Form W-2, the Wage and Tax Statement, is the annual payroll reporting document employers prepare for each employee. It shows the employee’s total taxable wages for the tax year and the amounts withheld from those wages for federal income tax, Social Security, Medicare, and (where applicable) state and local taxes. Employers must send copies both to the employee and to the Social Security Administration (SSA); the IRS receives the information from the SSA.
Key takeaways
– Form W-2 reports an employee’s annual wages and the amounts withheld for taxes.
– Employers must furnish W-2s to employees and file W-2/W-3 with the SSA by the end of January following the tax year.
– Employees use W-2 data to complete Form 1040. Mistakes or omissions can lead to IRS inquiries or incorrect tax returns.
– Independent contractors receive Form 1099-NEC (not a W-2) for nonemployee compensation, generally when payments reach the $600 reporting threshold.
Who files Form W-2?
– Employers file a W-2 for every person treated as an employee. This includes part-time and seasonal workers. There is no minimum wage amount that exempts an employer from reporting wages on Form W-2.
– Nonemployee workers (independent contractors) receive Form 1099-NEC if the payer paid them $600 or more in a year (reporting rules and thresholds apply).
– Employers transmit W-2 information to the SSA (and often electronically) and provide employees with their copy by the required deadline.
Important dates and filing requirements
– Employee copy distribution: Employers must furnish employees’ W-2s by January 31 following the tax year.
– Employer filing to SSA: Employers must file W-2s (and Form W-3, the Transmittal of Wage and Tax Statements) with the SSA by the same deadline. Electronic filing may be required for larger employers.
– The SSA uses W-2 data to credit earnings to workers’ Social Security records; the IRS uses the data to match reported income to tax returns.
Information included on a W-2 (what the boxes mean)
A W-2 contains many numbered boxes. Important boxes include:
– Box a — Employee’s Social Security number.
– Box b — Employer Identification Number (EIN).
– Box c — Employer’s name, address, and ZIP code.
– Box d — Control number (employer’s internal identifier, if any).
– Box e/f — Employee’s name and address.
– Box 1 — Wages, tips, other compensation (federal taxable wages).
– Box 2 — Federal income tax withheld.
– Box 3 — Social Security wages.
– Box 4 — Social Security tax withheld.
– Box 5 — Medicare wages and tips.
– Box 6 — Medicare tax withheld.
– Box 7/8 — Social Security tips, allocated tips.
– Box 10 — Dependent care benefits.
– Box 12 — Various codes for specific items (retirement plan contributions, adoption benefits, nontaxable sick pay, etc.). Each code (A, D, W, etc.) carries a specific meaning.
– Box 13 — Checkboxes (statutory employee, retirement plan, third-party sick pay).
– Box 14 — Employer’s miscellaneous information (often used for state-specific items or employer notes).
– Boxes 15–20 — State and local wages and tax withheld, state ID, and local jurisdiction names.
How to read your W-2 — practical steps
1. Confirm identity data: Verify your name, Social Security number, and address match your records exactly. Errors here can create problems with Social Security credits and IRS matching.
2. Check employer info: Confirm the employer name and EIN are correct.
3. Compare wages: Match Box 1 (federal wages) with your final pay stub for the year. Note that pre-tax contributions (e.g., traditional 401(k), some flexible spending accounts) reduce Box 1 wages but may not reduce Boxes 3–5.
4. Review tax withholding: Boxes 2, 4, and 6 show federal income tax, Social Security, and Medicare withheld. Ensure totals align with your year-end pay stub.
5. Understand Box 12 codes: Look up the meanings of any Box 12 letters (e.g., D is elective deferrals to a 401(k); W is employer retirement plan contributions to an HSA). Your payroll provider or the IRS instructions can help decode them.
6. Verify state/local boxes: If you worked in multiple states, confirm state wages and withholding (Boxes 15–20) are accurate.
7. Note special items: Tips, dependent care, adoption benefits, and taxable fringe benefits may appear in specific boxes—treat these as part of your taxable income where required.
What to do if you don’t receive a W-2 or it’s incorrect — employee practical steps
1. Wait until Jan. 31: Employers must furnish W-2s by this date. If you still haven’t received it shortly after Jan. 31, proceed.
2. Contact your employer or payroll provider: Ask whether the W-2 was mailed or posted electronically, confirm your mailing/e-mail address and whether your account is set to receive electronic forms. Employers may reissue corrected copies.
