Your W-2 arrives in the mail or your payroll portal, and it looks like a puzzle. Twenty numbered boxes, a few letters, and figures that don't match your paycheck. Box 1 is smaller than your salary. Box 3 is bigger than Box 1. Box 12 has a code you have never seen.
Take a breath. Every box has a simple job, and once you know it, the form reads like a receipt for your year of work. This guide walks through each box in order, explains why the numbers differ, shows how to use the form when you file, and covers what to do when something looks wrong. It covers US federal tax forms for employees. State and local rules vary.
What Is a W-2 and How Do You Read It?
A W-2 (Wage and Tax Statement) is the form your employer gives you each year to report your wages and the taxes withheld from them. To read it, start with Box 1 (taxable wages), Box 2 (federal income tax withheld), and Boxes 3 to 6 (Social Security and Medicare), then check Box 12 for benefit and retirement codes and Boxes 15 to 20 for state and local taxes. You use these numbers to file your Form 1040.
The short answers:
- What is the most important box? For most people, Box 1 (wages for income tax) and Box 2 (federal tax withheld), because they feed straight into your return.
- Why is Box 1 lower than my salary? Pre-tax deductions, such as traditional 401(k) contributions and certain health benefits, are left out of Box 1.
- Why are Boxes 1, 3, and 5 different? Each box applies different tax rules, so the amounts can differ.
- Do I attach it to my return? If you e-file, you enter the numbers. If you mail a paper return, you generally attach Copy B.
- What if it's wrong? Contact your employer. They can issue a corrected form, Form W-2c.
What Is a W-2 Form?
The W-2 is an annual summary your employer must provide for each employee who earned wages. It reports how much you were paid, how much tax was withheld, and certain benefits. Your employer also sends a copy to the Social Security Administration, and the IRS receives the information too. That is why the numbers on your return should match your W-2.
The IRS page on Form W-2 explains the form's purpose, and the IRS General Instructions for Forms W-2 and W-3 explain every box from the employer's side. Reading both helps you see what your employer was told to put in each field.
When Should You Receive It?
Employers generally must furnish W-2s to employees and file with the Social Security Administration by January 31. When that date falls on a weekend, the deadline moves to the next business day. The SSA's W-2 filing deadlines page has current dates. A W-2 for tax year 2025 arrives in early 2026, and a W-2 for tax year 2026 arrives in early 2027. Don't mix them up.
Copies of the W-2
Your form usually has several copies. Copy B goes with your federal return if you file on paper, Copy C is for your records, and Copy 2 goes with your state return. Keep Copy C somewhere safe.
Top of the Form: Employee and Employer Information
Before the money boxes, check the identification fields. Errors here cause filing problems.
- Box a: Employee's Social Security number. Check every digit. Some employers print only the last four digits on your copy.
- Box b: Employer identification number (EIN). The nine-digit number that identifies your employer for tax purposes.
- Box c: Employer's name, address, and ZIP code.
- Box d: Control number. An optional internal code your employer uses. You can ignore it.
- Boxes e and f: Your name and address. Make sure they are correct and current.
If your Social Security number or name is wrong, tell your employer right away. Mismatches can delay your refund.
How to Read W-2 Boxes 1 to 20
Here is each box in order, with plain-English meaning and a quick check you can do.
Box 1: Wages, Tips, and Other Compensation
What it is: The amount of your pay that is subject to federal income tax. This is the number you generally report as wages on Form 1040.
Why it surprises people: Box 1 is not your gross salary. It leaves out pre-tax deductions, such as:
- Traditional 401(k), 403(b), and similar retirement deferrals
- Pre-tax health, dental, and vision premiums (cafeteria plan)
- Health savings account contributions made through payroll
- Dependent care FSA contributions
- Some commuter benefits
Quick check: Start with your annual gross pay, subtract those pre-tax items, and compare the result with Box 1. If it's close, you're probably fine.
Box 2: Federal Income Tax Withheld
What it is: The total federal income tax your employer withheld from your paychecks during the year. This is a payment toward your tax bill, not your final tax.
How it works: When you file, you compare Box 2 to your actual tax. If more was withheld than you owe, you get a refund. If less, you pay the difference. You can adjust your withholding with the IRS Tax Withholding Estimator and a new Form W-4.
