Have you ever stared at your W-2 form and wondered what those cryptic codes in Box 14 mean? You’re not alone. Box 14 is a secret language employers use to report critical details about your pay and benefits – information that could save you hundreds at tax time or prevent costly IRS headaches. Let’s decode this section together and turn confusion into clarity.

In this updated 2025 guide, you’ll learn:

What W-2 Box 14 codes are and why they’re more important than ever
Common and military-specific codes with their hidden meanings
How these codes impact both federal and state taxes (with real examples)
Proven strategies to handle Box 14 like a tax expert
Critical mistakes that could trigger audits

What is box 14 on W-2?

Box 14 on IRS Form W-2 is a flexible, employer-defined field for reporting tax-related items that don’t fit elsewhere. Unlike other boxes with strict IRS guidelines, Box 14 acts as a “catch-all” for miscellaneous compensation data, often including:

Non-wage compensation: Union dues, educational reimbursements, or health benefits
State-specific withholdings: Disability insurance (e.g., “CASDI” for California), Paid Family Leave (“PFL”), or unemployment contributions
Retirement and health contributions: Roth 401(k), HSA, or transit benefits
Special deductions: For 2025, this may include the premium portion of qualified overtime pay eligible for a federal income tax deduction under the new OBBBA provision.

Key Insight: While the IRS doesn’t require Box 14 entries, they’re essential for understanding your true tax liability and uncovering potential deductions

Why W-2 box 14 codes are your secret tax weapon

W-2 Box 14 codes aren’t just random abbreviations. They can reveal hidden tax savings or liabilities. For example:

Tax-free benefits: Employer contributions to an HSA (code “RR”) aren’t taxable, lowering your adjusted gross income
Major new deduction: For 2025, a code like “FLSA OT Prem” or “OT-NT” can identify the premium portion of overtime pay that is eligible for a federal income tax deduction, potentially saving you thousands.
Taxable perks: The cost of life insurance over $50,000 (code “C”) adds to your taxable income .
State tax nuances: Codes like “NYSDI” (New York disability insurance) affect state filings but not federal taxes .
Audit protection: Proper reporting creates a paper trail for IRS inquiries

Ignoring W-2 Box 14 codes could mean missing deductions or accidentally underreporting income.

Common W-2 box 14 codes and their hidden meanings

Here’s the most comprehensive Box 14 code list available, expanded with military and state-specific entries:

Code	Description	Tax impact	State-specific?	Action required
FLSA OT Prem / OT-NT	Premium Portion of Overtime (OBBBA Deduction)	Deductible from Fed Income Tax (Limits Apply)		Claim as an adjustment on Schedule 1-A (Form 1040)
PFL	Paid Family Leave (CA, NY, NJ)	Deductible on state returns	✓	Claim state deduction
VPDI	Voluntary Plan Disability Insurance (CA)	Reduces state taxable income	✓	Include on state return
E	Military TSP Contributions	Tax-exempt		None for federal
H	Home-to-Work Transportation Benefits	Taxable (included in Box 1)		Verify income reporting
S125	Cafeteria Plan (FSA/HSA)	Lowers taxable income		Report pre-tax contributions
IMP	Imputed Income (e.g., domestic partner benefits)	Taxable		Add to income
CASDI	CA State Disability Insurance	Deductible on CA returns	✓	Claim state deduction
UA	Uniform Allowances/Union Dues	Potentially deductible		Itemize if eligible
T	COLA (Puerto Rico wages)	Non-taxable	✓	Exclude from income
DD	Employer Health Coverage Cost	Informational only		None

Pro Tip: Always ask HR for a code key – employers create custom abbreviations. For the 2025 overtime deduction, look for codes like “FLSA OT Prem,” “OT-NT,” “OT Deduct,” or similar.

How W-2 box 14 codes affect your tax return

Not all box 14 on W-2 entries require action, but some impact your tax forms:

Retirement contributions (AA, BB, CC):
- Roth contributions (AA) don’t reduce taxable income but help with future tax-free withdrawals.
- Pre-tax contributions (BB) lower your taxable wages immediately.
- Report these on Form 1040 if you qualify for retirement savings credits.
Health benefits (S125, DD):
- Pre-tax FSA or HSA contributions (S125) lower your taxable wages.
- The Affordable Care Act requires employers to report health coverage costs (code DD), but this amount isn’t taxable
2025 overtime deduction:
- The premium portion of qualified FLSA overtime (e.g., code FLSA OT Prem or OT-NT) is reported for your reference. You claim this as a deduction on your tax return, not as an exclusion from Box 1 wages.
- The amount is subject to limits (up to $12,500 single / $25,000 MFJ) and phases out for higher earners. Social Security and Medicare taxes still apply to all overtime pay.
Golden parachute payments (K):
- Excess severance pay triggers a 20% excise tax. Report this on Schedule 2 (Form 1040) .

