What is a W-2 form?

A tax form all employees should receive from their employers

Derek Silva

By

Derek Silva

Derek Silva

Personal Finance Expert

Derek is a personal finance editor at Policygenius in New York City, and an expert in taxes. He has been writing about estate planning, investing, and other personal finance topics since 2017. He especially loves using data to tell a story. His work has been covered by Yahoo Finance, MSN, Business Insider, and CNBC.

Published April 2, 2021|8 min read

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Key Takeaways

  • W-2 forms show how much an employer paid you and how much tax they withheld

  • Employees do not need to fill out a W-2 form, only employers do

  • Employers must send each employee a W-2 by February 1, 2020

  • A W-2 is different from a W-4, which is a form you fill out when you start a job so your employer knows approximately how much tax to withhold from each paycheck

IRS Form W-2 is a tax form that employers must send their employees to report the employee’s wages and other income for that tax year. A W-2 form also states any federal, state, or other local taxes the employer withheld for the employee. Employees do not need to fill out a W-2 form; only employers do that. If you have multiple employers who withhold income taxes, you will likely receive a W-2 from each of them. If you have an employer who doesn’t withhold taxes — like if you’re an independent contractor or freelancer — you should receive a 1099 form instead of a W-2 form.

Need more help with your taxes? Start with our guide to filing income tax.

When will I get my W-2?

Employers are required to send your 2020 W-2 form by February 1, 2021. If you’re receiving a digital W-2, it should be in your account by February 1. Look for your W-2 online by logging into your employer's pay or human resources portal. If you are receiving a paper W-2, your employer must mail it to you so that it’s postmarked by February 1. It may take weeks for you to actually receive a paper W-2 since it has to travel through the mail. If you don’t receive a physical W-2 by March, you may want to contact your employer for another copy.

Form W-2 vs W-4

Form W-2 is a form that an employer completes and sends to an employee in order to help you complete your tax return. The only thing employees need to do with a W-2 is use its information to file their taxes. Form W-4 is a form that employees need to fill out and return to their employer to help the employer determine how much tax to withhold from upcoming paychecks. 

You get your W-2 in January or February and it details the income you earned and taxes you paid in the previous year. You should complete a W-4 any time you start at a new employer or experience a life event that could affect your taxes, like getting married, getting divorced, or having a child. If you have to pay state income tax, you may also have to fill out your state’s equivalent of Form W-4. This differs from a W-2, which includes both state and federal income tax information.

For more, read our article on how and when to fill your W-4.

Box-by-box W-2 instructions

A W-2 is necessary for completing federal, state, and local income tax returns. If you are filing a paper return, attach all W-2 forms to your return. If you are e-filing through an online tax software, you will need to enter all the information from your W-2, but you won’t need to mail in your actual W-2. Below we explain how to read a W-2 form, box by box.

Boxes a through f of a W-2 contain identification information for you — including your Social Security Number and address — as well as for your employer — including their legal name, address, and Employer Identification number (EIN). Note that your employer’s address may be the company’s headquarters instead of your office.

Use one of this year’s best tax filing services to upload your W-2 information with just a picture.

Box 1 lists how much income you had for the year from that employer. This value includes your normal wages or salary plus any tips you earned. You’ll need to include this income on Form 1040 of your tax return.

Box 2 states how much federal income tax was withheld from your pay, which needs to go on your tax return. Your federal tax withholding is how much tax you’ve already paid, and it will help determine whether you get a refund or owe a tax bill.

Box 3 is the income you earned that is subject to Social Security taxes. Social Security tax only applies to up to $142,800 of your wages in 2021 (known as the wage base limit), so if you earned more than that, the amount in your box 3 will be different than the amount in box 1.

Box 4 shows how much Social Security tax your employer already withheld from your pay. The Social Security tax rate is 6.2%, so the most anyone should have in box 4 is $8,853.60.

Box 5 is the income you earned that is subject to Medicare taxes. Unlike Social Security taxes, there’s no limit on how much of your income is subject to Medicare tax. The value in your box 5 (and box 3) may differ from your box 1 value if you contributed to a 401(k).

Box 6 shows how much Medicare tax was already withheld from your pay. How much Medicare tax you need to pay is based on two values: 1.45% of your wages (this is the basic Medicare tax rate) plus the Additional Medicare Tax, which is 0.9% on any wages above $200,000. If you are subject to the additional surtax, you’ll have to complete Form 8959, Additional Medicare Tax, with your tax return.

Box 7 shows how much income you earned during the year from tips, based on what you reported to your employer.

Box 8 is for any allocated tips you earned. An allocated tip is a tip your employer paid you beyond what you already reported. You may receive allocated tips if the tips you earned yourself weren’t enough to reach a mandatory minimum wage level. Someone with allocated tips will need to fill out Form 4137, Social Security and Medicare Tax on Unreported Tip Income with their tax return.