Box 3: Social Security Wages
What it is: The wages subject to Social Security tax. It is capped each year at the Social Security wage base.
Why it differs from Box 1: Traditional 401(k) deferrals are left out of Box 1 but included in Box 3, so Box 3 is often higher. It also stops growing once you pass the annual wage base. For the current figure, check IRS Publication 15. For 2026, the wage base is $184,500 according to the figures in your research, so confirm it before quoting.
Box 4: Social Security Tax Withheld
What it is: The Social Security tax withheld from your pay. The employee rate is 6.2% of Box 3 wages, up to the wage base.
Quick check: Multiply Box 3 by 6.2%. The result should match Box 4, give or take rounding.
Box 5: Medicare Wages and Tips
What it is: The wages subject to Medicare tax. Unlike Social Security, Medicare wages generally have no wage cap.
Why it can be larger than Box 3: High earners who exceed the Social Security wage base keep paying Medicare tax, so Box 5 can be higher than Box 3.
Box 6: Medicare Tax Withheld
What it is: The Medicare tax withheld from your pay. The standard employee rate is 1.45% of Box 5 wages.
Additional Medicare Tax: Employers must withhold an extra 0.9% on wages above $200,000, and this can appear in Box 6. Your actual Additional Medicare Tax liability depends on your filing status, so the employer withholding threshold isn't the same as your own threshold. See IRS Topic 751 for details.
Box 7: Social Security Tips
What it is: Tips you reported to your employer that are subject to Social Security tax. This box matters mostly for restaurant, hospitality, and other tipped workers.
Box 8: Allocated Tips
What it is: Tips your employer assigned to you based on a formula, usually because reported tips fell short of a required level. These are not included in Box 1. You generally must report allocated tips as income yourself. Ask your employer or a tax professional if this box has an amount.
Box 9: Blank or Reserved
Box 9 is currently not used for any amount. If you see something in it, ask your employer what it means rather than assuming it is a wage or tax figure.
Box 10: Dependent Care Benefits
What it is: The total dependent care benefits your employer paid to you or on your behalf, such as through a dependent care FSA. There is an annual exclusion limit, and amounts above it can be taxable. You may need to complete Form 2441 when you file.
Box 11: Nonqualified Plans
What it is: Distributions from a nonqualified deferred compensation plan. This is uncommon, and the tax treatment is specific. If you see an amount, ask a tax professional.
Box 12: Codes and Amounts
Box 12 has up to four entries. Each has a letter code and a dollar amount. The letter tells you what the amount is. Common codes include:
- Code D: Elective deferrals to a traditional 401(k)
- Code E: Elective deferrals to a 403(b)
- Code G: Elective deferrals to a 457(b)
- Code AA: Designated Roth contributions to a 401(k)
- Code BB: Designated Roth contributions to a 403(b)
- Code W: Employer contributions to your health savings account, including pre-tax payroll contributions
- Code DD: The cost of employer-sponsored health coverage
- Code C: Taxable cost of group-term life insurance over $50,000
- Code P: Moving expense reimbursements for certain military members
- Code S: Employee salary reduction contributions to a SIMPLE plan
This is a partial list. The full set of codes and their meanings is in the IRS W-2/W-3 instructions, and the IRS also summarizes retirement plan codes. Codes change over time, so always check the current list.
Code DD deserves a special note. It shows the total cost of your employer-sponsored health coverage, including what you and your employer paid. It is informational. It does not mean that amount is taxable income or an extra tax bill.
Do you need to report Box 12 on your return? Some codes affect your return, and some are informational. Your tax software prompts you for the ones that matter, so enter them as printed.
Box 13: Checkboxes
There are three checkboxes:
- Statutory employee: You are treated as an employee for some purposes but report income and expenses as self-employed.
- Retirement plan: Checked if you were an active participant in an employer retirement plan. This can affect whether you can deduct traditional IRA contributions.
- Third-party sick pay: Checked if a third party paid sick pay.
Box 14: Other
What it is: A free-text area your employer can use for extra information, such as union dues, state disability insurance, health insurance premiums, or parking benefits.
Important: Not every Box 14 entry affects your federal taxes. If you see unfamiliar codes, ask your payroll department. Don't assume an amount is deductible or taxable.
