Updated September 29, 2026. Quick answer: code W in Box 12 is the total your employer put into your health savings account, including money you chose to contribute through a cafeteria plan. It is normally not taxed as wages, but it does count against your HSA limit.
What the IRS tells the employer
The instructions define code W as “Employer contributions to a health savings account (HSA).” and say: “Show any employer contributions (including amounts the employee elected to contribute using a section 125 (cafeteria) plan) to an HSA.”
Why it is usually not in your wages
The HSA section says: “You must report all employer contributions (including an employee’s contributions through a cafeteria plan) to an HSA in box 12 of Form W-2 with code W.” It also says such contributions are not subject to income tax withholding or social security and Medicare taxes “if it is reasonable to believe at the time of the payment that the contribution will be excludable from the employee’s income.”
When it is also in Boxes 1, 3 and 5
“Employer contributions to an HSA that are not excludable from the income of the employee must also be reported in boxes 1, 3, and 5.” Contributions you made yourself outside a cafeteria plan are different: “An employee’s contributions to an HSA (unless made through a cafeteria plan) are includible in income as wages”, deductible on your own return. Current-year limits are on the HSA limits page.
Common mistakes
- Forgetting that code W already includes what you elected through the cafeteria plan, then adding it to your own contributions a second time.
- Treating code W as taxable wages. It is excluded from Boxes 1, 3 and 5 unless it was not excludable.
Related: code DD, code D, and the HSA contribution limits.
Every code in one place: the Box 12 codes table. If a withdrawal from one of these accounts is your question, see the Form 1099-R Box 7 codes.
Figures verified against the IRS 2026 General Instructions for Forms W-2 and W-3 (Box 12 and special reporting sections) on September 30, 2026, except that the HSA contribution limit statement was not re-checked.
Sources
- IRS, 2026 General Instructions for Forms W-2 and W-3: https://www.irs.gov/pub/irs-pdf/iw2w3.pdf
- IRS, About Form W-2, Wage and Tax Statement: https://www.irs.gov/forms-pubs/about-form-w-2
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How our partner relationships workCode meanings are read from the IRS 2026 General Instructions for Forms W-2 and W-3 (Box 12) at irs.gov on September 29, 2026. General information, not tax advice. Your own facts decide the outcome, and a payroll professional, a preparer or the IRS is the right place to confirm anything consequential.