W2 Box 12 Codes Explained: Complete Guide for 2025

These nuances in Box 12 can lead to either tax savings or liabilities, depending on the nature of the reported item. It’s a pivotal aspect of tax preparation, helping to shape one’s overall tax responsibility. Complete these boxes to correct any of the coded items shown on Forms W-2.

• Enter the total of income taxes shown on the Forms W-2 paid to the CNMI in box 17.
• Section 6051 and its regulations require you to furnish wage and tax statements to employees, the Social Security Administration, and the Internal Revenue Service.
• For example, a QSEHRA provides a permitted benefit of $3,000.
• For the savvy taxpayer, Box 12 offers clues about potential tax liabilities or savings.
• Report all amounts paid or incurred (regardless of any employee forfeitures), including those in excess of the $5,000 exclusion.

When to File a Form W-2 vs 1099 for the 2021 Tax Year

Even employers with only one household employee must file Form W-3 to transmit Copy A of Form W-2. For more information, see Schedule H (Form 1040), Household Employment Taxes, and its separate instructions. You must file Form(s) W-2 if you have one or more employees to whom you made payments (including noncash payments) what is box 12a for the employees’ services in your trade or business during 2025. 1223 prohibits advertising on Form W-2c and envelopes containing Form W-2c. You must not include advertising on any copy of Form W-2c, including coupons providing discounts on tax preparation services attached to the employee copies, or on an envelope containing any copy of Form W-2c. 1141 prohibits advertising on Form W-2 and envelopes containing Form W-2.

For details on statutory employees and common-law employees, see section 1 in Pub. Report the aggregate amount of income deferred under section 83(i) elections as of the close of the calendar year. Do not report either section 457(b) or section 457(f) amounts that are subject to a substantial risk of forfeiture. Also show deferrals under a SIMPLE retirement account that is part of a section 401(k) arrangement. Box 10—Dependent care benefits (not applicable to Forms W-2AS, W-2CM, W-2GU, or W-2VI). Box 8—Allocated tips (not applicable to Forms W-2AS, W-2CM, W-2GU, or W-2VI).

State and local income taxes may need to be withheld and remitted to state and local tax authorities. You should consult with state, local, or U.S. territory tax authorities regarding your withholding obligations under MSRRA. You must e-file Forms W-2, W-2AS, W-2GU, and W-2VI (collectively Forms W-2), but not Form W-2CM, if you are required to file at least 10 information returns. To determine whether you must file Forms W-2 electronically, add together the number of information returns (see the list below) and the number of Forms W-2 you must file in a calendar year.

Requests for an extension of time to furnish Forms W-2 to employees are not automatically granted. If approved, an extension will generally be granted for no more than 15 days from the due date, unless the need for up to a total of 30 days is clearly shown. You may furnish Forms W-2 to employees on IRS official forms or on acceptable substitute forms. Be sure the Forms W-2 you provide to employees are clear and legible and comply with the requirements in Pub. Prepare and file Forms W-2 either alphabetically by employees’ last names or numerically by employees’ social security numbers.

If the IRS grants your request for extension, you will have an additional 30 days to file. The IRS will grant extensions to file Forms W-2 only in limited cases for extraordinary circumstances or catastrophe, such as a natural disaster or fire destroying the books and records needed for filing the forms. No additional extension of time to file will be allowed. For example, if a civilian spouse is working in Guam but properly claims tax residence in one of the 50 states under MSRRA, their income from services would not be taxable income for Guam tax purposes. Federal income taxes should be withheld and remitted to the IRS.

File Form W-3c whenever you file a Form W-2c with the SSA, even if you are only filing a Form W-2c to correct an employee’s name or SSN. However, see Employee’s incorrect address on Form W-2 , later, for information on correcting an employee’s address. See Correcting an incorrect tax year and/or EIN incorrectly reported on Form W-2 or Form W-3 , later, if an error was made on a previously filed Form W-3. Show deferrals under a section 408(p) salary reduction SIMPLE retirement account.

However, if you provided your employee a vehicle, you must include the value of any personal use in boxes 1, 3, and 5 of Form W-2. You must withhold social security and Medicare tax, but you have the option not to withhold federal income tax if you notify the employee and include the value of the benefit in boxes 1, 3, 5, and 14. An employee’s contributions to an Archer MSA are includible in income as wages and are subject to federal income tax withholding and social security and Medicare taxes (or railroad retirement taxes, if applicable). Employee contributions are deductible, within limits, on the employee’s Form 1040 or 1040-SR.