3. If employer is unresponsive or you can’t get a corrected W-2: Contact the IRS for guidance (the IRS can contact the employer). The IRS telephone number and procedures are available on IRS.gov.
4. File on time using a substitute form if needed: If you still don’t have a W-2 by the tax filing deadline, you can file your return on time using Form 4852 (Substitute for Form W-2), using your pay records to estimate wages and withholding. Keep documentation of your attempts to obtain the W-2.
5. If your W-2 is wrong: Request a corrected W-2 (Form W-2c) from your employer. If a corrected form is not provided and you have filed Form 4852, coordinate further with the IRS if adjustments are required.
How employers file and correct W-2s — practical steps for employers
1. Collect W-4s at hire: Keep employees’ Form W-4s on record to determine federal withholding; update when employees submit changes.
2. Maintain accurate payroll and employee records: Correct names, SSNs, addresses, and earnings records to reduce errors.
3. Meet the filing deadline: Furnish employee copies and file W-2/W-3 with the SSA by January 31 (electronic filing may be required for larger filers).
4. E-file where required: Use the SSA Business Services Online or approved software for large-volume e-filing.
5. Correct mistakes promptly: If you discover an error after filing, prepare Form W-2c (Corrected Wage and Tax Statement) and file it with the SSA and provide corrected copies to the affected employees.
6. Retain records: Keep payroll records and copies of filed W-2s per recordkeeping rules (usually several years).
Related tax forms (how they differ)
– Form W-4 (Employee’s Withholding Certificate): Completed by the employee at hire (and when personal circumstances change). It instructs the employer how much federal income tax to withhold from each paycheck.
– Form 1099-NEC / 1099-MISC: Used to report payments to nonemployees (independent contractors). Generally, a payer issues a 1099-NEC for nonemployee compensation of $600 or more in a year.
– Form W-2G: Reports certain gambling winnings and any federal income tax withheld on those winnings.
– Form 1098-E: Lender issues to report student loan interest paid (for potential deduction).
– Form 1098-T: Educational institutions issue to report qualified tuition and related expenses (for education tax credits).
– Form 1040: Use the information from W-2s and 1099s to prepare your federal income tax return.
How do employees know if enough tax has been withheld?
Practical steps:
1. Review paystubs: Track year-to-date wages and withholding amounts regularly.
2. Use the IRS Tax Withholding Estimator: Available on IRS.gov, it helps determine whether current withholding will cover expected tax liability.
3. Adjust your Form W-4: If withholding is too low or too high, submit an updated W-4 to your employer to change the withholding amount.
4. Consider estimated tax payments: If you have substantial non-wage income (investment, rental, freelance), you may need to make quarterly estimated tax payments.
5. Consider life changes: Marriage, new dependents, second job, or large nonwage income can all affect withholding needs.
How much money do you need to make to get a W-2?
– For employees: There is no minimum dollar threshold — employers report wages for employees regardless of the amount paid. If you are classified as an employee, you should receive a W-2 covering all wages paid during the year.
– For independent contractors/nonemployees: Payers generally issue Form 1099-NEC when they pay $600 or more during the tax year. Thresholds and reporting rules vary for other types of 1099 forms.
Difference between a W-2 and a W-4
– Form W-4 is completed by the employee and tells the employer how much federal income tax to withhold from each paycheck.
– Form W-2 is prepared by the employer after year-end to report total wages paid and taxes withheld during the year. W-4 is about withholding; W-2 is about year-end reporting.
The bottom line
Form W-2 is the official record of wages paid and taxes withheld for employees. Employers must furnish W-2s to employees and file W-2/W-3 with the SSA by the end of January following the tax year. Employees use W-2 information to prepare their federal and state income tax returns. Keep careful payroll and withholding records, verify W-2 data against paystubs, and act quickly to get corrected forms or file substitutes if your paperwork is missing or inaccurate.
Selected official sources and further reading
– IRS — About Form W-2, Wage and Tax Statement:
– IRS — Form W-4, Employee’s Withholding Certificate:
– IRS — Topic No. 751, Social Security and Medicare Withholding Rates:
– SSA — Employer W-2 Filing Information (Business Services Online): /
– IRS — Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R:
– IRS — About Form 1099-NEC
Editor’s note: The following topics are reserved for upcoming updates and will be expanded with detailed examples and datasets.