W-2 Box 12 Codes (DD, D, W, AA)
Box 12 of your W-2 uses letter codes (A through II) to report specific types of pay, benefits, and tax items that do not fit anywhere else on the form.
Each code means something different: Code D is your 401(k), Code DD is the cost of your health coverage, Code W is your HSA, and so on. Some codes lower your taxable income, some add to it, and several are there purely for the IRS's records.
Enter one wrong and you could overpay, underpay, or trigger an IRS notice. Below is what every W-2 Box 12 code means, which ones actually affect your taxes, and the new codes the IRS added for the 2026 tax year.
What Is Box 12 on a W-2?
Box 12 is the catch-all section of your W-2 that reports certain compensation and benefits using a letter code paired with a dollar amount. It sits on the right side of the form and is split into four slots: 12a, 12b, 12c, and 12d. Those slot labels mean nothing on their own. They just give your employer four lines to list up to four codes.
Each entry is a single or double letter (like D, DD, or W) followed by an amount. The code tells the IRS what the money is. The same total taxable wages show up in Box 1, but Box 12 breaks down how that figure was calculated.
If you are a small business owner who needs to issue one of these forms, our W-2 form maker lets you create an accurate form with the correct Box 12 codes in minutes.
Full W-2 Box 12 Codes List
Here is the complete list of Box 12 codes and what each one means. Note that the letters I, O, U, and X are skipped, so the codes are not strictly alphabetical.
| Code | What it reports | Tax impact |
|---|---|---|
| A | Uncollected Social Security or RRTA tax on tips | Added to your tax |
| B | Uncollected Medicare tax on tips | Added to your tax |
| C | Taxable cost of group-term life insurance over $50,000 | Already in Box 1 (taxable) |
| D | Elective deferrals to a 401(k) plan | Pre-tax, lowers Box 1 |
| E | Elective deferrals to a 403(b) plan | Pre-tax, lowers Box 1 |
| F | Elective deferrals to a 408(k)(6) SEP plan | Pre-tax, lowers Box 1 |
| G | Deferrals and employer contributions to a 457(b) plan | Pre-tax, lowers Box 1 |
| H | Elective deferrals to a 501(c)(18)(D) plan | Pre-tax, lowers Box 1 |
| J | Nontaxable sick pay | Informational only |
| K | 20% excise tax on excess golden parachute payments | Added to your tax |
| L | Substantiated employee business expense reimbursements | Nontaxable portion |
| M | Uncollected Social Security or RRTA tax on group-term life over $50,000 (former employees) | Added to your tax |
| N | Uncollected Medicare tax on group-term life over $50,000 (former employees) | Added to your tax |
| P | Excludable moving expense reimbursements paid to Armed Forces members | Nontaxable |
| Q | Nontaxable combat pay | Informational (may affect EITC) |
| R | Employer contributions to an Archer MSA | Informational |
| S | Salary reduction contributions to a 408(p) SIMPLE plan | Pre-tax, lowers Box 1 |
| T | Employer-provided adoption benefits | Complete Form 8839 |
| V | Income from exercise of nonstatutory stock options | Already in Box 1 (taxable) |
| W | Employer and pre-tax employee HSA contributions | Excluded; use Form 8889 |
| Y | Deferrals under a 409A nonqualified deferred comp plan | Informational |
| Z | Income under a 409A plan that fails the rules | Taxable, plus a 20% extra tax |
| AA | Designated Roth contributions to a 401(k) plan | After-tax (already in Box 1) |
| BB | Designated Roth contributions to a 403(b) plan | After-tax (already in Box 1) |
| DD | Cost of employer-sponsored health coverage | Informational only |
| EE | Designated Roth contributions to a governmental 457(b) plan | After-tax (already in Box 1) |
| FF | Permitted benefits under a QSEHRA | Informational |
| GG | Income from qualified equity grants under Section 83(i) | Taxable |
| HH | Aggregate deferrals under Section 83(i) elections | Informational |
| II | Medicaid waiver payments excluded from gross income (Notice 2014-7) | Excluded from income |
The Most Common Box 12 Codes Explained
Most people only ever see a handful of these codes. Here are the ones that show up most often and what they mean for your return.
Code DD: Cost of Employer-Sponsored Health Coverage
Code DD shows the total cost of your employer-sponsored health plan, counting both your share and your employer's share. It is one of the most misunderstood entries on the form. This amount is informational only and does not change your taxes or your refund in any way.
You still enter it in your tax software if it appears, but it will not increase or decrease what you owe. It exists so the IRS can track the value of employer health coverage.
Code D: 401(k) Contributions
Code D reports the money you deferred into a traditional 401(k) through payroll. These are pre-tax contributions, so they are already subtracted from the wages in Box 1. That lowers your taxable income for the year.
For 2025, elective deferrals were capped at $23,500. For 2026 the limit rises to $24,500, with extra catch-up contributions allowed if you are age 50 or older.
Code W: Health Savings Account (HSA)
Code W covers contributions made to your HSA through your employer, including any pre-tax amount you funded through a cafeteria plan. This money is excluded from your taxable wages. You report it on Form 8889 when you file.
