Decode every box on your W-2 form with this comprehensive line-by-line guide. Understand wages, withholdings, benefits, and how each number affects your tax return.

What Is a W-2 Form and Why It Matters

The W-2, officially called the Wage and Tax Statement, is one of the most important tax documents you will receive each year. Your employer is required to send you a W-2 by January 31 for the previous tax year, and it reports your total earnings, federal and state taxes withheld, Social Security and Medicare taxes, and various benefits. You need this form to file your federal and state income tax returns accurately. The information on your W-2 must match what the IRS has on file, so understanding each box helps you verify accuracy and catch potential errors before filing.

Boxes 1 Through 6: Income and Federal Taxes

Box 1 shows your federal taxable wages, which may differ from your gross salary because pre-tax deductions for 401(k) contributions, health insurance premiums, and FSA contributions reduce this amount. Box 2 shows federal income tax withheld throughout the year. Box 3 reports Social Security wages, which includes all earnings up to the annual wage base ($168,600 in 2024). Box 4 shows Social Security tax withheld (6.2% of Box 3). Box 5 is Medicare wages, which has no cap, and Box 6 is Medicare tax withheld (1.45% of Box 5, plus an additional 0.9% on earnings above $200,000).

Boxes 7 Through 14: Tips, Benefits, and More

Box 7 reports Social Security tips if applicable. Box 8 shows allocated tips for food and beverage workers. Box 10 reports dependent care benefits (FSA). Box 11 shows distributions from nonqualified deferred compensation plans. Box 12 is one of the most complex boxes, using letter codes to report various items: Code D for 401(k) contributions, Code DD for employer-sponsored health coverage cost, Code W for HSA contributions, and many more. Box 13 has checkboxes for statutory employee, retirement plan participant, and third-party sick pay. Box 14 is used for miscellaneous items like union dues, state disability insurance, or educational assistance.

State and Local Tax Boxes (15-20)

Boxes 15 through 20 report state and local tax information. Box 15 shows your employer state ID number, Box 16 reports state wages, and Box 17 shows state income tax withheld. Boxes 18-20 cover local wages, local income tax, and the locality name. If you worked in multiple states, you may have multiple entries in these boxes. Compare Box 16 to Box 1 because state taxable wages may differ from federal depending on your state rules.

Common W-2 Errors and How to Fix Them

W-2 errors are more common than you might think. Check that your name and Social Security number are correct, verify that Box 1 reflects your expected taxable income (accounting for pre-tax deductions), and confirm that Box 2 matches your pay stubs. If you find errors, contact your employer payroll department immediately to request a corrected W-2c form. Do not file your tax return with incorrect information. The IRS will match your return against the W-2 data they receive from your employer, and mismatches can trigger audits or processing delays.

How Your W-2 Connects to Your Tax Return

When filing your federal tax return (Form 1040), W-2 information flows directly into specific lines. Box 1 wages go on Line 1 of Form 1040. Federal tax withheld (Box 2) goes on Line 25a. These numbers are crucial because the difference between your total tax liability and your total withholding determines whether you owe money or receive a refund. If you received multiple W-2s from different employers, add all Box 1 amounts together for total wages and all Box 2 amounts for total federal tax withheld. Use our Income Tax Calculator to estimate your total tax liability.

Frequently Asked Questions