What Is a W-2?
Form W-2 (Wage and Tax Statement) is issued by your employer by January 31 each year. It reports your annual wages and the taxes withheld. You need it to file your federal and state tax returns.
Key Boxes Explained
Box 1 — Wages, Tips, Other Compensation Your taxable wages. This is gross pay minus pre-tax deductions (401k, HSA, FSA, health insurance premiums). This is what you report as income on your federal return.
Box 2 — Federal Income Tax Withheld Total federal income tax your employer sent to the IRS. If this exceeds your actual tax liability, you get a refund.
Box 3 — Social Security Wages Wages subject to Social Security tax. Includes income up to the $176,100 2025 wage base. Does NOT subtract 401(k) contributions (they’re still subject to FICA).
Box 4 — Social Security Tax Withheld Should be exactly 6.2% of Box 3 (up to $10,453.20 max).
Box 5 — Medicare Wages All wages subject to Medicare tax — no wage cap, so Box 5 ≥ Box 3.
Box 6 — Medicare Tax Withheld 1.45% of Box 5 (plus 0.9% additional Medicare on wages over $200,000).
Box 12 — Various Deductions and Benefits (codes):
- Code D: Traditional 401(k) contributions
- Code W: Employer + employee HSA contributions
- Code DD: Employer-sponsored health insurance cost
- Code AA: Roth 401(k) contributions
Box 13 — Statutory Employee / Retirement Plan / Third-Party Sick Pay Check marks indicating special statuses.
Box 15-17 — State Tax Info State abbreviation, state wages, and state income tax withheld.
Common W-2 Mistakes
- Multiple W-2s: Add all Box 1 amounts together on your return
- Box 1 lower than expected: Pre-tax deductions are working correctly
- Missing W-2: Contact your employer; IRS has a substitute form (4852) as a last resort