Schedule1ADesk / 2026 Tax & Payroll Guides / W-2 Box 12 Code DD (2026): Employer-Sponsored Health Coverage Cost Explained
W-2 Box 12 Code DD (2026): Employer-Sponsored Health Coverage Cost Explained
Is W-2 Box 12 Code DD taxable or deductible on your 2026 tax return?
No. W-2 Box 12 Code DD is strictly informational under the Affordable Care Act and shows the combined employer and employee cost of group health insurance. It is not taxable and does not affect your 2026 Schedule 1-A overtime (Code TT) or tip (Code TP) deductions.
No. W-2 Box 12 Code DD is strictly informational under the Affordable Care Act and shows the combined employer and employee cost of group health insurance. It is not taxable and does not affect your 2026 Schedule 1-A overtime (Code TT) or tip (Code TP) deductions.
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2026 Form W-2 Box 12 & Schedule 1-A Reference Table
| W-2 Box / IRS Schedule | 2026 Reporting & Deduction Rule |
|---|---|
| Box 12 Code TT (New for 2026) | Qualified FLSA 0.5x Overtime Premium · Deduct up to $12,500 Single / $25,000 MFJ on Schedule 1-A Part III |
| Box 12 Code TP + Box 14b TTOC (New for 2026) | Qualified Voluntary Tips in 75 TTOC Occupations · Deduct up to $25,000 on Schedule 1-A Part II |
| Box 12 Code D / S / E / G | Pre-tax 401(k), SIMPLE IRA, 403(b), and 457(b) deferrals · Lowers MAGI to prevent Schedule 1-A phase-out |
| Box 12 Code W | Employer + Employee pre-tax HSA contributions · Excluded from Box 1 wages and lowers MAGI |
| Box 12 Code DD | Informational cost of employer-sponsored health coverage · Non-taxable |
| Form 1098-VLI (Schedule 1-A Part IV) | Up to $10,000 deduction for interest on new U.S.-assembled passenger vehicles (VIN starts with 1, 4, 5, or 7) |
| Schedule 1-A Part V (Age 65+ Bonus) | $6,000 per spouse age 65+ ($12,000 joint) · Phases out above $75,000 Single / $150,000 MFJ |
Frequently Asked Questions
Is W-2 Box 12 Code DD taxable or deductible on your 2026 tax return?
No. W-2 Box 12 Code DD is strictly informational under the Affordable Care Act and shows the combined employer and employee cost of group health insurance. It is not taxable and does not affect your 2026 Schedule 1-A overtime (Code TT) or tip (Code TP) deductions.
Do I have to itemize deductions to claim W-2 Box 12 Code TT or Code TP?
No. All four deductions on 2026 IRS Schedule 1-A (Qualified Tips, Qualified Overtime, Auto Loan Interest, and the $6,000 Senior Deduction) are above-the-line deductions available to both Standard Deduction and Itemized filers.