferrals under a 409A nonqualified deferred compensation plan.
Code Z: Income under a nonqualified deferred compensation plan that fails to meet 409A requirements; this amount is also included in Box 1 and may be subject to an additional 20% tax plus interest.
Code A and B: Uncollected Social Security or Medicare tax on tips.
Code C: Taxable cost of group-term life insurance over $50,000, which is typically included in Boxes 1, 3, and 5.

Reporting Box 12 Information on Your Tax Return

Information from Box 12 is transferred to specific lines on your federal income tax return, primarily Form 1040 and its associated schedules.

Amounts reported under codes for retirement plan contributions, such as Code D (401(k) elective deferrals), Code E (403(b) elective deferrals), or Code G (457(b) deferrals), typically represent pre-tax contributions. These amounts are already excluded from your taxable wages in Box 1 of your W-2, meaning they reduce your taxable income. While they are informational on the W-2, they are often used to determine eligibility for certain tax credits, such as the Retirement Savings Contributions Credit (Saver’s Credit), which is calculated on Form 8880.

Amounts for employer contributions to a Health Savings Account (HSA) under Code W are generally not taxable income and are reported on Form 8889, Health Savings Accounts (HSAs). This form helps determine any deductible contributions and taxable distributions from the HSA.

Codes A and B, which represent uncollected Social Security or Medicare tax on tips, are added to your total tax liability on Schedule 2 (Form 1040), “Additional Taxes.” The cost of employer-sponsored health coverage (Code DD) is informational and does not directly affect your taxable income. Income from the exercise of nonstatutory stock options (Code V) is generally already included in Box 1 wages, but its reporting in Box 12 provides additional detail for the IRS. Amounts from nonqualified deferred compensation plans (Code Z) that fail 409A requirements are included in Box 1, and the additional tax and interest associated with non-compliance must be calculated and reported on your tax return.