W-2 federal wages and withholding…check.

W-2 social security and Medicare wages and withholding…check.

W-2 state wages and withholding…check.

W-2 boxes 12, 13, and 14…huh?

Feel like you need a decoder ring to understand the codes for box 12 and box 14 on the W-2?

Let’s crack the codes and see which ones may apply to your employees:

Box 12 is used to record “Deferred Compensation and Other Compensation”.  The most commonly used codes are as follows:

  • Code C – taxable benefit of group term life insurance over $50,000
  • Code D – non-taxable elective salary deferrals to a 401(k) or SIMPLE 401(k) retirement plan
  • Code E – non-taxable elective salary deferrals to a 403(b) retirement plan
  • Code J – non-taxable sick pay
  • Code W – employer contributions to an employee’s health savings account (HSA)
  • Code AA – after-tax contributions to a Roth 401(k) retirement plan
  • Code BB – after-tax contributions to a Roth 403(b) retirement plan
  • Code DD – the cost of health insurance provided by the employer

As you can see from the naming conventions, the list above barely scratches the surface.  Codes range from A through EE.  For a complete list with explanations of each code, we recommend going straight to the source and refer to the General Instructions for Forms W-2 and W-3 published by the IRS (www.irs.gov/pub/irs-pdf/iw2w3.pdf). 

Box 14 is labeled “Other”.  Very descriptive, right?  Box 14 is the catch-all box that allows you to report any other information you want to give your employee.  Common uses include:

  • Uniform payments
  • Union dues
  • Employer matching contributions
  • Travel reimbursement
  • Auto allowance

Now’s the time to do your research and compile the information you’ll need to provide to your payroll provider or, if you prepare your own payroll, load into your system before the last pay of the year (since many of these items have payroll tax implications).

Next time, we’ll take a look at some year-end payroll reminders for employers who prepare their own payrolls(Year-End Payroll Reminders – If You Process Your Own Payroll).And in future posts, we’ll dig more deeply into of the Box 12 and Box 14 codes and help you determine which codes you’ll need to use for your 2012 W-2s.

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