W-2 box 12 code DD.

What code DD means

IRS description: Code DD: Cost of employer-sponsored health coverage. Use this code to report the cost of employer-sponsored health coverage. The amount reported with code DD is not taxable.

The Affordable Care Act requires employers who provide applicable employer-sponsored coverage to report its cost on the W-2 so employees can see what their coverage costs. The IRS stresses that reporting the cost "does not mean that the coverage is taxable." The value of the employer's excludable contribution stays excludable. The figure is informational, which is why it never feeds into your income.

In general the amount includes both the portion paid by the employer and the portion paid by the employee, which is why it looks far larger than your pay stub deduction. A family plan costing $14,210 a year in total might take only $4,680 from your pay. The IRS chart for employers sorts coverage into three groups. Reported: major medical, pre-tax or employer-paid hospital indemnity, health FSA value above your salary reductions, and domestic partner coverage included in income. Not reported: HSA contributions, a health FSA funded only by salary reduction, Archer MSAs, accident or disability income, long-term care and workers' compensation. Optional under transition relief: stand-alone dental or vision, HRA contributions and multi-employer plans.

Some employers do not have to report it at all. The IRS lists employers that were required to file fewer than 250 Forms W-2 for the preceding year as optional reporters, so a blank DD can be normal.

Where code DD shows up on your W-2 and return

• Box 1, 3 and 5: unaffected. The code DD amount is not added to wages and does not change taxable pay.
• Form 1040: nothing to enter. The IRS says the amount is not taxable.
• Other codes: HSA money is code W, not DD. The IRS chart says HSA contributions are not reported in code DD.

Worked example

Code DD shows 14210.00 and you pay $180 per biweekly paycheck. Your payroll premiums are $180 × 26 = $4,680 for the year. The employer's part is about $14,210 − $4,680 = $9,530. Per month, the total plan cost is about $1,184. None of the $14,210 is added to your taxable pay, so box 1 is not affected. If your stub deduction includes dental or an FSA, your own share may differ from the plan's.

Limits and what to check

There is no limit to check for code DD. The things worth checking are whether the number is plausible for your plan, whether you were covered the whole year, and whether the employer was required to report at all. The IRS chart treats reporting as optional for employers filing fewer than 250 Forms W-2 and for some plan types. If you changed plans mid-year, DD reflects the whole year. If it looks wrong, ask payroll rather than filing anything: since the amount is informational, an error does not change your tax.

Common mistakes

• Adding DD to income. The IRS says it is not taxable.
• Comparing DD to your pay stub deduction and thinking the employer overcharged you. DD includes the employer's share.
• Looking for DD to show HSA money. HSA contributions are code W.
• Assuming a missing DD is an error. Smaller employers and some plan types are optional reporters.

See every code in one searchable table on the W-2 box 12 codes lookup.

Sources

Primary sources opened on November 1, 2026. The plain-English parts of this page are our summary of them, not IRS guidance.

• IRS, General Instructions for Forms W-2 and W-3 (2026), Box 12, Codes (read 2026-11-01): code DD definition and the not-taxable statement
• IRS, Form W-2 reporting of employer-sponsored health coverage (read 2026-11-01): what is included in DD, the employee and employer share, transition relief and the 250-W-2 exception