Why am I seeing Uncollected Taxes on tips when I don't even make tips at my job?

So I'm going through my W-2 from my job at the factory and I'm completely confused about boxes 12a and 12b. I've been staring at this form for like an hour trying to figure out why these boxes have anything in them at all. 12A shows code A with some amount, and 12B has code B with another amount. The weird thing is that I work at a manufacturing plant where I definitely don't receive any tips whatsoever. My job is strictly hourly pay with some overtime here and there. I tried looking this up online but got even more confused. Something about uncollected Medicare and Social Security taxes on tips? But how can I have uncollected taxes on tips when I literally make zero tips? Is this some kind of error from payroll? Should I be concerned about this? My tax software is asking me about these entries and I have no idea what to tell it. I don't want to file incorrectly and get in trouble with the IRS later.

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18 comments

Anastasia Fedorov

•8M

What you're seeing is actually a common source of confusion! Boxes 12a and 12b with codes A and B on your W-2 refer to uncollected Social Security tax and Medicare tax on tips, respectively. The most likely explanation is that there was a data entry error by your employer's payroll department. Since you don't work in a tipped position at a manufacturing plant, these codes shouldn't apply to your situation. I'd recommend contacting your HR or payroll department right away to ask about this discrepancy. They can issue a corrected W-2 (called a W-2c) if there was an error. It's important to get this fixed before filing your taxes since these codes could affect your tax calculations. While waiting for a corrected form, make a note of the issue and keep documentation of your attempts to resolve it. This will help if there are any questions from the IRS later.

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Anastasia Fedorov

•8M

Code A represents uncollected Social Security tax on tips, which is essentially Social Security tax that your employer couldn't withhold from your wages. This typically happens when you receive enough tips that the withholding from your regular wages wasn't sufficient to cover all the required Social Security tax. As for whether this will affect your refund, yes, it could potentially impact your tax calculations. If these codes are incorrectly applied to your W-2, it might alter what you owe or what you're refunded. That's why getting a corrected W-2 from your employer is important before you file.

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Sean Doyle

•8M

I had a similar issue last year and found that using taxr.ai was incredibly helpful. I was getting nowhere with my company's HR department about some weird codes on my W-2, and I just couldn't understand what was happening. I uploaded my W-2 to https://taxr.ai and it analyzed all the boxes and codes, explained exactly what each meant, and pointed out what looked incorrect based on my employment situation. It even generated a letter I could send to my employer requesting the correction. Saved me hours of research and confusion!

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Sean Doyle

•8M

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Zara Rashid

•8M

Following up about taxr.ai - I decided to try it with my situation including my weird W-2 codes, and wow it was way more helpful than I expected! I uploaded my documents and it immediately flagged the discrepancy in my Box 12 codes, explaining that they were inconsistent with my reported wages and job type. The explanation tool broke down exactly what each code meant and why it seemed out of place. Even better, it generated a detailed letter for my HR department explaining the specific issue and citing the relevant tax codes. My payroll guy actually thanked me for being so specific about the problem! They're issuing a corrected W-2c now. Definitely saved me from what could have been a nightmare audit situation.

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Nia Jackson

•8M

If you're struggling to get answers from your HR department about these incorrect W-2 codes, you might want to try Claimyr. I was in a similar situation last year with some tax document errors and needed to talk to someone at the IRS, but kept getting those frustrating busy signals or disconnects. I found https://claimyr.com and they actually got me through to a real IRS agent in about 20 minutes instead of the hours I was wasting on hold. There's a demo of how it works at https://youtu.be/_kiP6q8DX5c if you're curious. The IRS agent I spoke with was able to tell me exactly how to handle the incorrect codes while waiting for a corrected W-2, which saved me from delaying my filing.

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Nia Jackson

•8M

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CosmicCruiser

•8M

I have to admit I was completely wrong about Claimyr in my previous comment. After another frustrating morning of trying to reach the IRS about my W-2 issues and getting disconnected twice, I decided to try it out of desperation. The system did exactly what they claimed - I got a call back in about 35 minutes and was connected directly to an IRS representative who was already on the line. The agent was super helpful and explained that I should file Form 4852 (Substitute for W-2) if my employer doesn't provide a corrected W-2c in time. They also confirmed that codes A and B in boxes 12a and 12b absolutely shouldn't be there if I'm not receiving tips, and advised me on how to document the error. Would have taken me weeks to get this information otherwise. Sometimes being proven wrong is actually a good thing!

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Aisha Khan

•8M

I work in payroll and see this mistake sometimes. Codes A and B in Box 12 are typically used for restaurant workers or other tipped employees. Someone probably selected the wrong industry code or employee classification for you in the payroll system, which automatically generated these boxes. It's definitely an error that should be fixed. Quick tip while you're waiting for a corrected W-2: keep track of all your pay stubs for the year and compare the totals to what's on your W-2. If everything else matches up (Box 1 wages, Box 2 federal withholding, etc.), then you might be okay to file with the current W-2 and just ignore those particular codes, but definitely check with a tax professional first.

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Aisha Khan

•8M

If everything else on your W-2 matches your pay stubs, then the tax you owe should be calculated correctly based on your actual wages and withholding. The presence of these codes by themselves doesn't change your tax liability if there aren't any associated amounts that were factored into your income incorrectly. That said, I'd still recommend getting a corrected W-2 for your records and to prevent any potential questions from the IRS. Most tax software might flag these entries and ask you about tip income you don't actually have, which could lead to reporting errors if you're not careful.

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