Guides
The W-2 Form Explained: Every Box, Line by Line
A W-2 form is the annual wage and tax statement your employer sends by January 31, reporting what you earned and what was withheld for federal, Social Security, Medicare, state, and local taxes. Every box has a specific job. Boxes 1 through 6 drive your federal return, boxes 12 and 13 carry the codes and checkboxes that change your taxable income, and boxes 15 through 20 feed your state and local filings. This guide decodes all of them.
The numbers in each box rarely match, and that is by design. Box 1 (federal taxable wages) is usually lower than Box 3 (Social Security wages) because pre-tax 401(k) deferrals reduce Box 1 but not Box 3. Reading a W-2 correctly means knowing which box feeds which line of your Form 1040.
What is a W-2 form and who receives one
A W-2 form is the IRS wage statement (officially Form W-2, Wage and Tax Statement) that every U.S. employer must issue to each employee paid $600 or more in a calendar year. It reports gross taxable wages and all taxes withheld. Employers must furnish it to employees and file a copy with the Social Security Administration by January 31 of the following year.
You get a W-2 if you are an employee. Independent contractors receive Form 1099-NEC instead, because no taxes are withheld from contractor pay. If you worked for more than one employer, you receive a separate W-2 from each. For the 2025 tax year, the furnishing deadline is February 2, 2026, because January 31 falls on a Saturday.
The form has lettered boxes (a through f) for identifying information and numbered boxes (1 through 20) for dollar amounts and tax data. The sections below cover both.
The lettered boxes: identifying information
The lettered boxes identify you and your employer and let the IRS and SSA match the form to the right taxpayer and payer. Box a is your Social Security number, box b is the employer identification number (EIN), and box c is the employer’s legal name and address. These do not affect your tax math, but errors here can delay processing.
| Box | Reports |
|---|---|
| a | Employee’s Social Security number (verify it is correct; a wrong SSN can misroute your earnings record) |
| b | Employer identification number (EIN), the employer’s federal tax ID |
| c | Employer’s name, address, and ZIP code |
| d | Control number, an optional internal payroll code that identifies the form in the employer’s records |
| e | Employee’s full legal name |
| f | Employee’s address and ZIP code |
W-2 boxes 1 through 6: federal wages and FICA
Boxes 1 through 6 carry the core federal numbers. Box 1 is your federal taxable wages, box 2 is the federal income tax already withheld, and boxes 3 through 6 report Social Security and Medicare (FICA) wages and the tax withheld on each. Box 1 typically differs from boxes 3 and 5 because pre-tax retirement deferrals reduce income tax wages but not FICA wages.
The relationship between these boxes is fixed. Box 4 should equal 6.2% of box 3, and box 6 should equal at least 1.45% of box 5. Box 3 is capped at the annual Social Security wage base, while box 5 has no cap.
| Box | Name | What it reports |
|---|---|---|
| 1 | Wages, tips, other compensation | Federal taxable wages after pre-tax deductions (401(k), pre-tax health premiums); flows to Form 1040 line 1a |
| 2 | Federal income tax withheld | Federal income tax your employer sent to the IRS on your behalf |
| 3 | Social Security wages | Wages subject to the 6.2% Social Security tax, capped at $176,100 for 2025 |
| 4 | Social Security tax withheld | 6.2% of box 3; maximum of $10,918.20 for 2025 ($176,100 x 6.2%) |
| 5 | Medicare wages and tips | Wages subject to Medicare tax; no cap, so this is often the highest wage box |
| 6 | Medicare tax withheld | 1.45% of box 5, plus an extra 0.9% Additional Medicare Tax on wages over $200,000 |
Box 1 excludes elective deferrals like traditional 401(k) contributions (reported in box 12, code D), which is why it can be thousands of dollars lower than box 5. Roth 401(k) contributions do not reduce box 1, because they are made after tax.
W-2 boxes 7 through 14: tips, benefits, and codes
Boxes 7 through 14 report tips, dependent care benefits, deferred compensation, the Box 12 lettered codes, the Box 13 checkboxes, and any other items in Box 14. Most employees see entries only in boxes 12 and 13. Tipped workers see amounts in boxes 7 and 8, and workers with dependent care flexible spending accounts see box 10.
