What Do All Those Boxes and Codes on my Form W-2 Mean?
Form W-2, Wage and Tax Statement, comes in a variety of sizes, shapes, and formats. The format you see will depend on your employer's payroll processing. Regardless of the format, every Form W-2 contains the same information.
Knowing how to read a Form W-2 can help you understand your salary, and also help you get a head-start when preparing your taxes. Here's a line-by-line guide to reading your Form W-2.
Employer and Employee Identification (Boxes lettered A through F)
Box A: Employee's Social Security Number. This is your Social Security Number. If this number is incorrect, take your Social Security card to your company's human resources or payroll department and ask them to correct it and issue you a new Form W-2.
Box B: Employer Identification Number (EIN). This is your employer's unique tax identification number.
Box C: Employer's Information. This identifies the name, address, city, state, and zip code of your employer. The address may show your company's headquarters rather than their local address.
Box D: Control Number. This is a code that identifies this unique Form W-2 document in your employer's records. This number is assigned by the company's payroll processing software.
Box E: Employee's Name. This identifies your full name (first name, middle initial, and last name). If your name has changed, you might want to ask your company to update their records with your new name.
Box F: Employee's Address. This identifies your address, city, state, and zip code. If you have recently moved, the address might be a former address.
Numbered Boxes on Form W-2
Box 1: Wages, tips, and other compensation. Box 1 reports your total taxable wages or salary for federal income tax purposes. This figure includes your wages, salary, tips you reported, bonuses, and other taxable compensation. Any taxable fringe benefits (such as group term life insurance) are also included in your Box 1 wages. 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. The amount from box 1 is reported on Line 7 of Form 1040 or 1040A or on Line 1 of Form 1040EZ. If you have several W-2 forms, add up the box 1 amounts and place the total on those tax form lines.
Box 2: Federal income tax withheld. Box 2 reports the total amount withheld from your paychecks for federal income taxes. This represents the amount of federal taxes you have paid-in throughout the year. The amount from box 2 is reported on Line 62 of Form 1040, on Line 36 of Form 1040A, or on Line 7 of Form 1040EZ. If you have several W-2 forms, add up the box 2 amounts and place the total on those tax form lines.
Box 3: Social Security wages. Box 3 reports the total amount of wages subject to the Social Security tax. For 2013, the Social Security tax is assessed on wages up to $113,700. This limit is called the Social Security wage base. If Box 3 shows an amount over the wage base, you will need to have your employer correct your W-2. Tips reported to your employer are not included in the Box 3 amount. Those tips are is reported in Box 7.
Box 4: Social Security tax withheld. Box 4 reports the total amount of Social Security taxes withheld from your paychecks. Normally, the Social Security tax2 is a flat tax rate of 6.2% on your wage income, up to a maximum wage base of $113,700 (for 2013). Wages above the Social Security wage base are not subject to the Social Security tax. Accordingly, the maximum figure shown in Box 4 should be $7049.40 ($113,700 maximum wage base times 6.2%).
If you have two or more jobs during the year, and your total Social Security wages (box 3) exceeds $113,700, you may have paid-in more Social Security tax than is required. You claim the excess Social Security tax withholding as a refundable credit on your Form 1040.
Box 5: Medicare wages and tips. Box 5 reports the amount of wages subject to the Medicare tax. There is no maximum wage base for Medicare taxes. The amount shown in Box 5 may be larger than the amount shown in Box 1. Medicare wages includes any deferred compensation, 401(k) contributions, or other fringe benefits that are excluded from the federal income tax. In other words, the amount in Box 5 typically represents your entire compensation from your job.
Box 6: Medicare tax withheld. Box 6 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, employees may be subject to withholding for the Additional Medicare Tax at a rate of 0.9%. Higher income earners may find that the amount in box 6 is greater than the amount in box 5 multiplied by the regular 1.45% Medicare tax rate. The extra amount would be due to the additional Medicare tax. For taxpayers subject to the additional Medicare tax, Medicare tax withholdings from box 6 are reconciled on Form 8959.
