Your W-2 is a one-page summary of what your employer paid you and what it withheld in taxes during the year, and learning how to read your W-2 tax form comes down to knowing what each numbered box reports and where that number goes on your return. Employers must send the form by January 31, and the same figures your employer prints for you also go to the IRS and the Social Security Administration.1Internal Revenue Service. General Instructions for Forms W-2 and W-3 When you file, you transfer these numbers onto your Form 1040 exactly as printed.
The Identification Boxes (a Through f)
Box a is your Social Security number, and it needs to be right. This is how the SSA tracks your lifetime earnings, and a wrong digit can credit your wages to someone else’s record and affect your future benefits. Box b is your employer’s nine-digit Employer Identification Number.2Internal Revenue Service. Publication 1635 – Understanding Your EIN Box c is your employer’s name and address, and Boxes e and f show your legal name and mailing address.
The name in Box e has to match SSA records. If you changed your name through marriage or a court order and never told the SSA, that mismatch can hold up your return. Box d is an internal payroll control number. You can ignore it.
Federal Wages and Withholding: Boxes 1 and 2
Box 1 shows your total taxable wages, tips, and other compensation for federal income tax purposes. It is almost always smaller than your gross pay, sometimes by a lot, because pretax items are subtracted before this figure is calculated. Traditional 401(k) contributions, health insurance premiums, flexible spending account contributions, and HSA contributions all come out before the number lands in Box 1.
Box 2 is the federal income tax your employer already sent to the IRS on your behalf during the year. It is a running prepayment against the tax you actually owe. When you file, the IRS compares your final tax bill to the Box 2 amount; if you overpaid, you get a refund, and if you underpaid, you write a check. The Box 2 figure reflects the choices you made on your Form W-4 — filing status, dependents, and any extra amount you asked to have withheld each pay period.3Internal Revenue Service. Form W-4 Employees Withholding Certificate A surprisingly large refund or an unexpected balance due is usually a signal to update your W-4.
Social Security and Medicare: Boxes 3 Through 6
Box 3 shows the wages subject to Social Security tax, and Box 4 shows the Social Security tax withheld at 6.2%. Social Security has a wage ceiling. For 2026, only the first $184,500 of earnings is taxed, so Box 3 caps at $184,500 and Box 4 caps at $11,439.4Social Security Administration. Contribution and Benefit Base If you earned above the cap, expect to see those exact numbers.
Box 5 reports wages subject to Medicare tax, and Box 6 is the tax withheld at 1.45%.5Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates Medicare has no wage cap. Every dollar you earn is taxed. An extra 0.9% Additional Medicare Tax applies once wages cross $200,000 for single filers, $250,000 for married filing jointly, or $125,000 for married filing separately.6Internal Revenue Service. Questions and Answers for the Additional Medicare Tax Your employer starts withholding the extra 0.9% once your pay passes $200,000 regardless of filing status; any correction for a different threshold happens when you file.
Why Boxes 1, 3, and 5 Rarely Match
Three different wage numbers on the same form is normal. Each box starts from your gross pay but applies different exclusions. Traditional 401(k) contributions reduce Box 1 but not Boxes 3 or 5, because retirement deferrals still owe payroll tax. Health insurance premiums run through a cafeteria plan reduce all three. And the Social Security wage cap puts a ceiling on Box 3 that Boxes 1 and 5 don’t have. Different numbers, by design.
Tips and Other Income: Boxes 7 Through 11
Most people will see these blank. If they aren’t, here is what they mean.
Box 7 is Social Security tips — the tip income you reported to your employer. Box 8 is allocated tips, amounts your employer assigned to you when your reported tips fell short of a minimum, often based on total sales. Allocated tips are not in Boxes 1, 3, 5, or 7, but you still owe income and payroll tax on them and report them using Form 4137.
Box 10 is total dependent care benefits from your employer, either through a dependent care FSA or direct assistance. Amounts above the annual exclusion limit get added back into Box 1, and you use Form 2441, Part III to work out how much stays tax-free.7Internal Revenue Service. Employee Reimbursements, Form W-2, Wage Inquiries Box 11 is a nonqualified deferred compensation distribution. Most employees never see anything here; if you do, that income is also included in Box 1.
Box 12: The Letter Codes
Box 12 uses letter codes to report specific benefits and special compensation, and the form has room for up to four. The codes you’re most likely to see:
- Code D: elective deferrals to a traditional 401(k). Reduces Box 1 but not Boxes 3 or 5.