Box 12 is where many taxable and informational items live, each tagged with a one- or two-letter code. Box 13 uses three checkboxes that can change how the rest of your return is treated, especially retirement plan participation, which affects IRA deduction limits.
| Box | Name | What it reports |
|---|---|---|
| 7 | Social Security tips | Tips you reported to your employer, subject to Social Security tax; box 3 plus box 7 cannot exceed $176,100 for 2025 |
| 8 | Allocated tips | Tips the employer assigned to you (common in large food and beverage venues); not included in boxes 1, 3, 5, or 7 |
| 9 | (Reserved) | Historically a verification code; now generally blank; box shrank on the 2026 form to make room for box 14 changes |
| 10 | Dependent care benefits | Amounts paid or reimbursed under a dependent care assistance program (often a dependent care FSA) |
| 11 | Nonqualified plans | Distributions from an employer nonqualified deferred compensation plan or nongovernmental Section 457(b) plan |
| 12 | Coded items | Lettered codes (A through HH) for deferrals, benefits, and taxes; see the code table below |
| 13 | Checkboxes | Three boxes: statutory employee, retirement plan, and third-party sick pay |
| 14 | Other | Employer-chosen items with no dedicated box: union dues, state disability (SDI), after-tax HSA, tuition, and, for 2025, qualified tips and overtime |
Box 12 codes you are most likely to see
Box 12 uses letter codes so the IRS can distinguish, for example, a pre-tax 401(k) deferral (code D) from an employer HSA contribution (code W). Some codes add to your taxable income; others are purely informational. The most common codes appear below.
| Code | What it reports | Taxable? |
|---|---|---|
| C | Taxable cost of group-term life insurance over $50,000 | Yes, already in boxes 1, 3, 5 |
| D | Elective deferrals to a 401(k) plan | No (reduces box 1) |
| E | Elective deferrals to a 403(b) plan | No (reduces box 1) |
| DD | Cost of employer-sponsored health coverage | No, informational only |
| W | Employer and pre-tax employee HSA contributions | No, informational |
| AA | Designated Roth contributions under a 401(k) plan | Yes, already in box 1 |
| BB | Designated Roth contributions under a 403(b) plan | Yes, already in box 1 |
| Q | Nontaxable combat pay | No |
| FF | Permitted benefits under a qualified small employer HRA (QSEHRA) | No |
Box 13 checkboxes
Box 13 has three checkboxes and no dollar amounts. Retirement plan is the one to watch: if it is checked, your ability to deduct a traditional IRA contribution may phase out based on income. Statutory employee changes where your wages are reported (Schedule C rather than as ordinary wages), and third-party sick pay flags benefits paid by an insurer.
- Statutory employee: You are treated as self-employed for certain taxes; report box 1 on Schedule C.
- Retirement plan: You participated in an employer plan; this can limit traditional IRA deductibility.
- Third-party sick pay: Sick pay was paid by a third party such as an insurance company.
W-2 boxes 15 through 20: state and local taxes
Boxes 15 through 20 report state and local wage and withholding data. Box 15 shows the state and the employer’s state tax ID, box 16 shows state taxable wages, and box 17 shows state income tax withheld. Boxes 18 through 20 repeat that pattern for city or local taxes. If you worked in more than one state, your W-2 may show multiple rows here.
State wages in box 16 often differ from box 1, because states define taxable wages differently (some tax 401(k) deferrals, some do not, and nine states have no wage income tax at all).
| Box | Name | What it reports |
|---|---|---|
| 15 | State / Employer’s state ID number | The two-letter state code and the employer’s state tax account number |
| 16 | State wages, tips, etc. | Wages taxable by that state; may differ from box 1 |
| 17 | State income tax | State income tax withheld and remitted to the state |
| 18 | Local wages, tips, etc. | Wages subject to a city, county, or school district income tax |
| 19 | Local income tax | Local income tax withheld |
| 20 | Locality name | The name or code of the taxing locality (for example, a city name) |
What changed for 2025 and 2026: tips, overtime, and Trump accounts
The One Big Beautiful Bill Act (OBBBA) created deductions for qualified tips and qualified overtime, which reshapes W-2 reporting. For tax year 2025, the IRS treats it as a transition year: employers are not required to break out qualified tips or overtime on the W-2 and can report them in box 14 or a separate statement. Notice 2025-62 grants penalty relief for 2025 forms that omit this detail.