Box 9 is empty.

Box 10 shows any dependent care benefits that your employer provided to you under a dependent care assistance program. Your first $5,000 is generally exempt from tax and any amount over $5,000 is included in your regular wages (box 1). If you need to determine exactly how much was or wasn’t taxable, fill out Form 2441, Child and Dependent Care Expenses.

Learn more: Who can I claim as a dependent?

Box 11 reports how much income was distributed to you from an employer’s nonqualified deferred compensation plan or 457(b) plan. The purpose of this box is for the Social Security Administration (SSA) to determine if some or all of your income (as listed in boxes 1, 3, or 5) was earned in a previous year.

Box 12 lists any compensation you received from your employer in the form of benefits like a 401(k) plan, Roth 401(k), or health insurance benefits paid by your employer. Each type of compensation has a code, which is entered in front of the number. Note that this code is unrelated to the exact box — 12a, 12b, 12c, or 12d. Those boxes are merely for easier reading of the form.

List of W-2 box 12 codes

CodeMeaning
AUncollected Social Security or RRTA tax on tips — include this on Form 1040 Schedule 2
BUncollected Medicare tax on tips — include this on Form 1040 Schedule 2
CTaxable cost of group-term life insurance over $50,000 — already included in box 1, 3, and 5 as necessary
DPre-tax contributions to a 401(k) plan, deferred arrangement plan, or SIMPLE 401(k) plan
EPre-tax contributions to a 403(b) salary reduction agreement
FPre-tax contributions to a section 408(k)(6) salary reduction SEP
GPre-tax contributions and employer contributions to a 457(b) deferred compensation plan
HPre-tax contributions to a section 501(c)(18)(D) tax-exempt organization plan
JNontaxable sick pay
K20% excise tax on excess golden parachute payments
LSubstantiated employee business expense reimbursements — this isn't taxable
MFor former employees only, uncollected Social Security or RRTA tax on the taxable cost of group-term life insurance over $50,000
NFor former employees only, uncollected Medicare tax on the taxable cost of group-term life insurance over $50,000
PReimbursements for excludable moving expense that were paid directly to a member of the U.S. Armed Forces
QNontaxable combat pay — this may qualify as earned income for the earned income tax credit (EITC)
REmployer contributions to an Archer MSA — use this to complete Form 8853
SEmployee salary reduction contributions under a section 408(p) SIMPLE plan
TAdoption benefits — fill out Form 8839 to determine the taxable and nontaxable amounts
VIncome from the exercise of nonstatutory stock options
WEmployer contributions to a health savings account (HSA) — report on Form 8889
YDeferrals under a section 409A nonqualified deferred compensation plan — already included in box 1
ZIncome under a nonqualified deferred compensation plan that fails to satisfy section 409A
AARoth 401(k) plan contributions
BBRoth 403(b) plan contributions
DDCost of employer-sponsored health coverage — this isn't taxable
EERoth contributions to a governmental 457(b) plan
FFPermitted benefits under a qualified small employer health reimbursement arrangement (QSEHRA)
GGIncome from qualified equity grants under section 83(i)
HHAggregate deferrals under section 83(i) elections, as of the close of the calendar year

Box 13 includes three checkboxes. Any boxes that apply to you will be checked. First is the statutory employee box for someone who has to pay Social Security and Medicare taxes on their income, but doesn’t have to withhold federal income tax. If the statutory employee box is checked on your W-2, you will put your income on Schedule C, line 1.

The retirement plan box is for any employee who participated in a 401(k) or similar retirement plan. If you did contribute to an employer-sponsored retirement plan, know that there may be limits on how much of your contributions to a traditional IRA are deductible.

The third-party sick pay box applies to an employee for whom an employer paid sick leave benefits to a third party. If this box is checked for you, make sure you understand whether or not Social Security and Medicare taxes were already withheld from your paycheck before you file your income tax return.

Box 14, titled Other, is where your employer can write in any other information they want to share with you. Box 14 is generally only for informational purposes, but you may end up using it to help you complete certain tax forms. Like box 12, each type of information in box 14 has its own code and many are specific to a state or locality, such as the code NYFPL for New York family paid leave benefits. Information that may be included in box 14 is state disability insurance taxes your employer withheld (likely with code SDI), union dues, health insurance premiums deducted, nontaxable income you received, and any educational assistance payments.

Related: 53 tax deductions and credits you can claim in 2021

Boxes 15-20 contain information for state and local income tax returns. Box 15 is for your employer to write in their state ID number. Box 16 shows your wages that were subject to state income tax and box 17 shows how much state income tax was already withheld. If you live in a city or locality with its own income tax, box 18 is how much of your income was subject to local income tax, box 19 reports how much was already withheld for that local income tax, and box 20 shows a code that identifies your locality.

If you have specific questions about how your employer calculated the amounts on your W-2, check with your employer. The IRS instructions for Form W-2 may also help.