Boxes 15 to 20: State and Local Information
These boxes cover state and local taxes. They can appear in more than one row if you worked in more than one place.
- Box 15: State and employer's state ID number. The state where you worked and your employer's state tax ID.
- Box 16: State wages, tips, etc. Wages subject to state income tax. This can differ from Box 1 because states follow different rules.
- Box 17: State income tax withheld.
- Box 18: Local wages, tips, etc. Wages subject to local income tax.
- Box 19: Local income tax withheld.
- Box 20: Locality name. The city, county, or school district.
If you live in a state without income tax, such as Texas or Florida, these boxes may be blank. See our guides on states with no income tax in 2026 and Texas income tax. For states that do tax income, see state income tax in 2026, California income tax rates, and New York state income tax.
Does Box 16 show your take-home pay? No. Box 16 shows taxable wages for the state. It is not net pay.
Box 1 vs. Box 3 vs. Box 5: Why Your Wages Are Different
This is the most common source of confusion, so here is the logic behind it.
- Box 1 is wages subject to federal income tax. Pre-tax retirement deferrals and many pre-tax benefits reduce it.
- Box 3 is wages subject to Social Security tax. Traditional 401(k) deferrals do not reduce it, but the annual wage base caps it.
- Box 5 is wages subject to Medicare tax. It generally has no cap.
An illustrative example: Imagine you earn $60,000, contribute $5,000 to a traditional 401(k), and pay $2,000 in pre-tax health premiums.
- Box 1 might show about $53,000, because both the 401(k) and the health premiums are removed.
- Box 3 might show about $58,000, because the 401(k) is added back for Social Security, but pre-tax health premiums under a cafeteria plan are not.
- Box 5 would usually match Box 3 here, around $58,000.
These numbers are simplified. Your exact amounts depend on your benefits and plan rules. The point is that different boxes are supposed to differ, and a gap is not automatically an error.
When Boxes 3 and 5 Differ
Box 5 can exceed Box 3 when your pay passes the Social Security wage base. After that, Social Security tax stops and Medicare tax keeps going.
A Worked Example: Reading a Full W-2 From Top to Bottom
This is an illustrative scenario, not tax advice. All figures are made up.
The situation: Priya works as an office coordinator. Her W-2 shows these amounts:
- Box 1: $52,400
- Box 2: $4,300
- Box 3: $57,400
- Box 4: $3,559
- Box 5: $57,400
- Box 6: $832
- Box 12, Code D: $5,000
- Box 12, Code DD: $8,200
- Box 16: $57,400
- Box 17: $2,100
How she reads it:
- Box 1 vs. Box 3. The $5,000 difference matches her Code D 401(k) deferral. Traditional 401(k) deferrals lower Box 1 but not Box 3, so the gap makes sense.
- Box 4 check. 6.2% of $57,400 is about $3,559, which matches.
- Box 6 check. 1.45% of $57,400 is about $832, which matches.
- Box 12, Code DD. She sees $8,200 and relaxes. It shows the total cost of her employer health coverage and isn't extra income.
- Box 16. State wages equal Box 3 here, so her state follows different rules from federal taxable wages. She can confirm that on her state's instructions.
- Filing. She enters Box 1 as wages and Box 2 as federal tax already paid. Box 17 goes on her state return.
What she learns: Every number has a reason, and the quick math checks catch typos before they become problems.
How to Use Your W-2 When Filing Taxes
Here's the simple path.
- Gather every W-2. If you had more than one job, you'll have more than one form.
- Check names, Social Security numbers, and addresses.
- Enter Box 1 wages on your return. Tax software asks box by box.
- Enter Box 2 federal withholding as tax already paid.
- Enter Boxes 3 to 6 if the software asks for them.
- Enter Box 12 codes and amounts exactly as shown.
- Enter state and local boxes for each state or locality listed.
- Review the result and compare it with your expectations.
- File on time.
For a rough estimate before you file, try the Income Tax Calculator and the Salary Tax Calculator. They give estimates, not official figures. If you worked in more than one state, the US State Income Tax Calculator helps with the state side.
If You Have More Than One W-2
Report all of them. Each employer reports separately, so add every Box 1 and Box 2 together when you file. Tax software usually lets you enter each form in turn. If you changed jobs, you may also see the Social Security wage base counted separately by each employer. If total Social Security tax withheld went over the limit, you may be able to claim the excess on your return.
