What Do W-2 Box 12 Codes Mean? Deferrals, Roth, and Insurance

The codes in Box 12 of your W-2 identify specific types of pay, benefits, and uncollected taxes that don’t fit into the regular wage boxes, and each letter tells you something different about how that amount affects your return. Some codes flag money already sitting inside your Box 1 taxable wages. Others mark amounts excluded from Box 1. A few exist only so the IRS can track totals, with no effect on what you owe. This is a full reference to the W-2 Box 12 codes you’re likely to see, what each one means, and when you need to do something about it.

How Box 12 Is Laid Out

Box 12 has four slots labeled 12a, 12b, 12c, and 12d. Each slot holds one letter code and a dollar amount. If your employer needs to report more than four items, you’ll get a second W-2 with the same name, address, and identifying information and the extra codes filled in.¹ That second form isn’t a duplicate or a mistake. The 12a/12b/12c/12d labels are just slot numbers; they carry no meaning of their own. What matters is the letter code inside each slot.

Retirement Plan Deferrals (Pre-Tax)

These codes cover money redirected from your paycheck into a retirement account before income tax. The amounts are excluded from Box 1 but generally still counted in Boxes 3 and 5 for Social Security and Medicare.

Code D — Pre-tax 401(k) salary deferrals. The 2026 elective deferral limit is $24,500. Employees 50 and older can add an $8,000 catch-up, and those aged 60 through 63 qualify for an $11,250 catch-up under SECURE 2.0.²
Code E — Pre-tax 403(b) deferrals, common at public schools and nonprofits. Same 2026 limits as Code D.³
Code F — Salary reduction contributions to a SARSEP. These plans are closed to new employers but existing ones still operate.¹
Code G — Elective and employer contributions to a 457(b) plan, used mostly by state and local government employers. The 2026 deferral limit matches the 401(k) at $24,500.¹
Code H — Contributions to a 501(c)(18)(D) plan. Unlike the other retirement codes, this amount is included in Box 1; you claim it as a deduction on your return.⁴
Code S — SIMPLE IRA salary reduction contributions. The 2026 limit is $17,000, with a $4,000 catch-up at 50 and $5,250 for ages 60 through 63.⁵

If you worked for more than one employer during the year, your combined deferrals under Codes D, E, F, G, and S can’t exceed the annual limit. Neither employer sees what the other withheld, so you have to track that total yourself.²

Roth Retirement Contributions

Roth contributions are made with after-tax dollars, so the amounts stay inside your Box 1 wages. The Box 12 entry is there to identify them for future tax-free distributions.

Code AA — Designated Roth 401(k) contributions.⁴
Code BB — Designated Roth 403(b) contributions.¹
Code EE — Designated Roth contributions to a governmental 457(b). Nongovernmental 457(b) plans cannot offer a Roth option.⁴

Starting in 2026, if you earned $150,000 or more in FICA wages the prior year, any catch-up contributions must be Roth, so expect those amounts under Code AA, BB, or EE instead of the pre-tax codes.

Health and Insurance Codes

Code W — HSA contributions. Reports every dollar going into your Health Savings Account, both your employer’s direct contribution and any salary you routed through a cafeteria plan.¹ The 2026 HSA limits are $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up at age 55.⁶ You must file Form 8889 with your return to report this amount, even though it isn’t taxable. Skipping that form is a common trigger for an IRS notice.

Code DD — Cost of employer-sponsored health coverage. Purely informational. It shows the combined cost of your health plan, both your share and your employer’s.⁷ It goes nowhere on your return and does not affect your taxable income.

Code FF — Health Reimbursement Arrangement. The total your employer contributed to an HRA on your behalf. Also informational and not taxable.¹

Code R — Archer MSA contributions. Employer contributions to an Archer Medical Savings Account, the older predecessor to the HSA. If you still have one, report the amount on Form 8853.¹

Group-Term Life Insurance

Employer-provided group-term life insurance is tax-free on the first $50,000 of coverage. Anything above that creates taxable imputed income under Section 79.⁸

Code C — Taxable cost of coverage above $50,000. Already included in Boxes 1, 3, and 5.⁹
Code M — Uncollected Social Security tax on that excess coverage, for former employees whose old employer couldn’t withhold it. You owe this when you file.¹
Code N — Uncollected Medicare tax on the same excess coverage. Codes M and N are reported on Schedule 2 of Form 1040.⁹

Uncollected Tax on Tips

If your regular wages weren’t enough for your employer to withhold all the Social Security and Medicare tax owed on your tips, the shortfall lands in Box 12.

