What is W-2 form?

Your W-2 shows how much you earned and how much tax was withheld from your paychecks during the year. You need it to file your taxes. Employers are legally required to send W-2 forms to their employees and the Social Security Administration (SSA) by January 31st of the year following the tax year. It is a vital document for completing federal, state, and local income tax returns.

The W-2 details several key items: Box 1 lists total taxable wages and tips, Box 2 shows federal income tax withheld, Box 3 and 5 report wages subject to Social Security and Medicare taxes, and Box 4 and 6 show the amounts withheld for those taxes. It also details retirement plan participation and contributions to health accounts.

For W-2 employees, employers automatically withhold federal income tax, Social Security tax (6.2%), and Medicare tax (1.45%) from each paycheck. The employer also pays an equal share of FICA taxes. This automatic withholding helps employees meet their tax obligations throughout the year.

A key area on the W-2 is Box 12, which uses specific letter codes to report tax-advantaged actions, such as pre-tax contributions to a traditional 401(k) (Code D), Roth 401(k) contributions (Code AA), and employer/employee contributions to a Health Savings Account (Code W). Additionally, Box 13 contains a checkbox indicating whether the employee participated in an employer-sponsored retirement plan, which is critical because it triggers the IRS income phase-out rules for traditional IRA tax deductibility. If a worker changes jobs during the year or works multiple jobs, and their combined Box 3 Social Security wages exceed the statutory wage base limit (exactly $184,500 in 2026), too much Social Security tax will be withheld. The taxpayer can claim this excess withholding as a credit directly on Form 1040, restoring funds that would otherwise be lost.