Do You Need to Attach Your W-2?
If you file electronically, you generally don't attach it, but you enter the information from it. If you file on paper, you attach Copy B. Keep Copy C for your records.
W-2 vs. Pay Stub: How to Compare Your Year
A pay stub shows each pay period. A W-2 shows the year. To check them against each other:
- Take your final pay stub of the year, which shows year-to-date totals.
- Compare year-to-date gross pay with the sum of Box 1 plus pre-tax deductions.
- Compare year-to-date federal withholding with Box 2.
- Compare year-to-date Social Security and Medicare with Boxes 4 and 6.
Differences usually trace back to pre-tax deductions or taxable benefits. If the gap is large and unexplained, ask your payroll department. Our guide on gross pay vs. net pay explains how deductions shape your paycheck.
W-2 vs. 1099 vs. W-4: Quick Differences
- W-2: a year-end report of wages and taxes for an employee.
- W-4: a form you give your employer so they know how much federal tax to withhold from each paycheck.
- 1099-NEC: a form for independent contractors, reporting payments received without tax withholding.
- Form 1040: your own tax return, which uses the figures from your W-2.
Contractors handle taxes differently, including self-employment tax. Read the comparison of W-2 vs. 1099 tax calculation, the 1099 reporting threshold, and self-employment tax vs. income tax. If you have side income too, see side hustle taxes in 2026 and the US Self-Employment Tax Calculator.
What to Do If Your W-2 Is Wrong or Missing
If It Has an Error
Look for typos in your name, Social Security number, wages, or withholding. Then:
- Contact your employer and explain the problem. Ask them to check payroll records.
- Ask for a corrected form. If the original was wrong, the employer issues Form W-2c.
- Don't file until it is resolved, if you can. If the deadline is near, call the IRS for guidance on how to proceed.
- Keep records of your requests, including dates.
If You Haven't Received It
- Check your payroll portal. Many employers provide W-2s online.
- Confirm your mailing address with your employer.
- Wait until early February, then contact your employer.
- If it still hasn't arrived, contact the IRS, which can follow up with your employer and may advise using Form 4852 as a substitute if needed.
- Use your final pay stub to estimate figures while you wait.
You can also see what employers reported through an IRS transcript. Our guide on how to file taxes for previous years covers missing documents for older years.
If Something Looks Unusual
- Box 1 is blank or zero. It may be correct if all your pay was pre-tax or you had no wages. Ask your employer.
- Box 2 is blank. That means no federal income tax was withheld. Check your W-4, since you may owe tax when you file.
- Box 14 has an unfamiliar code. Ask payroll what it means.
- State boxes list the wrong state. Remote workers sometimes see this. Talk to your employer about where taxes were withheld.
Special Situations
Remote Workers and Multiple States
If you worked in more than one state, you may see several state lines in Boxes 15 to 20. Each state has its own rules on where you owe tax, and credits may avoid double taxation. Check each state's instructions.
Tipped Employees
Boxes 7 and 8 matter. Make sure tips you reported are included, and check Box 8 for allocated tips you may need to report as income.
First-Time Filers
Your first W-2 can feel overwhelming. Start with Boxes 1 and 2, then work through the rest using this guide. Check whether you can use the standard deduction, and read our explanation of standard vs. itemized deductions in 2026. Our essential tax terms glossary can help with unfamiliar words.
Parents and Dependents
Dependent care benefits in Box 10 and credits like the Child Tax Credit can affect your return. Review them before filing.
Nonresident Aliens and International Workers
If you are not a US citizen or resident, special rules may apply. Read about US tax residency in 2026, and talk to a qualified professional.
Keep Your Records Safe
Keep your W-2 and tax return copies for at least three years, and longer in some cases. Scanning and combining files into one document makes them easy to find. See how to combine tax documents into one PDF. Also read about IRS audit triggers to understand why accuracy matters, and income tax calculator mistakes so you can avoid common errors.
Common Mistakes to Avoid
- Assuming Box 1 equals your salary. It excludes pre-tax deductions.
- Treating Box 2 as your final tax. It's a payment, not the bill.