Issue the employee a Form W-2c if the error discovered was for the prior year and Form W-2 was filed with the SSA. Write “CORRECTED” on the employee’s new copies (B, C, and 2), and furnish them to the employee. If the “VOID” Form W-2 is on a page with a correct Form W-2, send the entire page to the SSA. The total of Form W-2 box 12 amounts reported with codes A through C, J through R, T through W, Z, DD, and FF through II is not reported on Form W-3. Enter the totals reported in boxes 1 through 8 on the Forms W-2. If you have used an EIN (including a prior owner’s EIN) on Forms 941, 943, 944, or CT-1 submitted for 2025 that is different from the EIN reported on Form W-3 in box e, enter the other EIN used.

If the above conditions occur in a paper wage report, the SSA will notify the employer by email or postal mail to correct the report and resubmit it to the SSA. New procedure to request extension of time to furnish recipient copies of Form W-2. In addition, if you have experienced any life changes during the tax year, such as starting a new job, getting married, or having a child, seeking professional assistance is a good idea. These changes can impact how Box 12a is reported and affect your overall tax liability. A tax advisor can help you understand how these changes may impact your tax situation and provide guidance on adequately reporting them.

Retirement Contributions

Use this code to report designated Roth contributions under a governmental section 457(b) plan. Do not use this code to report elective deferrals under code G. Use this code to report designated Roth contributions under a section 403(b) plan.

• See Correcting an incorrect tax year and/or EIN incorrectly reported on Form W-2 or Form W-3 , later, if an error was made on a previously filed Form W-3.
• A copy must also be distributed to employees, without the wage information on Form W-2, they are unable to accurately file their own personal income tax returns with the IRS.
• This ensures your Social Security earnings record is accurate, which can affect future benefits.
• 517, Social Security and Other Information for Members of the Clergy and Religious Workers and section 4 in Pub.
• When there are discrepancies between amounts reported on Forms W-2 and W-3 filed with the SSA and on Forms 941, 943, 944, CT-1, or Schedule H (Form 1040) filed with the IRS, you will be contacted to resolve the discrepancies.
• Use Form W-2, boxes 3, 4, 5, 6, and 7, to report each employee’s social security and Medicare wages and taxes, including Additional Medicare Tax.

Form W-2 Box 12 codes: Instructions

However, if the address was incorrect on the Form W-2 furnished to the employee, you must do one of the following. Correcting an employee’s name and SSN if the SSN was reported as blanks or zeros and the employee name was reported as blanks. Payroll service providers, enter your client’s information for these fields. You may file a separate Form W-3, with Forms W-2, for each establishment even if they all have the same EIN; or you may use a single Form W-3 for all Forms W-2 of the same type. Check this box if you are a state or local government or instrumentality. This includes cities, townships, counties, special-purpose districts, public school districts, or other publicly owned entities with governmental authority.

What is Form W-2?

Your substitute forms must comply with the requirements in Pub. If you are not using the official IRS form to furnish Form W-2 to employees or to file with the SSA, you may use an acceptable substitute form that complies with the rules in Pub. 1141, General Rules and Specifications for Substitute Forms W-2 and W-3. 1141 is a revenue procedure that explains the requirements for format and content of substitute Forms W-2 and W-3. While it is possible to navigate Box 12a on your W2 alone, it is essential to seek professional assistance if you encounter complex situations.

Do not staple or tape Form W-3 to the related Forms W-2 or Forms W-2 to each other. If you file more than one type of employment tax form, group Forms W-2 of the same type with a separate Form W-3 for each type, and send them in separate groups. See the specific instructions for Box b—Kind of Payer and Box b—Kind of Employer in Specific Instructions for Form W-3.

Forms

If an employee returned to your employment after military service and certain make-up amounts were contributed to a pension plan for a prior year(s) under the USERRA, report the prior-year contributions separately in box 12. See Box 14—Other in Specific Instructions for Form W-2. Railroad employers must withhold social security and Medicare taxes from taxable compensation of employees covered by social security and Medicare who are exercising their employee stock options. Generally, section 409A is effective with respect to amounts deferred in tax years beginning after December 31, 2004, but deferrals made before that year may be subject to section 409A under some circumstances.