Box 12 on W-2

What is Box 12 on a W-2?

When tax season comes around, employees receive a W-2 form from their employer so that they can file their state and federal income tax. There are several sections on this form, including Box 12, which is where various types of employee income and benefits are shown in dollar amounts. Some of these amounts are taxable income that are included elsewhere on your W-2, while others are listed only for information purposes. 

Box 12 includes four lines: 12a, 12b, 12c, and 12d. These letters are simply included as a way to organize more than one item listed; the letters to pay attention to are those listed on the specific lines themselves. These letters are called Box 12 codes, which is what the Internal Revenue Service uses to determine what the listed amount is referring to. There are 30 W-2 Box 12 codes that may be used, ranging from A to II.

• A: Uncollected Social Security or RRTA tax on tips
• H: Elective deferrals to a section 501(c)(18)(D) tax-exempt organization plan
• K: 20% excise tax on excess golden parachute payments
• N: Uncollected Medicare tax on group-term life insurance over $50,000 (for former employees)
• W: Employer contributions to a health savings account
• Y: Deferrals under a section 409A nonqualified deferred compensation plan

Reference this list of Box 12 codes to better understand your tax return.

FAQs 

Are retirement contributions taxable?

Retirement plan contributions are taxable but at different times. For example, 401(k) retirement contributions are made pre-tax, but future withdrawals are taxed. Designated Roth contributions, on the other hand, use after-tax dollars, so there is no taxable cost on future withdrawals.

Can Box 12 be empty on W-2?

Yes, Box 12 can be empty on a W-2 if an employee didn’t have any items related to the Box 12 codes for that taxable year. For example, perhaps they didn’t make any employee salary reduction contributions, have any income from qualified equity grants or nontaxable combat pay, or participate in their employer-sponsored health coverage. 

How does Box 12 affect my taxes?

Form W-2 Box 12 shows taxable and nontaxable amounts, such as designated Roth contributions, employee business expense reimbursements, uncollected taxes on tips, adoption benefits, and much more. This section displays various types of income that may or may not affect your taxes—it just depends on the type of income included.

Do employers pay taxes on 401(k) contributions?

Employer contributions to employee 401(k) retirement plans are able to deduct those contributions on their tax returns, up to certain dollar limits. But employer 401(k) contributions don’t affect employees’ taxes and are not included on employees’ W-2 forms—only on the employer’s tax documents.