Box 7: Social Security tips. Box 7 reports the amount of tip income that you reported to your employer. If you did not report tips to your employer, you will not have an amount in this box. The amounts in Box 7 and Box 3 may add up to the amount in Box 1 if you do not have any pre-tax benefits or may add up to the amount in box 5 if you do have pre-tax benefits. The total of Box 7 and Box 3 will not exceed the $113,700 Social Security wage base. The amount from box 7 is already included in the box 1 amount.
Box 8: Allocated tips. Box 8 reports any tip income allocated to you by your employer. This amount is not included in the wages reported in Boxes 1, 3, 5, or 7. Instead, you must add this to your taxable wages on Form 1040 Line 7, and must calculate your Social Security and Medicare taxes on this tip income using Form 4137 (PDF). Taxpayers with any amount shown in Box 8, Allocated Tips, may want to review the information in Publication 531 concerning allocated tips.
Box 9: No longer used. Box 9 was used to report any advance of the Earned Income Credit. The advance earned income credit ended in 2010, and Box 9 is shaded on the 2013 version of Form W-2. Advance EIC payments were advance payments from an employer to an employee in anticipation of being eligible for the earned income credit.
Box 10: Dependent Care Benefits. Box 10 reports any amounts reimbursed for dependent care expenses through a flexible spending account or the dollar value of dependent care services provided by your employer. Amounts under $5,000 are non-taxable benefits. Any amount over $5,000 is reported as taxable wages in Boxes 1, 3, and 5. Dependent care benefits are reported on Form 2441.
Box 11: Nonqualified Plans. Box 11 reports any amounts distributed to you from your employer's non-qualified deferred compensation plan or non-government Section 457 pension plan. The amount in Box 11 is already included as taxable wages in Box 1.
Box 12: Deferred Compensation and Other Compensation. There are several types of compensation and benefits that can be reported in Box 12. Box 12 will report a single letter or double letter code followed by a dollar amount.
Here are the codes for Box 12:
|Code A||Uncollected Social Security or RRTA tax on tips. Include this amount as part of your total tax on Form 1040.|
|Code B||Uncollected Medicare tax on tips. Include this amount as part of your total tax on Form 1040.|
|Code C||Taxable benefit of group term-life insurance over $50,000. This amount is already included as part of your taxable wages in Boxes 1, 3, and 5.|
|Code D||Non-taxable elective salary deferrals to a 401(k) or SIMPLE 401(k) retirement plan.|
|Code E||Non-taxable elective salary deferrals to a 403(b) retirement plan.|
|Code F||Non-taxable elective salary deferrals to a 408(k)(6) SEP retirement plan.|
|Code G||Non-taxable elective salary deferrals and non-elective employer contributions to a 457(b) retirement plan.|
|Code H||Non-taxable elective salary deferrals to a 501(c)(18)(D) tax-exempt plan. This amount is included in box 1 wages. See the Instructions for Form 1040 for Line 36 on how to deduct this amount.|
|Code J||Non-taxable sick pay. This amount is not included in taxable wages in Boxes 1, 3, or 5.|
|Code K||Excise tax (equal to 20%) on excess "golden parachute" payments. Include this amount as part of your total tax on Form 1040.|
|Code L||Non-taxable reimbursements for employee business expenses.|
|Code M||Uncollected Social Security or RRTA tax on taxable group term life insurance over $50,000 for former employees. Include this amount as part of your total tax on Form 1040.|
|Code N||Uncollected Medicare tax on taxable group term life insurance over $50,000 for former employees. Include this amount as part of your total tax on Form 1040.|
|Code P||Non-taxable reimbursements for employee moving expenses, if the amounts were paid directly to the employee. This amount may need to be used on Form 3903 (pdf) when calculating how much moving expenses to deduct|
|Code Q||Non-taxable combat pay. Some individuals may elect to include combat pay when calculating their Earned Income Credit. See Publication 3 for more details about the combat zone exclusion.|
|Code R||Employer contributions to an Archer Medical Savings Account. This amount should be reported on Form 8853 (pdf).|
|Code S||Non-taxable salary deferral to a 408(p) SIMPLE retirement plan.|
|Code T||Employer paid adoption benefits. This amount is not included in Box 1 wages. Use Form 8839 to calculate the taxable and non-taxable portion of these adoption benefits.|
