Updated September 29, 2026. Quick answer: code T in Box 12 is the total your employer paid or reimbursed under an adoption assistance program. It is not in Box 1 wages, but it is included for social security and Medicare tax in Boxes 3 and 5.
What the IRS tells the employer
The instructions read: “Show the total that you paid or reimbursed for qualified adoption expenses furnished to your employee under an adoption assistance program.” and: “Report all amounts including those in excess of the $17,670 exclusion.”
Which boxes it touches
The adoption benefits section says employer amounts “are not subject to federal income tax withholding and are not reportable in box 1.” It then adds: “However, these amounts (including adoption benefits paid from a section 125 (cafeteria) plan, but not including adoption benefits forfeited from a cafeteria plan) are subject to social security, Medicare, and railroad retirement taxes and must be reported in boxes 3 and 5.”
Why the figure can exceed the exclusion
Code T reports the whole amount, including any part above the exclusion amount the instructions state. That is a reporting rule for the employer; how much of it is excludable on your return is a separate question, and the adoption credit rules are on the adoption credit page.
Common mistakes
- Reading the code T total as taxable income. The instruction says it is not reportable in Box 1.
- Assuming a code T amount above the exclusion is an error. The instruction tells employers to report all amounts.
Related: code W, and the adoption credit.
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 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
Code 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.