For tax year 2026, the IRS finalized three new box 12 codes. These are prospective, so they will appear on W-2s issued in early 2027 for the 2026 year, not on the 2025 forms most readers hold now.
| Code (2026) | What it reports |
|---|---|
| TA | Employer contributions to a Trump account (Section 128 program) for an employee or dependent |
| TP | Total cash tips reported to the employer (supports the no-tax-on-tips deduction) |
| TT | Qualified overtime compensation (the extra half of time-and-a-half required under the FLSA) |
The IRS also split box 14 into box 14a (Other) and box 14b (Treasury Tipped Occupation Code) for 2026, and it reduced box 9’s size to make room. If your 2025 W-2 shows tips or overtime in box 14 with an employer label, that is the transition-year approach.
How the boxes connect to your Form 1040
Box 1 flows to Form 1040 line 1a as wages. Box 2 flows to the federal withholding line and is credited against your total tax. Boxes 17 and 19 feed your state and local returns and can support a state and local tax (SALT) itemized deduction. Box 12 codes may adjust income (for example, excess 401(k) deferrals) or support credits like the retirement savings contributions credit.
If box 4 or box 6 looks too high because you changed jobs and each employer withheld the maximum, you may have excess Social Security tax withheld. You can claim the excess as a credit on your Form 1040 (Schedule 3), rather than asking either employer for a refund.
Frequently asked questions
Why is Box 1 lower than Box 3 on my W-2?
Box 1 (federal taxable wages) excludes pre-tax deferrals such as traditional 401(k) contributions, pre-tax health premiums, and FSA contributions, while Box 3 (Social Security wages) does not exclude retirement deferrals. So if you contributed to a traditional 401(k), Box 1 is lower than Box 3 by roughly your deferral amount. Roth 401(k) contributions do not create this gap because they are after tax.
When should I receive my W-2 form?
Employers must furnish W-2 forms to employees by January 31 following the tax year, and file copies with the Social Security Administration by the same date. For the 2025 tax year, the deadline is February 2, 2026, because January 31 falls on a Saturday. If you have not received it by mid-February, contact your employer, then the IRS if it still does not arrive.
What is the difference between a W-2 and a 1099?
A W-2 goes to employees and reports wages with taxes already withheld for income, Social Security, and Medicare. A 1099 (most often Form 1099-NEC) goes to independent contractors and reports payments with no tax withholding, meaning the contractor owes self-employment tax and estimated taxes. Your worker classification, not your job title, determines which form you receive.
What does Box 12 code DD mean, and does it affect my taxes?
Code DD reports the total cost of your employer-sponsored health coverage, combining the employer and employee shares of the premium. It is informational only and does not change your taxable income or your refund. The IRS uses it to track coverage costs under the Affordable Care Act. You do not enter it as income or deduct it.
Why don’t my Box 16 state wages match Box 1?
States define taxable wages independently of the federal rules, so Box 16 can be higher or lower than Box 1. Some states tax 401(k) deferrals that the federal system defers, and some exclude items the federal system taxes. If you worked in multiple states, each state’s row in boxes 15 through 17 reports only the wages sourced to that state, which can also cause a mismatch.
What is the maximum Social Security tax that can appear in Box 4?
For the 2025 tax year, Box 3 (Social Security wages) is capped at the $176,100 wage base, so Box 4 (Social Security tax withheld) should not exceed $10,918.20, which is 6.2% of $176,100. If you held more than one job and your combined Box 4 amounts exceed that figure, you may claim the excess as a credit on Schedule 3 of your Form 1040.
What do I do if my W-2 is wrong?
Contact your employer and request a corrected form, Form W-2c. Common errors include a wrong Social Security number, a misspelled name, or an incorrect wage amount. Do not file your return with a known-incorrect W-2 if you can get a W-2c in time. If your employer will not correct it, you can contact the IRS, which may issue a substitute form process (Form 4852).
For related filing topics, see how wages and business income flow through the pass-through economy, how employers compute the taxes behind boxes 3 through 6 in the payroll tax report, and how the wage figure feeds broader filing behavior in the tax filing season report. If you sold stock or crypto during the year, the reporting mechanics differ from wages; see the Form 8949 instructions. And for the century-long context of the return your W-2 feeds, see the evolution of Form 1040.
Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.