- Thinking Code DD is taxable. It's informational.
- Ignoring a second W-2. Report every one.
- Mixing up tax years. Use the right year's form and figures.
- Entering numbers from a pay stub instead of the W-2. Use the W-2.
- Skipping the name and SSN check. Mismatches delay refunds.
- Filing before correcting an error. Ask for Form W-2c first.
- Assuming Box 14 amounts are deductible. Many aren't.
- Forgetting state and local boxes. They feed your state return.
Why Choose Free Calculator
Tax forms feel easier when you can test the numbers. Free Calculator offers free tools, plain-language guides, and no paywall for basic estimates.
- Free tools to estimate income tax, state tax, and self-employment tax
- Guides that match the tools, so you understand the result, not just the number
- Regular reviews as tax rules and IRS guidance change
- Official sourcing, so you can verify details yourself
Learn more on the About page, meet the author at Noor Lodhi's profile, and read our disclaimer. Browse the tools page and the tax blog.
Explore Advanced Free Calculator tools, including the Salary Tax Calculator, US State Income Tax Calculator, and US Self-Employment Tax Calculator.
Frequently Asked Questions
What is a W-2 form and why do I receive one?
A W-2 is the Wage and Tax Statement your employer gives you each year. It reports your wages and the taxes withheld so you can file your federal and state returns.
What does Box 1 mean on my W-2?
Box 1 shows wages, tips, and other compensation subject to federal income tax. It leaves out pre-tax deductions, so it is often lower than your gross pay.
Why is Box 1 lower than my gross salary?
Pre-tax deductions, such as traditional 401(k) contributions and certain health premiums, are not counted in Box 1. They reduce your taxable wages.
What is the difference between Box 1 and Box 3?
Box 1 covers wages for federal income tax. Box 3 covers wages for Social Security tax, is capped at the annual wage base, and usually includes traditional 401(k) deferrals that Box 1 leaves out.
What does Box 2 tell me about my taxes?
Box 2 shows the federal income tax your employer withheld. It is a prepayment toward your tax bill, not your final tax.
Why are Social Security wages different from Medicare wages?
Social Security wages are capped at an annual limit, while Medicare wages generally have no cap. High earners therefore often see Box 5 higher than Box 3.
What does Box 12 Code D mean?
Code D shows your elective deferrals to a traditional 401(k) plan.
What does Code DD mean on a W-2?
Code DD shows the total cost of your employer-sponsored health coverage. It is for information and is not extra taxable income.
What does Box 13 indicate?
Box 13 has three checkboxes: statutory employee, retirement plan participation, and third-party sick pay.
Why does my W-2 show more than one state?
You may have worked in, or had taxes withheld for, more than one state during the year. Each appears on its own line in Boxes 15 to 20.
Does Box 16 show my take-home pay?
No. Box 16 shows wages subject to state income tax, not net pay.
Can I file taxes if my W-2 has incorrect information?
It's best to get it corrected first. Ask your employer for a corrected Form W-2c. If time is short, contact the IRS for guidance.
What happens if I receive multiple W-2 forms?
You report all of them. Add each form's wages and withholding to your return.
Do I need to attach my W-2 when filing electronically?
Generally no. You enter the figures from it. For a paper return, you attach Copy B.
When should my employer send me a W-2?
Generally by January 31, or the next business day if that date falls on a weekend or holiday.
How do I get a replacement W-2?
Ask your employer first, and check any payroll portal. If you still can't get it, contact the IRS for help.
Key Takeaways and Next Steps
Your W-2 is a summary of your year at work, and each box has a clear purpose.
- Start with Boxes 1 and 2: taxable wages and federal tax withheld.
- Expect differences between Boxes 1, 3, and 5. They follow different rules.
- Do quick math checks on Boxes 4 and 6 to catch typos.
- Read Box 12 by code, not just by amount.
- Treat Code DD as information, not taxable income.
- Check state and local boxes for your state return.
- Fix errors before filing, using Form W-2c.
- Keep your records safe.
What to do this week:
- Check your name, Social Security number, and address on your W-2.
- Compare Box 1 and Box 2 with your final pay stub.
- Run an estimate with the Income Tax Calculator.
- Review your withholding with the IRS Tax Withholding Estimator, and adjust your W-4 if needed.