Form W-2 is an annual “Wage and Tax Statement” that reports to you and the Internal Revenue Service (IRS) your taxable income received from an employer. The form also includes information about taxes withheld from your wages and Social Security and Medicare payments made on your behalf by both you and your employer.
Definition and Example of Form W-2
Income is reported to recipients as well as the IRS in a series of information forms each year. Form W-2 is used only for employee income from which taxes were withheld and informs them about the income they must report on their tax returns and about payments that have already been made through withholding.
Form W-2 also informs the IRS about what income an employee received and confirms how much they paid in taxes.
Who Uses Form W-2?
Employees are required to report all wages they received on their annual tax returns. Form W-2 is issued by the employer, whether you work full-time or part-time, if you earned $600 or more in income from that company during the tax year.
You should receive three copies of Form W-2 (Copies B, C, and 2) detailing what you were paid and what was withheld:
- Copy A: Filed with the Social Security Administration by your employer.
- Copy B: Attach to your federal income tax return if you mail it. Keep it with other tax documents for at least four years if you file electronically.
- Copy C: Keep with your tax documents for at least four years. This is officially your copy.
- Copy 2: Attach to your state tax return if you mail it. Otherwise, keep it with your tax documents for at least four years, like Copy B.
Where to Get Form W-2
Employers must prepare Form W-2 for each eligible employee, mail or personally deliver Form W-2 to you no later than January 31 for the previous tax year, and provide copies to the IRS and Social Security Administration.
Example: January 31, 2026, for 2025 income.
What to Do If You Don’t Receive Form W-2
Ask your employer when Forms W-2 were sent to employees. If you haven’t received yours by mid-February, request another printed copy of Form W-2 (some employers may charge a nominal fee for providing an additional copy).
You can contact the IRS for help at 800-829-1040 if your employer didn’t send Form W-2 or refuses to issue it to you. Make sure you have certain information at hand, including:
- Your employer’s name and full address.
- Your employer’s phone number.
- Your employer’s Employer Identification Number (EIN), if you know it.
You should also provide at least an approximate amount of wages you earned, federal income tax withheld, and start and end dates of employment if you no longer work there. This information is on your pay stubs.
Note: The IRS may suggest you file Form 4852 with your tax return if you cannot obtain Form W-2 from your employer. This form substitutes for Form W-2.
Corrections: You have the right to ask your employer to correct any incorrect information on your Form W-2 if:
- Your Social Security number is listed incorrectly.
- Your name is spelled incorrectly.
- Your wages and withheld amounts are inaccurate.
How to Read Form W-2: Box-by-Box Instructions
All Boxes from A to F contain identifying information: your Social Security number, your employer’s Taxpayer Identification Number or EIN, all addresses, and your full legal name. Box D is a control number that identifies your unique Form W-2 document in your employer’s records.
The numbered boxes on Form W-2 contain information about your financial status:
- Box 1: Shows your total taxable wages, any tips you reported to your employer, bonuses and other taxable income, and taxable fringe benefits (group term life insurance). Box 1 does not include any pre-tax benefits, retirement contributions to a 401(k) plan, 403(b) plan, or health insurance. The number from Box 1 goes on line 1 of Form 1040 for 2025.
- Box 2: Shows how much your employer withheld from your wages as federal income taxes (on line 25a of Form 1040).
- Box 3: Reports the total amount of your wages subject to Social Security tax. This tax is collected on wages up to $176,100 as of the 2025 tax year and increases to $184,500 in 2026. This “wage base” is adjusted annually for inflation. Contact your employer if Box 3 shows an amount exceeding the wage base. Tips you reported to your employer are shown in Box 7, not Box 3.
- Box 4: Shows the amount of Social Security taxes withheld from your wages. The amount shown in Box 4 should be no more than $10,918.20 for 2025, since Social Security tax is a flat tax rate of 6.2% of your wage earnings up to the wage base of $176,100.
- Box 5: Shows the amount of your wages subject to Medicare tax. There is no maximum wage base for Medicare.
- Box 6: Shows how much tax was withheld from your wages as Medicare tax. This is a flat tax rate of 1.45% of your Medicare wages for the 2025 tax year. Medicare tax increases by 0.9% for high earners, so the amount in Box 6 may be more than the amount in Box 5 multiplied by 1.45% if you earn significant income.
- Box 7: Shows all tip income you reported to your employer (the box will be empty if you didn’t report any). Box 7 and Box 3 should add up to the amount shown in Box 1 if you have no pre-tax benefits, or it may be the same as shown in Box 5 if you received pre-tax benefits. The sum of boxes 7 and 3 should not exceed the Social Security wage base. The amount from Box 7 is already included in Box 1.
- Box 8: Shows tip income that was allocated to you by your employer. This amount is not included in wages shown in boxes 1, 3, 5, or 7; you must add them to taxable wages on line 1 of Form 1040. You must calculate Social Security and Medicare taxes by adding this tip income using IRS Form 4137.
