Form W-2 can appear overwhelming, particularly Box 12 with its long list of technical codes. As an employer, it is up to you to furnish accurate information with the correct presentation. Start with an understanding of what the codes represent.
updated November 28, 2023 · 3min read
Form W-2, Wage and Tax Statement, is a year-end tax document that employers must file. A W-2 reports wage and salary information and taxes withheld. Employees use information from the Form W2 to complete their federal and state tax returns.
As a small business owner, you are responsible for providing employees with a timely W-2, as well as furnishing a copy to the Internal Revenue Service. Although the concept is simple, a W-2 has many different boxes and codes, and it is important that you understand what you are required to report in each field.
Box 12 is a general catch-all for recording various types of income. Box 12 consists of four sections, 12a-12d. These are just references to organize the space and don't have any significant meaning.
W2 Box 12 uses codes A through HH to identify a variety of employee benefits that must be reported to the IRS. Some of these figures are taxable amounts that are also included in total income elsewhere on the W-2, while some represent non-taxable amounts for informational purposes only.
Below is a handy reference guide for what the codes in Box 12 represent. Note that although the codes appear in alphabetical order, some letters are unused and do not appear in the listing. For more detailed explanations, reference the IRS Instructions to Form W-2.
Although there are many codes available, keep in mind that most employees won't use the majority of them, if any. The IRS provides detailed instructions, and there are many reputable software programs that can walk you through the intricacies of preparing your W-2s in an accurate and timely fashion.
by Naomi Levenspil
A CPA by trade, but a writer at heart, Naomi Levenspil jumps at the chance to exercise the right side of her brain. W...
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