The W-2 form is one of the most important tax documents you receive each year. It reports your wages and the taxes withheld from your paycheck. Understanding what each W-2 box means helps you file accurately, avoid IRS issues, and potentially maximize your refund. Let’s go box by box:
Boxes 1–6: Income and Withholding
-
Box 1: Wages, Tips, Other Compensation – Your total taxable income for federal taxes, excluding pre-tax deductions like 401(k) contributions.
-
Box 2: Federal Income Tax Withheld – The amount of federal tax withheld from your paycheck.
-
Box 3: Social Security Wages – Income subject to Social Security tax (capped annually).
-
Box 4: Social Security Tax Withheld – Tax withheld for Social Security (6.2% of Box 3 up to the annual limit).
-
Box 5: Medicare Wages and Tips – Income subject to Medicare tax (no cap).
-
Box 6: Medicare Tax Withheld – Tax withheld for Medicare (1.45% of Box 5, plus 0.9% for high earners).
👉 Related: How to Avoid IRS Penalties with Accurate Reporting.
Boxes 7–8: Tips and Allocations
-
Box 7: Social Security Tips – Tips reported to your employer, subject to Social Security tax.
-
Box 8: Allocated Tips – Tips your employer assigns based on IRS rules, even if not reported in your paycheck.
Boxes 9–11: Special Cases
-
Box 9: Not currently used.
-
Box 10: Dependent Care Benefits – Employer-sponsored childcare benefits (up to $5,000 tax-free).
-
Box 11: Nonqualified Plans – Distributions from nonqualified retirement plans (may be taxable).
👉 Learn more: Form 1099-R: Reporting Retirement Distributions.
Boxes 12–14: Additional Compensation & Benefits
-
Box 12: Codes for pre-tax deductions, retirement contributions, and benefits (401(k), HSA, etc.).
-
Box 13: Indicates statutory employee, retirement plan participation, or third-party sick pay.
-
Box 14: Miscellaneous items like union dues, tuition assistance, or other employer-provided benefits.
Boxes 15–20: State and Local Taxes
-
Box 15: Employer’s state tax ID.
-
Box 16: State taxable wages.
-
Box 17: State income tax withheld.
-
Box 18: Local taxable wages.
-
Box 19: Local tax withheld.
-
Box 20: Local tax jurisdiction.
👉 Related: State-Specific 1099-K Thresholds Explained.
Why the W-2 Matters
Your W-2 form directly impacts how much tax you owe or how much you’ll get back in a refund. Double-check every box for accuracy. If something looks wrong, ask your employer for a corrected W-2 before filing.
👉 Need to file electronically? Explore our W-2 Filing Software.