Code A — Uncollected Social Security or RRTA tax on tips. Not included in Box 4; you pay it when you file.¹
Code B — Uncollected Medicare tax on tips. Not included in Box 6.¹

Both amounts go on Schedule 2. If you see A or B, your final tax bill will run higher than Box 1 alone suggests.

Nonqualified Deferred Compensation

Code Y — Deferrals under a nonqualified deferred compensation plan. The timing of when this becomes taxable depends on how the plan is structured.¹
Code Z — Income from a nonqualified deferred compensation plan that became taxable this year, typically through vesting or distribution. Included in Box 1.¹

Stock and Equity Compensation

Code V — Income from exercising a nonstatutory stock option, meaning the spread between exercise price and market value. Already included in Boxes 1, 3, and 5. Incentive stock options (ISOs) are not reported here.¹
Code GG — Income from a qualified equity grant under Section 83(i). If you work for a privately held company and elected to defer stock income for up to five years, this reports the amount recognized when the deferral ended.¹⁰

Other Codes You Might See

Code J — Nontaxable sick pay from a third-party insurer, excluded from Boxes 1, 3, and 5, because you contributed to the sick pay plan yourself.¹
Code K — 20% excise tax on excess golden parachute payments. Rare outside major corporate transactions.¹
Code L — Substantiated employee business expense reimbursements paid under an accountable plan. Not included in Box 1.
Code P — Excludable moving expense reimbursements for active-duty military and members of the intelligence community relocating on a permanent change of station. Not included in Box 1.¹
Code Q — Nontaxable combat pay for military service members. Excluded from earned income by default, but you can elect to include the full amount when calculating the Earned Income Tax Credit if it produces a larger credit. All or none, not partial.¹
Code T — Employer-provided adoption benefits. To claim the exclusion, file Form 8839 with your return.¹¹

If Your Deferrals Exceed the Annual Limit

The IRS uses your Box 12 retirement codes to check whether you contributed too much. If your combined deferrals across all plans go over the annual limit ($24,500 for most plans in 2026, $17,000 for SIMPLE IRAs), you have until April 15 of the following year to withdraw the excess along with any earnings on it.¹²

Miss that deadline and the excess gets taxed twice: once in the year you contributed it, and again when you eventually take a distribution. Late corrective distributions can also trigger the 10% early withdrawal penalty and 20% mandatory withholding.¹³ This trips up people who changed jobs during the year and deferred into two different plans, since neither employer knows what the other withheld.

If Box 12 Is Wrong

Errors happen. An employer may pick the wrong code, report the wrong amount, or omit a code entirely. When the IRS matches its copy of your W-2 against your return and finds a mismatch, it can send a CP2000 notice proposing changes and adding interest from the original filing deadline.¹⁴

Start with your employer’s payroll department and ask for a corrected W-2, called Form W-2c.¹⁵ If you still don’t have a corrected form by the end of February, call the IRS for help. As a last resort, file using Form 4852 as a substitute W-2, estimating the correct amounts from your pay stubs and explaining how you got them.¹⁶ Filing with known Box 12 errors is worse than waiting a little longer for accurate numbers.

1
Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3
2
Internal Revenue Service. Retirement Topics – 401(k) and Profit-Sharing Plan Contribution Limits
3
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
4
Internal Revenue Service. Common Errors on Form W-2 Codes for Retirement Plans
5
Internal Revenue Service. Retirement Topics – SIMPLE IRA Contribution Limits
6
Internal Revenue Service. Expanded Availability of Health Savings Accounts under the One, Big, Beautiful Bill Act (OBBBA)
7
Internal Revenue Service. Form W-2 Reporting of Employer-Sponsored Health Coverage
8
Office of the Law Revision Counsel. 26 USC 79 – Group-Term Life Insurance Purchased for Employees
9
IRS.gov. Group Term Life Insurance
10
Internal Revenue Service. Guidance on the Application of Section 83(i)
11
Internal Revenue Service. Form 8839 – Qualified Adoption Expenses
12
Internal Revenue Service. Consequences to a Participant Who Makes Excess Deferrals to a 401(k) Plan
13
Internal Revenue Service. 401(k) Plan Fix-It Guide – Elective Deferrals Exceeded Limits
14
Internal Revenue Service. Topic No. 652, Notice of Underreported Income – CP2000
15
Internal Revenue Service. About Form W-2 C, Corrected Wage and Tax Statements
16
Internal Revenue Service. Form 4852 – Substitute for Form W-2