Code G in Box 12 of your W-2 shows the total pre-tax money that went into a Section 457(b) deferred compensation plan for the year, counting both your own salary deferrals and any employer contributions. Because that amount was already subtracted from the taxable wages in Box 1, the tax benefit is built into your W-2 before you file. For most people, Code G is a record-keeping entry that explains why Box 1 is smaller than total pay.
What the Number Includes
Every dollar deferred into a 457(b) during the calendar year lands in Code G, whether it came out of your paycheck or from your employer.1Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3 Amounts still subject to a substantial risk of forfeiture are not reported here. The IRS uses the figure to confirm that the pre-tax exclusion in Box 1 is legitimate and that you stayed within the annual deferral ceiling.
Roth contributions to a governmental 457(b) do not show up under Code G. Those go in Box 12 under Code EE, because Roth deferrals are included in Box 1 taxable wages rather than excluded from them.1Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3 If your W-2 has both Code G and Code EE, you split contributions between traditional pre-tax and Roth inside the same plan.
How Code G Changes the Other Boxes on Your W-2
Your employer removes the 457(b) deferral from your gross pay before computing federal income tax withholding, so the Code G amount is already missing from Box 1. That is the point of the entry. It lowers your taxable wages, which in turn lowers your adjusted gross income for the year and can affect bracket placement and eligibility for income-based credits.
Payroll taxes work the other direction. A 457(b) deferral escapes income tax in the current year but still counts as wages for Social Security and Medicare.2Internal Revenue Service. Employer Contributions to 457(b) Plans The Code G amount is folded into the Social Security wages in Box 3 and the Medicare wages in Box 5. So Box 1 will be lower than Boxes 3 and 5 by roughly the Code G figure. That is expected, not an error.
Inside the plan itself, earnings grow tax-deferred. You will owe ordinary income tax on withdrawals when they come out.
What You Do With Code G When You File
Nothing, in most cases. There is no line on Form 1040 that corresponds to Code G. Your employer already applied the tax benefit by lowering Box 1, and tax software simply reads the entry to cross-check limits. This is different from Code H, which reports Section 501(c)(18)(D) contributions and does require the taxpayer to claim a deduction on the return. Code G handles itself through payroll.1Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3
The exception is an excess deferral that was not corrected in time. If you contributed more than the annual limit and the plan did not return the overage, you have to add the excess back into income for the year it was deferred.
The 2026 Limit Your Code G Number Should Fit Within
The standard 457(b) deferral limit for 2026 is $24,500.3Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living That ceiling covers combined pre-tax and Roth contributions inside the plan. If your Code G alone, or Code G plus Code EE, sits at or below that number, you are within the standard limit.
Several catch-up rules can legitimately push Code G higher:
- Age 50 or older: an extra $8,000 in a governmental 457(b), for a total of $32,500.4Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
- Ages 60 through 63: a SECURE 2.0 provision replaces the $8,000 catch-up with $11,250, allowing up to $35,750.
- Special three-year catch-up: in each of the three calendar years before your plan’s normal retirement age, you can defer up to double the standard limit, or $49,000 in 2026, subject to the actual amount of unused deferral room from prior years.5Internal Revenue Service. Issue Snapshot – Section 457(b) Plan of Governmental and Tax-Exempt Employers – Catch-Up Contributions
You cannot combine the special three-year catch-up with an age-based catch-up in the same year. Non-governmental 457(b) plans do not allow the age 50+ or 60-63 catch-ups at all.6Internal Revenue Service. Non-Governmental 457(b) Deferred Compensation Plans
One feature worth knowing when you read your Code G number: the 457(b) limit is completely separate from the 401(k) and 403(b) limit.7Internal Revenue Service. How Much Salary Can You Defer if You’re Eligible for More Than One Retirement Plan A public university employee with both a 403(b) and a governmental 457(b) can defer $24,500 into each in 2026. Seeing a large Code G number alongside a large Code E (403(b)) or Code D (401(k)) on the same W-2 is not a problem on its own.
If Code G Is Higher Than the Limit
An excess deferral has to be pulled out along with any earnings it produced. The deadline depends on plan type:8Internal Revenue Service. Issue Snapshot – 457(b) Plans – Correction of Excess Deferrals
- Governmental 457(b): the excess and allocable earnings must be distributed as soon as administratively practicable after the plan finds the problem. Delay can cost the plan its eligible status.
- Non-governmental 457(b): the excess plus earnings must be distributed by April 15 of the year following the excess. Missing that deadline turns the plan into an ineligible 457(f), which triggers immediate taxation of vested benefits.
Excesses most often arise when someone contributes to two 457(b) plans with different employers in the same year and the combined deferrals cross the individual limit. In that situation, the plan can stay eligible even if the excess is not removed, but you must include the excess in income for the year it was deferred.
Governmental Versus Non-Governmental Plans
Code G looks the same on the W-2 whether your 457(b) is governmental or non-governmental, but the money behaves very differently once it is in the plan. State and local government employees participate in governmental 457(b) plans, where assets sit in a trust protected from the employer’s creditors.9Internal Revenue Service. Comparison of Tax-Exempt 457(b) Plans and Governmental 457(b) Plans Non-governmental plans are offered by tax-exempt organizations to a select group of management or highly compensated employees, and the deferred amounts remain the employer’s property, exposed to its general creditors.
The other difference that matters at retirement is what you can do with the balance. A governmental 457(b) can be rolled to an IRA, 401(k), or 403(b) after you separate from service. A non-governmental 457(b) cannot: the only permitted transfer is to another non-governmental 457(b), and only after leaving the employer.9Internal Revenue Service. Comparison of Tax-Exempt 457(b) Plans and Governmental 457(b) Plans The Code G entry on your W-2 gives no hint of which type you have, so if you are not sure, check with your plan administrator before assuming you can consolidate the balance later.