What's in Box 12 of My W-2? A Guide Through The Tax Form Confusion - TheStreet

NEW YORK (MainStreet) — Most of the information on your W-2 is self-explanatory, but just what is reported in Boxes 12 and 14?

Here are the most common items reported in Box 12, identified by alphabetical code -

C – Employers can provide employees with up to $50,000 in group term life insurance as a tax-free employee benefit. If your employer provides coverage in excess of $50,000, you must pay tax on the value of the excess coverage. Code “C” reports this amount, which is included in the taxable wages reported in Box 1.

D, E, F, G, and S – Employee “pre-tax” contributions to various employer retirement plans. These contributions are subtracted from gross wages in determining the amount reported in Box 1.

J – The non-taxable portion of sick or temporary disability pay. Employers often must include on your W-2 payments made under a state-run disability insurance program. Part of these benefits may be taxable and are included in Box 1; part may be non-taxable, and are identified here.

M and N – If you no longer work for a company, but that company still provides you with group term life insurance coverage in excess of $50,000 as a retiree, you will receive a W-2 to report the value of the excess coverage. These codes report the uncollected employee share of Social Security and Medicare taxes on this and other similar income. Include this amount in your total tax liability on Form 1040 Line 63.

P – The non-taxable reimbursements for tax-deductible job-related moving expenses you received from your employer. These reimbursements are not included in Box 1 but must be considered when deducting moving expenses on your Form 1040.

Q – Non-taxable combat pay, which is not included in Box 1. This income can be used in the calculation of the Earned Income Credit.

W – Employer contributions, and pre-tax employee contributions made through a Section 125 cafeteria plan, to a Health Savings Account. You report this amount on Form 8889.

AA, BB, and EE – “After-tax” employee contributions to an employer Roth retirement plan. Contributions to a Roth account are not deductible, so these contributions have not been subtracted from gross wages in determining the amount in Box 1.

DD – This Code reports the cost of health insurance coverage provided by your employer. This amount is not taxable, nor is it deductible; it is for informational purposes only.

Box 14 is used to report employee state unemployment, disability, and family leave contributions; pre-tax or after-tax employee health insurance premium payments; and anything else that may be useful in preparing your Form 1040.

--Written by Robert D. Flach for MainStreet