One common mistake: if your tax software asks for HSA contributions "you made personally," do not re-enter the Code W amount there. That figure already came through your W-2.
Code AA: Roth 401(k) Contributions
Code AA reports designated Roth contributions to a 401(k). Unlike Code D, these are made after tax, so they do not lower your Box 1 wages. The trade-off is that qualified withdrawals in retirement come out tax-free.
Code C: Group-Term Life Insurance Over $50,000
Code C is the taxable value of employer-paid life insurance coverage above $50,000. This amount is already included in Boxes 1, 3, and 5, so it has been added to your taxable wages. It often explains why Box 1 looks higher than you expected.
Code V: Nonstatutory Stock Options
Code V reports income from exercising nonqualified (nonstatutory) stock options. This amount is already in your Box 1 wages and is taxable. If you have equity compensation, it is worth double-checking this figure against your brokerage records.
New Box 12 Codes for Tax Year 2026: TA, TP, and TT
The IRS finalized three new Box 12 codes for the 2026 tax year, tied to the One Big Beautiful Bill Act. These appear on the W-2 you will receive in January 2027, not on your 2025 form.
| Code | What it reports | Why it matters |
|---|---|---|
| TA | Employer contributions to a Trump account under a Section 128 program | Excluded from your income, within annual limits |
| TP | Total cash tips reported to the employer | Supports the new tip deduction (up to $25,000) |
| TT | Total qualified overtime compensation | Supports the new overtime deduction (up to $12,500, or $25,000 joint) |
Here is the catch for your 2025 return. The IRS granted transition relief, so employers were not required to report tips or overtime separately on 2025 W-2s. That means most 2025 forms will not show codes TP or TT at all.
If you earned qualifying tips or overtime in 2025 and want to claim those new deductions, you will need to pull the figures from your final pay stub or a statement from your employer. If you no longer have that record, our pay stub generator can help you rebuild accurate year-to-date totals for your own records.
Which Box 12 Codes Are Taxable vs. Informational?
Not every code affects your tax bill. It helps to sort them into three buckets.
- Lower your taxable income: Pre-tax retirement deferrals (Codes D, E, F, G, H, S) and HSA contributions (Code W). These are already subtracted from Box 1.
- Add to your taxable income or tax: Group-term life over $50,000 (Code C), stock option income (Code V), uncollected taxes (Codes A, B, M, N), and noncompliant deferred comp (Codes K, Z).
- Informational only: Health coverage cost (Code DD), nontaxable sick pay (Code J), and QSEHRA benefits (Code FF). These do not change your refund.
Roth codes (AA, BB, EE) are a special case. They are after-tax, so they do not reduce Box 1, but they are reported to track your retirement contributions.
How to Enter Box 12 Codes on Your Tax Return
Enter each code exactly as it appears on your W-2, matched with its dollar amount. Most tax software has a dedicated Box 12 section with a drop-down for the code letter and a field for the amount. Type the code in capital letters, since lowercase entries can cause an e-file error.
If a Box 12 line is blank on your form, leave it blank. You do not need to invent an entry. Do not combine two codes onto one line either. Each code gets its own slot.
What to Do If a Box 12 Code Looks Wrong
If an amount looks off, first reconcile it against the year-to-date totals on your final pay stub. A mismatch in Box 1 is often explained by a pre-tax deduction or a Code C life insurance add-on, not an actual error.
If you confirm a genuine mistake, contact your employer's payroll department and ask for a corrected form, called a W-2c. Do not change the numbers yourself. Filing with figures that do not match what your employer sent the IRS is a common cause of return delays.
For a quick refresher on reading the rest of the form, the team at Real Check Stubs has guides on every W-2 box.
Frequently Asked Questions
What is Box 12 on a W-2?
Box 12 reports specific types of compensation, benefits, and tax items using letter codes (A through II) paired with dollar amounts. It breaks down details that are not captured in your regular wage boxes, such as 401(k) contributions, HSA funding, and the cost of employer health coverage. Some entries lower your taxes, some raise them, and many are informational only.
What does code DD in Box 12 mean?
Code DD is the total cost of your employer-sponsored health coverage, including both your contributions and your employer's. It is reported for informational purposes only and does not affect your taxable income or your refund. You should still enter it in your tax software if it appears on your form.
Is Box 12 DD required on a W-2?
Employers that filed 250 or more W-2s in the prior year are required to report the cost of health coverage with code DD. Smaller employers may report it voluntarily but are not penalized for leaving it off. Either way, the amount never changes what you owe.
What is the difference between code D and code AA in Box 12?
Code D is a pre-tax traditional 401(k) contribution, so it lowers the taxable wages in Box 1. Code AA is an after-tax Roth 401(k) contribution, so it does not reduce Box 1. The Roth trade-off is tax-free qualified withdrawals later in retirement.
Do I have to report every Box 12 code on my taxes?
Yes, enter each code and amount shown on your W-2 exactly as printed, even the informational ones like DD. Leaving out a code that affects taxable income (such as A, C, or V) can lead to an inaccurate return. Codes that are informational will not change your refund, but they should still be entered.
Allen Wood is an accomplished accountant with over 15 years of experience in the field.
