What Your W-2 Is Actually Telling You

The Top of the Form: Employer and Employee Information

Before you get to any numbers, the upper portion of your W-2 identifies who is reporting income to the IRS and to whom. Boxes a through f contain your Social Security number, your legal name and address, and your employer's federal identification number (EIN) and address. These fields matter more than they look — a wrong Social Security number can delay processing or cause the IRS to misapply your return entirely.

If any identifying information is wrong, request a corrected W-2 from your employer before filing. Do not attempt to white out or manually alter the form.

Boxes 1 Through 6: The Core Numbers

This is where most of the action is. Understanding each of these six boxes gives you the foundation for reading the rest of the form.

• Box 1 — Wages, tips, other compensation: Your federally taxable income for the year. This figure is almost always lower than your gross salary because it excludes pre-tax deductions such as traditional 401(k) contributions, health insurance premiums paid through payroll, and dependent care FSA deposits. This is the number that flows to Line 1 of your Form 1040.
• Box 2 — Federal income tax withheld: The total federal income tax your employer sent to the IRS on your behalf throughout the year. This is the figure that determines whether you receive a refund or owe a balance. For a deeper look at why that number may not match your actual liability, see our explainer on how federal withholding works.
• Box 3 — Social Security wages: The wages subject to Social Security tax. Unlike Box 1, this figure is not reduced by most pre-tax deductions (such as 401(k) contributions), though it is capped at the annual Social Security wage base set by the SSA each year.
• Box 4 — Social Security tax withheld: The employee share of Social Security tax, which is 6.2% of Box 3 wages up to the annual wage base.
• Box 5 — Medicare wages and tips: Wages subject to Medicare tax. There is no cap on Medicare-taxable wages, so this number may exceed Box 3 for higher earners.
• Box 6 — Medicare tax withheld: The employee share of Medicare tax, which is 1.45% of Box 5 wages. High earners may also see an additional 0.9% withheld if wages exceed IRS thresholds, though the exact reconciliation happens at filing.

Note that Boxes 3–6 fund Social Security and Medicare (together called FICA taxes) — they are entirely separate from federal income tax and are not credits toward your income tax liability.

Boxes 7 Through 14: Special Situations and Benefits

These boxes capture less common compensation types, employer-provided benefits, and coded information your tax software or preparer needs.

• Box 7 — Social Security tips: Tips you reported to your employer, added to Box 3 wages to calculate Social Security tax.
• Box 10 — Dependent care benefits: Amounts your employer contributed to a dependent care FSA or paid directly for child care. Up to a certain limit (set annually by the IRS), this is excluded from taxable wages.
• Box 11 — Nonqualified plans: Distributions from nonqualified deferred compensation plans, which are generally taxable in the year distributed.
• Box 12 — Coded benefits and contributions: This box uses IRS letter codes to report specific items. Common ones include: Code D for traditional 401(k) elective deferrals, Code W for employer HSA contributions, and Code DD for the employer-sponsored health coverage cost (informational only — not taxable to you). Your tax software will prompt you to enter the letter code and the corresponding dollar amount separately.
• Box 13 — Checkboxes: Indicates whether you are a statutory employee, participated in a retirement plan, or received third-party sick pay. The retirement plan checkbox is particularly important: if it is checked, your ability to deduct a traditional IRA contribution may be limited depending on your income.
• Box 14 — Other: Employers use this catch-all box for items like state disability insurance (SDI) contributions, union dues paid through payroll, or employer-required disclosures. Some Box 14 entries affect your state return; others are purely informational.

Boxes 15 Through 20: State and Local Taxes

The lower portion of your W-2 mirrors the federal section but for state and local tax jurisdictions. Box 15 identifies your state and your employer's state tax ID. Box 16 shows state taxable wages (which may differ from Box 1 depending on your state's rules). Box 17 is state income tax withheld — the equivalent of Box 2 for your state return.

If you live or work in a city or county that levies its own income tax, Boxes 18 through 20 capture local wages and withholding. Some workers receive a W-2 with multiple state or local entries if they worked across state lines during the year.

Comparing your W-2 with your pay stubs is a useful check. If the year-to-date figures on your last pay stub don't align closely with your W-2 boxes, flag the discrepancy with your employer. For a side-by-side look at how those pay stub line items translate into W-2 figures, see our guide on reading a pay stub for the first time.

This article provides general information about Form W-2 and is not tax advice. Your individual tax situation may vary. Consult a qualified tax professional for guidance specific to your circumstances.