They come in different formats, but regardless of the layout, every Form W-2 contains the same information. Following is a line-by-line reference guide to understanding the numbered boxes and data contained on Form W-2.
Box 1: Wages, tips, and other compensation. This contains the total amount you have earned in wages, salary, tips reported, bonuses and other taxable compensation for federal income tax purposes, minus allowable deductions. Any taxable fringe benefits (such as group term life insurance) are also included. Box 1 does not include any pre-tax benefits such as savings contributions to a 401(k) plan, 403(b) plan, health insurance, or other types of pre-tax benefits.
Box 2: Federal income tax withheld. This is the total amount withheld from an individual’s paychecks for federal income taxes paid-in throughout the year.
Box 3: Social Security wages. This represents the total wages subject to the Social Security tax and includes any income earned during the tax year that is not exempt from taxation, such as retirement and some insurance contributions. For 2014, the Social Security tax is assessed on wages up to $117,000.
Box 4: Social Security tax withheld. This reports the total amount of Social Security taxes withheld for the year. Normally, the Social Security tax is a flat tax rate of 6.2% on your wage income, up to a maximum wage base of $117,000 (for 2014) for employees and 12.4% for independent contractors. If there are multiple jobs during a year, and the total Social Security wages (Box 3) exceeds $117,000, too much has been paid-in Social Security tax than is required. This excess withholding amount can be a refundable credit on Form 1040.
Box 5: Medicare wages and tips. Contains the total wages, including tips and commissions that are taxed for Medicare. There is no maximum wage base for Medicare taxes. Medicare wages includes any deferred compensation, 401(k) contributions, or other fringe benefits that are excluded from the federal income tax. In other words, this amount typically represents your entire compensation from your job.
Box 6: Medicare tax withheld. This reports the amount of taxes withheld from your paycheck for the Medicare tax. The Medicare tax is a flat tax rate of 1.45% of your total Medicare wages. Starting in 2013, higher income earners may be subject to withholding for the Additional Medicare Tax at a rate of 0.9%.
Box 7: Social Security tips. Reflects the amount of tip income or commissions that you reported to your employer.
Box 8: Allocated tips. This box is used by food and beverage establishments to indicate the tips allocated to the employee.
Box 9: No longer used. This was previously used to report any advance payment on the Earned Income Tax Credit. This option has been eliminated as of January 1, 2011.
Box 10: Dependent Care Benefits. This reflects any deductions made from wages for childcare or other dependent care. Amounts under $5,000 are non-taxable benefits. Any amount over $5,000 is reported as taxable wages in Boxes 1, 3, and 5.
Box 11: Nonqualified Plans. This is for amounts distributed from an employer's non-qualified deferred compensation plan or non-government Section 457 pension plan.
Box 12: Deferred Compensation and Other Compensation. This area is used to report a variety of benefits and forms of compensation not captured in Boxes 1 – 11. This box will contain a letter code followed by a dollar amount.
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Code A: Uncollected Social Security or RRTA tax on tips.
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Code B: Uncollected Medicare tax on tips.
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Code C: Taxable benefit of group term-life insurance over $50,000.
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Code D: Non-taxable elective salary deferrals to a 401(k) or SIMPLE 401(k) retirement plan.
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Code E: Non-taxable elective salary deferrals to a 403(b) retirement plan.
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Code F: Non-taxable elective salary deferrals to a 408(k)(6) SEP retirement plan.
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Code G: Non-taxable elective salary deferrals and non-elective employer contributions to a 457(b) retirement plan.
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Code H: Non-taxable elective salary deferrals to a 501(c)(18)(D) tax-exempt plan. This amount is included in Box 1 wages.
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Code J: Non-taxable sick pay.
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Code K: Excise tax (equal to 20%) on excess “golden parachute” payments.
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Code L: Non-taxable reimbursements for employee business expenses.
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Code M: Uncollected Social Security or RRTA tax on taxable group term life insurance over $50,000 for former employees.
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Code N: Uncollected Medicare tax on taxable group term life insurance over $50,000 for former employees.
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Code P: Non-taxable reimbursements for employee moving expenses, if the amounts were paid directly to the employee.
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Code Q: Non-taxable combat pay.
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Code R: Employer contributions to an Archer Medical Savings Account.
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Code S: Non-taxable salary deferral to a 408(p) SIMPLE retirement plan.
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Code T: Employer paid adoption benefits.
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Code V: Income from exercise of non-statutory stock options. This amount is already included as taxable income in Boxes 1, 3 and 5.
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Code W: Employer and employee contributions to a Health Savings Account.
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Code Y: Salary deferrals under 409A non-qualified deferred compensation plan.
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Code Z: Income received under 409A non-qualified deferred compensation plan. This amount is already included in taxable wages in Box 1.
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Code AA: After-tax contributions to a Roth 401(k) retirement plan. This amount is included as part of Box 1 wages.
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Code BB: After-tax contributions to a Roth 403(b) retirement plan.
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Code DD: Reports the cost of non-taxable health insurance provided by the employer.
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Code EE: After-tax contributions to a Roth 457(b) retirement Plan offered by government employers. This amount is included as part of Box 1 wages.
Box 13: Check the Box. This section contains 3 check boxes to indicate any of the following situations:
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Statutory employee: A full time employee that does not pay income tax. Typically self-employed individuals who deduct business expenses such as travel, entertainment, vehicle, etc.
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Retirement plan means that you participated in an employer's retirement plan during the year.
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Third-party sick pay means that you received sick pay under your employer's third-party insurance policy.
Box 14: Other Tax Information. This section is used to report additional deductions that are not covered elsewhere on the W-2. For example, union dues, employer-paid tuition assistance, health-related insurance premiums or after-tax contributions to a retirement plan.
Box 15: State Employer's Identification. The employer’s State Tax Identification number is listed here.
Box 16: State wages. This reports the total amount of taxable wages earned that are subject to state income tax.
Box 17: State income tax withheld.
Box 18: Local wages. This reports the total amount of taxable wages earned that are subject to local income tax.
Box 19: Local income tax withheld. .
Box 20: Locality name. The code name of the locality that corresponds to the income and taxation reported in Boxes 18 and 19.