State-specific codes (CASDI, NYSDI):
- These affect state returns. For example, “CASDI” premiums are deductible on California returns .

5 steps to handle W-2 box 14 codes like a tax pro

Review and decode
- Cross-reference codes with your employer’s guide or the IRS instructions. If you’re unsure, refer to a W-2 box 14 codes list for clarity.
- Example: Code “UA” could mean uniform allowances (tax-free if work-specific) or union fees (deductible if itemizing).
- Key 2025 action: If you worked overtime, look for a Box 14 code like “FLSA OT Prem” or “OT-NT” indicating the deductible premium amount. If not in Box 14, check your final pay stub or a separate employer statement.
Update your tax forms
- Add taxable items (e.g., code “C”) to your income.
- Claim deductions for eligible expenses (e.g., union dues pre-2018).
- Key 2025 action: Report the eligible overtime premium amount from Box 14 as an adjustment to income on Schedule 1 (Form 1040), following the applicable limits.
Check for errors
- Compare Box 14 entries to your pay stubs. If numbers don’t match, request a corrected W-2c from your employer.
- Crucially, note that the overtime premium amount for the 2025 deduction is for your reference to claim a deduction. Your total overtime pay (including the premium) should still be included in your Box 1 and Box 3/5 wages for income and FICA taxes.
Understand state impacts
- Research how codes like “NYSDI” affect your state return. California’s EDD website, for example, explains “CASDI” deductions.
- Note: The 2025 federal overtime deduction may not apply to state income taxes. Check your state’s rules.
Ask for help when needed
- Contact HR for unclear codes.
- Consult a tax professional for complex cases, like golden parachute taxes.

Mistakes to avoid with W-2 box 14 codes

Assuming all entries are taxable: Code “DD” (health coverage) is informational, not income.
Overlooking the new overtime code: Missing entries like “FLSA OT Prem” or “OT-NT” means missing a valuable 2025 deduction.
Misunderstanding the tax impact: The overtime premium is a deduction you claim, not an exclusion. FICA taxes were still withheld from it.
Overlooking state-specific codes: “NYSDI” affects New York returns but not federal taxes .
Missing deadlines: If your W-2 has errors, request a corrected W-2c by February 28 .

Real-life example: How W-2 box 14 codes saved $$$$$

Sarah, a teacher in California, noticed code “CASDI” on her W-2 box 14. After reviewing a W-2 box 14 codes list, she learned these premiums were state deductible employee expenses tied to California’s disability insurance. Using guidance from the California EDD she deducted the $500 in state taxes.

Mike, a construction foreman, worked significant overtime in 2025. His W-2 showed code “OT-NT: $8,200” in Box 14. He confirmed this was the total premium portion (the “half-time” pay) of his FLSA overtime. When filing, Mike claimed this as an adjustment to income on his federal return. With a 22% marginal tax rate, this deduction saved him $1,804 in federal income tax. He noted this amount was still subject to Social Security and Medicare taxes.

Lesson: Unfamiliar Box 14 codes often link to state deductions, credits, or new federal tax provisions like the 2025 overtime deduction – don’t skip the research!

Final thoughts: Unlock the secrets of box 14 on your W-2

W-2 Box 14 codes might seem like a puzzle, but they’re a goldmine of tax insights. Whether it’s retirement contributions, health benefits, or state taxes, understanding these codes ensures you file accurately and maximize savings.

Next Steps:

Compare Box 14 entries to your pay stubs for consistency.
For 2025, if overtime is not separately reported on your W-2 (such as in Box 14), you can use your last paycheck, pay stubs, or other employer-provided records to calculate the total qualified overtime compensation.
Save this guide for future reference (taxes are always around the corner).

Remember, when in doubt, a tax pro can turn confusion into confidence.

W-2 Box 14 Codes List | Discover Hidden Tax Secrets