What type of contributions are indicated by W-2 Box 12 Code W?

The contributions indicated by W-2 Box 12 Code W refer specifically to Health Savings Account (HSA) contributions. This code is used to report employer contributions made to an employee's HSA, as well as any contributions made by the employee that are deducted from their pay.

HSAs are tax-advantaged accounts designed for individuals with high-deductible health plans, allowing them to save money for medical expenses. Contributions to HSAs can be made pre-tax, which reduces taxable income. Therefore, when you see Code W on a W-2, it signifies those contributions specifically intended for health savings accounts.

This distinguishes it from other types of contributions. For instance, retirement plan contributions are typically indicated by different codes, such as Code D for 401(k) contributions. Employer contributions to a SIMPLE plan would be reflected differently on the W-2 as well, notably under different codes for retirement plan contributions. Nontaxable combat pay would also be indicated by a different code to reflect that specific situation. Thus, understanding the specific meaning of Code W helps in accurately reporting and realizing benefits tied to health savings account contributions.