- Code E: elective deferrals to a 403(b), common in education and nonprofit jobs.
- Code AA: Roth 401(k) contributions. These don’t reduce Box 1 because they’re after-tax.
- Code W: combined employer and employee HSA contributions. Anything above the annual limit is taxable.
- Code DD: the total cost of your employer-sponsored health coverage, employer share plus employee share. This is informational only. It doesn’t touch your tax return.8Internal Revenue Service. Form W-2 Reporting of Employer-Sponsored Health Coverage
- Code C: the taxable value of employer-provided group-term life insurance above $50,000, already included in Box 1.
Other codes cover items from combat pay to adoption assistance. The full reference chart lives in the IRS instructions for Forms W-2 and W-3.1Internal Revenue Service. General Instructions for Forms W-2 and W-3
Box 13 Checkboxes
There are three checkboxes here, and the “Retirement plan” box is the one that catches people off guard. A check means you were eligible to participate in an employer retirement plan during the year, even if you never contributed. That single mark can limit or eliminate your traditional IRA deduction depending on your income.9Internal Revenue Service. Common Errors on Form W-2 Codes for Retirement Plans
For 2026, the traditional IRA deduction phases out between $81,000 and $91,000 of modified adjusted gross income for single filers covered by a workplace plan, and between $129,000 and $149,000 for married couples filing jointly when the contributing spouse is covered.10Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 Above those ranges with the box checked, your traditional IRA contribution isn’t deductible, though you can still contribute or use a Roth IRA instead.
The “Statutory employee” box covers a narrow group — some delivery drivers, life insurance agents, and home-based workers — who report wages on Schedule C. “Third-party sick pay” means sick leave came from an insurance carrier rather than your employer directly. Most employees never see either checked.
Box 14: Other
Box 14 is a catch-all with no standardized codes. Employers pick their own labels. Common entries include union dues, state disability insurance (often shown as SDI), educational assistance, uniform allowances, and payroll-deducted charitable contributions. None of these change your federal tax directly, though some matter for your state return. If an abbreviation is unfamiliar, ask your payroll department what it stands for.
State and Local Taxes: Boxes 15 Through 20
Box 15 shows the state’s two-letter abbreviation and your employer’s state tax ID. Box 16 is your state taxable wages, which can differ from Box 1 because state rules on taxable income vary. Box 17 is state income tax withheld, and that’s the number you use on your state return.
Boxes 18, 19, and 20 handle cities, counties, or school districts with their own income tax: local taxable wages, local tax withheld, and the name of the locality. If you worked in more than one state or locality, you may get multiple lines here, or separate W-2s for each state.
If Your W-2 Is Missing or Wrong
If January ends with no W-2, start with your employer. Confirm your address is current and ask when the form was sent or posted online. If nothing arrives by mid-February, call the IRS at 800-829-1040 with your name, address, Social Security number, dates of employment, and your employer’s contact information. The IRS will reach out to the employer.11Internal Revenue Service. If You Dont Get a W-2 or Your W-2 Is Wrong
If filing day is closing in without a form, use Form 4852, Substitute for Form W-2. Estimate your wages and withholding from your final pay stub, complete the form, and mail it with a paper return.12Internal Revenue Service. About Form 4852, Substitute for Form W-2, Wage and Tax Statement Filing on time with a good-faith estimate beats filing late.
If the form arrives but has a wrong Social Security number, a misspelled name, or a bad wage figure, contact payroll right away and ask for a corrected form, Form W-2C.13Internal Revenue Service. About Form W-2 C, Corrected Wage and Tax Statements If your employer won’t fix it, Form 4852 also works as a substitute for an incorrect W-2 — you put in the accurate figures and explain the discrepancy.
When Your Return Doesn’t Match What the IRS Received
The IRS gets the same wage data your employer printed on your W-2 and runs automatic matching against your return. When something doesn’t line up, you’ll get a CP2000 notice proposing adjustments.14Internal Revenue Service. Understanding Your CP2000 Series Notice A CP2000 is a proposal, not a bill. You can agree, partly agree, or dispute it with documentation. Ignore it and the IRS eventually sends an actual bill with interest and possible penalties. The simplest way to avoid a CP2000 is to enter your W-2 figures exactly as printed even when a number looks off. Fix the W-2 through your employer first. Then file.