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 in the W-2 entry window, these amounts will carry to Schedule 2.
Additional Information:
Instructions for Forms W-2 and W-3, Wage and Tax Statement
