The first space is to write a specific code and the second is to write the amount. If an employer needs to use more than four lines, a separate Form W-2 must be used. Subsequent forms may contain more than four lines though. Box 12 is one of several columns in Form W-2 to record different types of information about the taxes and salaries of an employee. TaxBandits makes W-2 filing effortless, with detailed instructions for each box, guiding you through the process. Our internal audit checks automatically identify any errors to ensure accurate Form W-2 filing with the SSA.
Join millions of self-starters in getting business resources, tips, and inspiring stories in your inbox. It’s no problem if your W-2 doesn’t what is box 12a have a control number. This is a number mainly used by payroll departments to track employees’ unique Form W-2s in their system. The control number on a W-2 identifies each employee’s unique Form W-2 in the employer’s records. This number is assigned by the payroll processing software of the company.
How to file Form W-2 for the 2024 Tax Year?
This should be the same as shown on your Forms 941, 941-SS, 943, 944, CT-1, or Schedule H (Form 1040). Include the suite, room, or other unit number after the street address. If the post office does not deliver mail to the street address and you use a P.O. Two Forms W-2 were filed under the same EIN, but only one should have been filed. To correct an incorrect tax year and/or EIN on a previously submitted Form W-2 or Form W-3, you must prepare two sets of Forms W-2c and W-3c.
Understand the implications of each code on your overall tax situation, especially those codes in box 12 that are subject to an additional 20% scrutiny. If there’s confusion or uncertainty, consult a tax professional. Timely and accurate filing of these codes ensures compliance with tax laws and can lead to more favorable tax outcomes.
You must file a separate Form W-3 to transmit the Forms W-2 if you have employees covered under the Federal Insurance Contributions Act (FICA) (social security and Medicare) and the Railroad Retirement Tax Act (RRTA). On Form W-2, no amount should be reported in box 3 or 5. In most cases, you do not need to withhold federal income tax from compensation paid to H-2A visa agricultural workers.
Medicare govt. emp.
The amount reported in box 12 using code Z is also reported in box 1 and is subject to an additional tax reported on the employee’s Form 1040 or 1040-SR. See Nonqualified deferred compensation plans under Special Reporting Situations for Form W-2. Include this amount in boxes 1, 3 (up to the social security wage base), and 5. If you are a railroad employer, do not include this amount in box 14 for railroad employees covered by RRTA.
P – Excludable moving expense reimbursements paid directly to a member of the US Armed Forces. D – Elective deferrals to a 401(k) or SIMPLE 401(k) plan. C – Taxable cost of group-term life insurance over $50,000.
Form W-2 is the wages and tax statement for an employee provided by the employer. Each employer is legally bound to provide the details of wages, salaries, and benefits paid to the employee. Box 12 is used to report additional information on non-taxable amounts using different tax codes. Form W-2 represents the statement of wages and taxes of an employee. Employers need to complete this form and hand over a copy to each employee. Tax season often brings a flurry of paperwork, and one document that demands close attention is the W-2 form.
Code E—Elective deferrals under a section 403(b) salary reduction agreement.
On a W-2 form, Box 12c with the code DD represents the cost of employer-sponsored health coverage. This amount includes both the portion paid by the employer and the portion paid by the employee. The amount in box 12 can be any of the employee benefits, reimbursements, and other income declarations based on the stipulations of the various codes that can be used to report information to the IRS.
Code R—Employer contributions to an Archer MSA.
If the total is at least 10 returns, you must e-file them all. Failure to file and failure to furnish penalties, and penalties for intentional disregard of filing and payee statement requirements, have increased due to adjustments for inflation. The higher penalty amounts apply to returns required to be filed after December 31, 2025. It’s important to note that these codes are incomplete, and other codes may appear in Box 12a depending on the employer and the employee’s specific compensation and benefits. Additionally, the amounts reported in these codes may vary depending on the employee’s circumstances. Filing your taxes can feel overwhelming, but understanding the W-2 Box 12 codes is a crucial step in getting it right.
Can Employers Report Multiple Codes in Box 12 for a Single Employee?
- Check this box if you are a railroad employer sending Forms W-2 for employees covered under the RRTA.
- The employee will deduct the amount on theirForm 1040 or 1040-SR.
- 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.
- While it is relatively straightforward, one part that may often confuse filers is Box 12 of Form W-2.
The SSA will notify the employer by email or postal mail to correct and resubmit reports from the information provided on Form W-3. If you do not have an EIN when filing your Form W-3, enter “Applied For” in box e, not your social security number (SSN), and see Box b—Employer identification number (EIN) . Check this box if you are a non-governmental tax-exempt section 501(c) organization. The “Third-party sick pay” indicator box does not designate a separate kind of payer. The employee will deduct the amount on theirForm 1040 or 1040-SR.
Failure to file correct information returns by the due date. Effective for tax years 2018 through 2025, the exclusion for qualified moving expense reimbursements applies only to members of the U.S. Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station. All other employees have only nonqualified moving expenses and expense reimbursements subject to tax and withholding.
You may file a separate Form W-3c, with Forms W-2c, for each establishment or you may use a single Form W-3c for all Forms W-2c. Show the number of individual Forms W-2c filed with this Form W-3c or enter “-0-” if you are correcting only a previously filed Form W-3 or Form W-3SS. Check this box if you are a non-governmental tax-exempt 501(c) organization.
For instance, it is used to record employer-sponsored health coverage and 401(k) contributions made by the employer. To report employees’ wage statements on Form W-2, you must be familiar with each line and box for accurate and error-free filing. While it is relatively straightforward, one part that may often confuse filers is Box 12 of Form W-2. Accurately reporting Box 12 information is essential for tax compliance.
These small alphabet lines are only labels for these four lines and do not represent any specific code or type of information. An employer can record up to four lines on one W-2 Form box 12 at a time. For example, uncollected Social Security tax on tips, indicated by Code A, must be accounted for using Form 4137. This ensures your Social Security earnings record is accurate, which can affect future benefits. Knowing the right forms and documents to claim each credit and deduction is daunting.
- If more than four items need to be reported in box 12, use a separate Form W-2 to report the additional items (but enter no more than four items on each Copy A (Form W-2)).
- Recognizing how Box 12 data translates onto Form 1040 is crucial for a holistic understanding of your tax situation.
- Do not use this code to report elective deferrals under code E.
If the H-2A visa agricultural worker furnishes a valid taxpayer identification number, report these payments in box 1 of Form W-2. If the worker does not furnish a valid taxpayer identification number, report the payments on Form 1099-MISC. If Sam’s employer made the payment after the year of death, the $3,000 would not be subject to social security and Medicare taxes and would not be shown on Form W-2. If employment ends before December 31, 2025, you may furnish copies to the employee at any time after employment ends, but no later than February 2, 2026. If an employee asks for Form W-2, give them the completed copies within 30 days of the request or within 30 days of the final wage payment, whichever is later. However, if you terminate your business, see Terminating a business .