Form W-2 is a statement of wages earned and taxes paid by you while working for a single employer during a calendar year. Your employer is required to provide you with a copy of your W-2, along with submitting copies to the Social Security Administration (SSA) and the Internal Revenue Service (IRS).
The W-2 includes various details, such as:
Employee information: name, address, and Social Security number.
Employer information: name, address, and Employer Identification Number (EIN).
Earnings: total wages, salary, bonuses, and other compensation.
Tax withholding: federal income tax withheld, Social Security tax, and Medicare tax.
State and local taxes: state and local income taxes withheld, if applicable.
Benefits: the value of certain benefits provided by the employer.
Other information: this may include information about retirement plan contributions, health insurance premiums, and other relevant details.
Employees use the information on their W-2 to prepare their individual income tax returns. It is an essential document for both employers and employees during the tax-filing season.
W-2 Boxes
Here is an overview of the boxes and codes on the Form W-2 and their definitions:
Box 1 - Wages, tips, other compensation:
Represents total taxable wages, including salary, hourly wages, bonuses, and other forms of compensation.
Box 2 - Federal income tax withheld:
Shows the total amount of federal income tax withheld from the employee's wages throughout the year.
Box 3 - Social security wages:
Reflect the total wages subject to Social Security tax.
Box 4 - Social security tax withheld:
Displays the total amount of Social Security tax withheld from the employee's wages.
Box 5 - Medicare wages and tips:
Indicates the total wages subject to Medicare tax.
Box 6 - Medicare tax withheld:
Displays the total amount of Medicare tax withheld from the employee's wages.
Box 12 - Codes and amounts:
Includes various codes (e.g., D for 401(k) contributions) along with corresponding amounts. This box provides information on different types of compensation and benefits.
Box 14 - Other:
May include additional information such as state disability insurance taxes, union dues, or other specific items.
Box 15 - State and employer’s state ID number.
The state reported earnings and taxes along with the employer’s identification number.
Box 16 - State wages, tips, etc.:
Reports the total wages subject to state income tax.
Box 18 - Local wages, tips, etc.:
Reports the total wages subject to local income taxes.
Control number - Optional use by the employer for internal tracking purposes with payroll records.
It's important for you to review your W-2 carefully, as the information in these boxes is used to complete your individual income tax returns. Employers are required to provide W-2 forms to employees by January 31.
W-2 Box 12 codes
Box 12 on Form W-2 is used to report various types of compensation and benefits that are not included in Boxes 1, 3, or 5. Here are some common Box 12 codes and their meanings:
A – Uncollected social security tax on tips.
B – Uncollected Medicare tax on tips.
C – Taxable costs of group-term life (GTL) insurance over $50,000.
D – Elective deferral under a Section 401(k) cash or arrangement plan.
E – Code E (includes elective deferrals under a Section 403(b) salary reduction agreement).
F – Elective deferrals under a Section 408(k)(6) salary reduction SEP.
G – Elective deferrals and employer contributions to a Section 457(b) deferred compensation plan.
H – Elective deferrals to a Section 501(c)(18)(D) tax-exempt organization plan.
J – Nontaxable sick pay.
K – 20% excise tax on excess golden parachute payments:
Include this tax on Form 1040 Schedule 2, line 17k. Enter the total amount of the tax.
L – Substantiated employee business expense reimbursements (nontaxable).
M – Uncollected Social Security tax or RRTA tax on taxable cost of group-term life insurance over $50,000 (former employees only).
N – Uncollected Medicare tax on taxable cost of group-term life (GTL) insurance over $50,000 (former employees only and not Additional Medicare Tax).
R – Any employer contributions to your Archer medical savings account (MSA).
S – Employee salary reduction contributions under a Section 408(p) SIMPLE.
T – Employer Provided Adoption benefits.
V – Income from exercise of non-statutory stock option(s).
W – Employer contributions to your health savings account (HSA).
Y – Deferrals under a Section 409A nonqualified deferred compensation plan.
Z – Income under a nonqualified deferred compensation plan that fails to satisfy Section 409A.
AA – Designated Roth contributions under a 401(k) plan.
BB – Designated Roth contributions under a 403(b) plan.
DD – Cost of employer-sponsored health coverage.
EE – Designated Roth contributions under a governmental 457(b) plan.
FF – Permitted benefits under a qualified small employer health insurance reimbursement arrangement.
GG – Income from qualified equity grants under Section 83(i).
HH – Aggregate deferrals under Section 83(i) elections as of the close of the calendar year.
These codes provide additional information about specific types of compensation, contributions, and benefits. You should review Box 12 on your W-2 for any codes that may apply, and consult a tax professional for more details on how each code effects your taxes.
W-2 Box 14 uses
Box 14 is used to report additional information that may be relevant to your tax return. This box can include various codes and corresponding amounts. The codes in Box 14 are optional, and their meanings can vary based on the employer's practices. Here are some common uses for Box 14:
Health insurance premium deductions
State disability insurance taxes withheld
Educational assistance payments
Any charitable contribution made through payroll deductions
Nontaxable income
A member of the clergy’s parsonage allowance and utilities
Uniform payments
Union dues
FAQ
What is a Form W-2?
Employers use the tax form known as Form W-2, or the "Wage and Tax Statement," to report an employee's annual wages and the amount of taxes deducted from their pay. Employees use this form to prepare their individual income tax returns.
When should I receive my W-2?
Employers are required to provide W-2 forms to employees by January 31 of the following tax year. This allows employees to have sufficient time to file their taxes.
Why are my wages lower in Box 1 than in Boxes 3, and 5?
You may have had pre-tax deductions that lowered your taxable wages. Some pretax deductions include cafeteria or Section 125 plans for medical, dental, and vision. Deductions for 401(k) and other retirement plans can also lower your taxable wages.
What information is on my W-2?
The W-2 includes information such as total wages, federal and state income tax withheld, Social Security and Medicare taxes withheld, and other relevant details such as contributions to retirement plans and health savings accounts.
What if my address is incorrect on my W-2?
You can still file your taxes with the incorrect address appearing on your W-2. The IRS will not require your employer to provide a W-2C for an incorrect address.
Can I access my W-2 online?
If you elected to receive your W-2 electronically, you can view it in Fingercheck. Learn more about accessing your W-2 with Employees: How to Find Your W-2 and Pay Stub Information
What do the different boxes on the W-2 mean?
Each box on the W-2 provides specific information. For example, Box 1 shows total taxable wages, Box 2 shows federal income tax withheld, and so on. Different boxes report various types of income, deductions, and taxes.
What should I do if there's an error on my W-2?
If you notice an error on your W-2, contact your employer immediately to request a correction. It's important to have accurate information when filing your taxes.
What if I didn't receive my W-2?
If you haven't received your W-2 by the end of January, contact your employer. They are required to provide you with a copy. If you still don't receive it, you can contact the IRS for assistance.
Please note: The information above is provided for general informational purposes only and should not be construed as legal or tax advice. Remember, tax laws and regulations can change, so it's always a good idea to consult with a tax professional or refer to the latest IRS guidelines for the most accurate and up-to-date information.