- Box 10: Shows amounts you may have been reimbursed for dependent care expenses through a flexible spending account (FSA), or the amount of dependent care expenses provided to you by your employer. Reimbursements and services up to $5,000 are not taxable. Any amount over $5,000 must be shown as taxable wages in boxes 1, 3, and 5. Dependent care benefits are reported on Form 2441.
- Box 11: Shows any distributions made to you under your employer’s non-qualified deferred compensation plan or under Section 457 of a non-governmental retirement plan. The amount in Box 11 is already included in taxable wages in Box 1.
- Box 12: (See below for new codes).
- Box 13: Has checkboxes if you are a statutory employee. This means you must report wages from this Form W-2 and any other Forms W-2 you receive marked “statutory employee” on Schedule C of Form 1040. Your wages are not subject to income tax withholding if you see 0 or an empty field in Box 2. But earnings are subject to Social Security and Medicare tax, so boxes 3 through 6 should be filled; they will also be checked if you participated in your employer’s retirement plan during the tax year, received third-party sick pay under your employer’s insurance policy (sick pay is not included in your Box 1 wages, although it is usually subject to Social Security and Medicare tax).
- Box 14: (See below for changes).
- Box 15: Shows your employer’s state and the state’s taxpayer identification number.
- Box 16: Shows the total taxable wages you received in that state, and if you worked for the same employer in multiple states, brief information about that as well.
- Box 17: Shows the total amount of state income taxes withheld from your wages shown in Box 16 (these taxes may be deductible as part of the deduction for state and local income taxes on Schedule A of IRS Form 1040 if you itemize your federal deductions).
- Box 18: Shows wages subject to local, city, or other state income tax.
- Box 19: Shows the total amount of taxes withheld from your wages as local, city, or other state income taxes. This amount may also be deductible as part of the deduction for state and local income taxes if you itemize your federal deductions on Schedule A.
- Box 20: Provides a brief description of local, city, or other state taxes paid. The description may specify a particular city or state tax, for example, State Disability Insurance (SDI) payments.
New Provisions Under One Big Beautiful Bill Act (OBBBA)
According to the Budget Reconciliation Act of 2025 (H.R. 1), known as the One Big Beautiful Bill Act (OBBBA), we have the following new provisions:
1. Trump Accounts
New tax-advantaged accounts for children up to age 8.
- Contributions: Up to $5,000 per year (of which employer – up to $2,500, not taxable).
- Withdrawals: After age 18 (education, first home, business).
- Government plans: $1,000 for children born 2025–2028 (no income limits).
2. No Tax on Tips (2025–2028)
- Deduction for employees and self-employed in tipped professions.
- Up to $25,000 per year, with phase-out at high incomes.
- Tips must be reported on W-2/1099; may be taxed at state/local levels.
3. No Tax on Overtime (2025–2028)
- Temporary deduction for overtime: only “half” above standard rate.
- Limit $12,500 ($25,000 for joint return), with phase-out by income.
- Overtime must be reflected on W-2/1099.
Changes to Form W-2 for 2026
Therefore, Box 12 and Box 14 of Form W-2 for 2026 have been updated compared to 2025.
New Codes in Box 12: The new draft Form W-2 includes three new codes in Box 12:
- TA: Employer contributions to Trump Accounts.
- TP: Total Qualified Tips (No Tax on Tips).
- TT: Total Qualified Overtime (No Tax on Overtime).
Changes to Box 14: Box 14 is a catch-all. Your employer reports here anything that doesn’t fit into other categories. For example: withheld state disability insurance taxes, union dues, health insurance deductions, and non-taxable income. This information will now be reported in Box 14a.
New Box 14b will be used to indicate the profession code for employees receiving tips. Remember that No Tax on Tips is available only to taxpayers whose professions are on the IRS list (as of December 31, 2024).
How to File Form W-2
Enter the amounts in each box on the corresponding line of your tax return. Add the boxes together if you are married and filing jointly, if both you and your spouse have Forms W-2.
Key Takeaways
- Form W-2 reports income from employment and taxes withheld from that income to both the employee and the IRS.
- Employees use this information to prepare their annual tax returns.
- Generally, employers must send employees Forms W-2 for the previous tax year by January 31.
- You can contact the IRS at 800-829-1040 if your employer doesn’t provide you with Form W-2 by mid-January of the current year.
How Can Gennadiy Arnautov CPA Help with Form W-2?
Form W-2 is the foundation of your tax return, and even small errors in it can lead to delays or problems with the IRS. Our specialists will help:
- Verify the accuracy of data on Form W-2 (wages, taxes, contributions).
- Identify possible errors or discrepancies with other forms.
- Correctly include information from W-2 in your tax return.
- Explain how wage income affects tax benefits and credits.
Don’t risk mistakes in basic forms! Proper handling of Form W-2 is the first step to accurate and beneficial tax reporting.