|Code V||Income from the exercise of non-statutory stock options. This amount is already included as taxable income in Boxes 1, 3, and 5. However, you will still need to report separately the sale of any stock options on Schedule D.|
|Code W||Employer and employee contributions to a Health Savings Account. Report this amount on Form 8889.|
|Code Y||Salary deferrals under 409A non-qualified deferred compensation plan.|
|Code Z||Income received under 409A non-qualified deferred compensation plan. This amount is already included in taxable wages in Box 1. This amount is subject to an additional tax of 20% plus interest as part of your total tax on Form 1040.|
|Code AA||After-tax contributions to a Roth 401(k) retirement plan. This amount is included as part of your box 1 wages.|
|Code BB||After-tax contributions to a Roth 403(b) retirement plan. This amount is included as part of your box 1 wages.|
|Code DD||Reports the cost of non-taxable health insurance provided through your employer.|
|Code EE||After-tax contributions to a Roth 457(b) retirement plan offered by government employers. This amount is included as part of your box 1 wages.|
Box 13: Check the Box. There are three check boxes in Box 13. Boxes will be checked off if any of these situations apply to you as an employee.
Statutory employee means that you report the wages from this W-2 (and any other W-2 forms marked "statutory employee") on Form 1040 Schedule C. Your wages are not subject to income tax withholding (there will be a zero or blank amount in Box 2), but are subject to Social Security and Medicare tax withholdings (so Boxes 3 through 6 will be filled out). For a discussion of what constitutes a statutory employee and the rules that apply, see section 1 of Publication 15-A.
Retirement plan means that you participated in your employer's retirement plan during the year. This might be a 401(k) plan, 403(b) plan, SEP-IRA, SIMPLE-IRA, or other type of pension plan. If you participate in a retirement plan, your ability to deduct contributions to a traditional IRA may be limited based on your income.
Third-party sick pay means that you received sick pay under your employer's third-party insurance policy. (Instead of receiving sick pay directly from your employer as part of your regular paycheck.) Sick pay is not included in your box 1 wages, although sick pay is usually subject to Social Security and Medicare taxes. For a discussion of sick pay and third-party sick pay, see section 6 of Publication 15-A.
Box 14: Other Tax Information. Your employer may report additional tax information in Box 14. If any amounts are reported, they will have a brief description of what the amounts are for. For example, union dues, employer-paid tuition assistance, or after-tax contributions to a retirement plan may be reported here. Some employers report certain state and local taxes in Box 14, such as State Disability Insurance (SDI) premiums. State disability insurance premiums may be deductible as part of the deduction for state and local income taxes on Schedule A. Union dues may be tax-deductible as a miscellaneous itemized deduction.
Box 15: State and State Employer's Identification. Box 15 reports your employer's state and state tax identification number. If you worked for the same employer in multiple states, there may be multiple lines of information.
Box 16: State wages. Box 16 reports the total amount of taxable wages earned in that state. If you worked for the same employer in multiple state, there may be multiple lines of information.
Box 17: State income tax withheld. Box 17 reports the total amount of state income taxes withheld from your paychecks for the wages reported in Box 16. This amount may be deductible as part of the deduction for state and local income taxes on Schedule A.
Box 18: Local wages. Box 18 reports the total amount of wages subject to local, city, or other state income taxes.
Box 19: Local income tax withheld. Box 19 reports the total amount of taxes withheld from your paychecks for local, city, or other state income taxes. This amount may be deductible as part of the deduction for state and local income taxes on Schedule A.
Box 20: Locality name. Box 20 provides a brief description of the local, city, or other state tax being paid. The description may identify a particular city, or may identify a state tax such as State Disability Insurance (SDI) payments.