Your health insurance premiums paid will be listed in
box 12
of Form W2 with code DD. Please view the TurboTax FAQ below for more information.
What is Box 12b D on W-2?
D –
Elective deferral under a Section 401(k) cash or arrangement plan
. This includes a SIMPLE 401(k) arrangement. You may be able to claim the Saver's Credit, Form 1040 Schedule 3, line 4. See Form 1040 Instructions for details. E – Code E includes elective deferrals under a Section 403(b) salary reduction agreement.
Does Box 3 on W-2 include health insurance?
FICA Taxes
Therefore, when you get your W-2, your box 3, income subject to Social Security taxes, and box 5, income subject to Medicare taxes,
will include your pretax health insurance premiums
.
What is D and DD on my W-2?
D :
Contributions to your 401(k) plan
. DD: Cost of employer-sponsored health coverage. More info. E: Contributions to your 403(b) plan. EE: Designated Roth contributions under a governmental section 457(b) plan.
How Is the Cost of Coverage Reported?
The cost of coverage is reported by the employer on each employee's Form W-2 in Box 12 using code “DD.”
And when transmitting the Form W-2 figures to the Internal Revenue Service (IRS), the combined total is not included on the Form W-2, “Transmittal of Wage and Tax Statements.”
Premiums for company health insurance are
not tax-deductible
. Employers deduct premium payments from your paycheck on a pretax basis. Since your employee contributions are already taking advantage of tax savings, you can't deduct them again on your return.
What is D and DD in box 12?
Code DD is only information to you to tell you how much your employer spend for health coverage
– you do nothing with it. Code D is the amount of salary deferrals to a 401(k) plan. You do nothing with than either other than enter it on the W-2 screen in box 12 just like it is on the paper W-2.
The premiums are included on the Form W-2 in Box 1 (wages subject to federal withholding)
and Box 14 (other information) but are not included in Box 3 or Box 5 (wages subject to Social Security and Medicare).
Why is Box 1 and 16 different?
If retirement contributions are exempt from state income tax, Boxes 1 and 16 may be the same.
If contributions are subject to state income tax, Box 16 may be higher than Box 1
. For example, Pennsylvania requires employees to pay state income tax on retirement contributions.
What is the difference between Box 1 and Box 3 on my W-2?
Some pre-tax deductions reduce your taxable income (box 1) and your social security income (box 3). Other pre-tax deductions only reduce your taxable income (box 1).
If you have a deduction that only reduces your taxable income then the amounts in box 1 and box 3 will be different.
Most premiums are paid with pre-tax dollars, which means they are deducted from your wages before taxes are applied. Deducting them again as a medical expense would be “double-dipping.”
You can only deduct the premiums if your employer included them in box 1 (Gross Wages) of your W-2
.
What is C in box 12 on W-2?
C:
Taxable cost of group-term life insurance
. You received group-term life insurance valued at more than $50,000 from your employer. The amount is also reported in Boxes 1, 3 and 5 of your W-2 and appears in Box 12 for your information only.
Health insurance premiums can count as a tax-deductible medical expense (along with other out-of-pocket medical expenses) if you itemize your deductions
. You can only deduct medical expenses after they exceed 7.5% of your adjusted gross income.
Medical insurance premiums are deducted from your
pre-tax
pay. This means that you are paying for your medical insurance before any of the federal, state, and other taxes are deducted.
Premiums paid to private health services plans including medical, dental, and hospitalization plans.
They can be claimed as a medical expense, as long as 90% or more of the premiums paid under the plan are for eligible medical expenses
.
What is W on my W-2?
Code W in Box 12 of your W2
indicates that you have an employer-sponsored Health Savings Account and that there was money deposited into your HSA through the payroll system at work
. Code W opens up Form 8889, Health Savings Accounts, on your tax return.
What is Box 18 on my W-2?
Box 18:
Local wages
. Box 18 reports the total amount of wages subject to local, city, or other state income taxes. Often different than Box 16 and Box 1 (Federal Wages).
You'll need to review your paycheck stub to determine when you pay for health insurance. Also,
if you have pre-tax amounts withheld from your paycheck for your insurance, the amount on your W-2, Box 1 won't include the cost of your health insurance
.
