If an employer could not collect all the Social Security tax, Medicare tax, or Railroad Retirement tax on either tips or the taxable cost of group term life insurance, the uncollected taxes will be shown in Box 12 of Form W-2 with codes A, B, M, or N as follows:
- Code A – Uncollected Social Security or RRTA tax on tips.
- Code B – Uncollected Medicare tax on tips.
- Code M – Uncollected Social Security or RRTA tax on the taxable cost of group-term life insurance over $50,000 (former employees only).
- Code N – Uncollected Medicare tax on the taxable cost of group-term life insurance over $50,000 (former employees only).
When entered correctly on the W-2 entry window, these amounts will be designated with the code UT on Line 8c of Schedule 2 (Line 62 of Schedule 4 in tax year 2018, and Form 1040 Line 62 for tax years 2017 and prior).
Additional Information:
Instructions for Forms W-2 and W-3, Wage and Tax Statement