Updated September 29, 2026. Quick answer: code Y in Box 12 shows amounts you deferred during the year under a nonqualified deferred compensation plan subject to section 409A. The IRS says employers are not required to show these deferrals, so many W-2s have no code Y at all.
What the IRS tells the employer
The instructions define code Y as “Deferrals under a section 409A nonqualified deferred compensation plan.” and say: “It is not necessary to show deferrals in box 12 with code Y.”
If the employer does report it
“However, if you report these deferrals, show current-year deferrals, including earnings during the year on current-year and prior-year deferrals.”
Why a missing code Y is not a red flag
The special-situations section repeats it: “It is not necessary to show amounts deferred during the year under an NQDC plan subject to section 409A.” Amounts that fail the 409A rules are reported differently, under code Z.
Common mistakes
- Concluding your deferral was not recorded because code Y is missing. The IRS says reporting it is optional for the employer.
- Mixing up Y and Z. Y is deferrals, Z is income from a plan that fails 409A.
Related: code Z, code G, and why a 409A distribution election is irrevocable.
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.
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.