What Does Box 12 Code AA Mean on Your W-2?

Code AA in Box 12 of your W-2 is the total you contributed to a Roth 401(k) through payroll during the year. It’s a reporting line, not a tax you owe. The money was already taxed on the way in, so for most filers no deduction, extra form, or follow-up action is needed at tax time.

What the Number Represents

Your employer uses Code AA to tell the IRS how much of your pay you directed into the Roth side of a 401(k) plan. The figure next to the code is your own elective deferral only. It does not include any employer matching contribution, even at employers that have adopted the newer designated Roth matching option under SECURE 2.0, which is still uncommon. Matching dollars sit in a separate pre-tax bucket and are not reported under Code AA.¹

Why It’s Already Included in Your Taxable Wages

Because Roth contributions are made with after-tax money, the Code AA amount is already baked into Box 1 (wages and tips), Box 3 (Social Security wages), and Box 5 (Medicare wages). You’ve paid income tax and FICA on those dollars through the year’s regular payroll withholding. There is nothing to deduct and no adjustment to make on your return.²

Code AA vs. Code D

If your W-2 also has an amount next to Code D in Box 12, that’s your traditional pre-tax 401(k) contribution. The split matters because the tax treatment is opposite. Code D money is excluded from Box 1, so you haven’t paid income tax on it yet and will owe tax when you withdraw it later. Code AA money is inside Box 1, you’ve already paid income tax on it, and qualified withdrawals come out tax-free down the road.²

Both codes show up in Boxes 3 and 5 either way, because Social Security and Medicare taxes apply to both kinds of contributions. The only tax difference is in Box 1.

The 2026 Deferral Limit It Counts Against

Code AA counts toward the annual elective deferral ceiling that applies to all your employee contributions across 401(k), 403(b), and governmental 457(b) plans combined. For 2026, that ceiling is $24,500.³ If you contribute to both the Roth and traditional sides of your 401(k), the combined total of Code AA and Code D cannot go above that number.

Workers 50 and older get a catch-up on top of the base limit: $8,000 for most, and a larger $11,250 for the narrower age 60 through 63 window added by SECURE 2.0. That brings the total possible deferral to $32,500, or $35,750 for those four catch-up-eligible years.³

Add Up Every W-2 If You Changed Jobs

The one scenario where Code AA requires action is when you contributed to 401(k) plans at more than one employer in the same year. Each payroll system only knows what you deferred there, so the combined Code AA and Code D totals across all your W-2s can quietly exceed the annual limit. The IRS treats anything over the ceiling as an excess deferral, and if you leave it alone, you’ll be taxed on the excess in the year you contributed it and taxed again when you later withdraw it.⁴

To avoid the double tax, ask one of your plan administrators to distribute the excess amount plus its earnings by April 15 of the following year. For excess deferrals made during 2026, the correction deadline is April 15, 2027. Filing a return extension does not extend this deadline.⁴

Check Whether You Qualify for the Saver’s Credit

Roth 401(k) contributions reported under Code AA can count toward the Retirement Savings Contributions Credit, better known as the Saver’s Credit. For 2026, the income ceilings are $40,250 for single filers, $60,375 for heads of household, and $80,500 for married couples filing jointly. The credit is worth 10% to 50% of up to $2,000 in contributions, or $4,000 for joint filers.⁵ If your AGI is in that range, don’t skip it.

If the Code AA Amount Looks Wrong

If the dollar figure next to Code AA doesn’t match your pay stubs or year-end 401(k) statement, or the code is on your W-2 but your contributions were actually pre-tax (meaning it should be Code D), contact your employer’s payroll or HR team and request a corrected W-2, called a W-2c. The IRS lists Code AA mix-ups among the common reporting errors on retirement plan W-2s.⁶

Don’t file with a number you know is wrong. An incorrect Code AA can make the IRS think you blew past the deferral limit, or it can misstate your Roth basis in a way that’s harder to untangle later. Fix it at the source before you file.

What You Get in Return Later

Paying tax now on Code AA contributions buys tax-free treatment later, as long as the eventual withdrawal is a qualified distribution. Two conditions have to be met together: you must have held a designated Roth account in that plan for at least five tax years (the clock starts January 1 of the first year you contributed), and the distribution must come after age 59½, or be triggered by disability or death. When both are satisfied, the entire withdrawal, including every dollar of investment growth, is free of federal income tax.¹⁷

That’s the reason the IRS tracks the Code AA figure separately in the first place. The number on this year’s W-2 is both a limit check for the current tax year and the opening entry in the record that eventually makes your retirement withdrawals tax-free.

1
Internal Revenue Service. Retirement Plans FAQs on Designated Roth Accounts
2
Internal Revenue Service. General Instructions for Forms W-2 and W-3 (2026)
3
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
4
Internal Revenue Service. Consequences to a Participant Who Makes Excess Deferrals to a 401(k) Plan
5
Internal Revenue Service. Retirement Savings Contributions Credit (Saver’s Credit)
6
Internal Revenue Service. Common Errors on Form W-2 Codes for Retirement Plans
7
Office of the Law Revision Counsel. 26 U.S. Code 402A – Optional Treatment of Elective Deferrals as Roth Contributions