Form W-2 reports an employee's annual wages, benefits, and taxes withheld. Learn what the boxes mean, how to fix errors, and how California uses it.
Form W-2, Wage and Tax Statement, is the annual form an employer uses to report an employee's wages, certain benefits, Social Security and Medicare wages and taxes, and federal, state, and local income tax withholding. The employer gives copies to the employee and files the required information with the Social Security Administration.
A W-2 reports what happened during the calendar year. It does not calculate the employee's final tax liability. The employee uses the form to prepare federal and state tax returns, where withholding is credited against the tax calculated on the full return.
| Box | General purpose |
|---|---|
| 1 | Wages, tips, and other compensation subject to federal income tax |
| 2 | Federal income tax withheld |
| 3 | Social Security wages |
| 4 | Social Security tax withheld |
| 5 | Medicare wages and tips |
| 6 | Medicare tax withheld |
| 10 | Dependent-care benefits |
| 12 | Coded items such as retirement contributions and other benefits |
| 13 | Checkboxes including retirement-plan participation |
| 14 | Other employer-reported information |
| 15–17 | State, state wages, and state income tax |
| 18–20 | Local wages, tax, and locality |
The employee's name, Social Security number, employer name, employer identification number, and tax year should also be reviewed.
Boxes 1, 3, 5, and 16 measure wages under different tax systems. For example, a traditional pre-tax 401(k) contribution can reduce federal income-tax wages in box 1 while remaining included in Social Security and Medicare wages in boxes 3 and 5. Certain benefits or wage limits can also cause differences.
A difference is not automatically an error. It should be reconciled to payroll records, benefit elections, and the applicable wage rules.
Assume an employee earns $70,000 and contributes $5,000 to a traditional 401(k), with no other adjustment in this simplified example.
Box 1 may show $65,000, while boxes 3 and 5 may show $70,000. Box 12 may identify the $5,000 elective deferral with the applicable code. Federal and California withholding appear separately in boxes 2 and 17.
This example illustrates why the boxes need not match. Actual treatment depends on the benefit and payroll facts.
Form W-4 tells an employer how to calculate future federal income tax withholding. Form W-2 reports the wages and withholding that actually occurred during the year.
An employee may submit a new W-4 after a marriage, divorce, new child, second job, major deduction change, or unexpected tax bill. Updating the W-4 does not change an already issued W-2.
Employers generally must furnish Form W-2 by January 31, or the next business day when the date falls on a weekend or legal holiday. For 2025 forms, the calendar shifted the furnishing deadline to February 2, 2026.
An employee who has not received a W-2 should first contact the employer and verify the address. If it remains unavailable, the IRS provides procedures that can include contacting the IRS and using Form 4852 as a substitute based on reliable records. Filing too early with estimates can create amendment work when the official form differs.
Contact the employer promptly. An employer generally corrects a filed W-2 using Form W-2c. Common issues include an incorrect Social Security number, name, wage amount, withholding amount, state code, or benefit code.
Do not change the W-2 yourself. Keep the original, corrected form, pay statements, and correspondence. If the tax return was filed using incorrect information, an amended return may be required.
Federal wages from Form W-2 feed the wage lines on Form 1040. Federal withholding is reported in the payments section and credited against total tax. A large refund does not necessarily mean the tax was low; it may mean more was withheld than the final return required.
The return can also use W-2 information for retirement-plan rules, dependent-care benefits, tips, household wages, and new Schedule 1-A deductions.
California uses W-2 state information, including California wages and personal income tax withheld, in preparing Form 540 or Form 540NR. California wages in box 16 can differ from federal wages in box 1 because state and federal law do not always treat compensation and benefits identically.
California employers also report payroll information to the Employment Development Department. Employees should not put federal withholding and California withholding on the same return line. Keep all state copies, especially when wages were earned in more than one state.
Heath Income Tax can reconcile W-2 wages and withholding, identify federal and California differences, and help determine the filing steps when a form is missing or corrected.
Is a W-2 the same as a tax return?
No. It is an information statement used to prepare a return.
Why is box 1 lower than my salary?
Pre-tax benefits can reduce box 1. Reconcile the amount to payroll and benefit records.
Does box 2 equal the tax I owe?
No. Box 2 is federal withholding, a payment toward the final tax calculation.
Can I file without a W-2?
The IRS has missing-form procedures, including possible use of Form 4852, but the employee should first try to obtain the correct W-2.
What if I have W-2s from multiple states?
Each state's sourcing, residency, credit, and filing rules must be analyzed. Preserve every state wage and withholding line.
The definitions and examples on this page are for informational purposes only and do not constitute tax advice. Tax laws change frequently and individual circumstances vary. Consult a qualified tax professional before making decisions based on this content.
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