According to Microsoft, Windows 98 supports .NET 2.0 based apps.
So technically it should be possible for you to deploy one you made with VS2012, if you set the target framework option at 2.0 in the project build options.
BE CAREFUL: this does not guarantee that the exact same code that runs on other windows versions will work exactly the same in Win98. There could be very subtle variations if for example you are using COM interopt, P/Invoke calls or if you're using a 3rd party control library.
Also, be aware that targeting 2.0 takes away many great things that came with .NET over the years, such as LINQ, Xaml and async/await.
If I may suggest (please note that I don't know what your requirements are), rather than trying to directly support a 16 years old OS, why don't you develop a web front with an ASP.NET backend instead? This will allow you to remain up to date with .NET goodness and reuse any business logic code you may already have.