A W-2 form is also known as the Wage and Tax Statement. It is a document provided by employers at the end of each tax year summarizing the employee’s earnings.
The W-2 form consists of several parts, which are typically labeled with letters and contain different information.
Key Parts of a W-2 Form
- Employee Information (Parts A and B):
- Part A includes the employer’s information, such as the employer’s name, address, and employer identification number (EIN).
- Part B contains the employee’s information, including the employee’s name, address, Social Security Number (SSN), and the employer’s EIN.
- Earnings and Tax Withholdings (Parts 1-20):
- Part 1 – Wages, Tips, and Other Compensation is the most critical part of the W-2 form. It shows the total taxable wages, tips, and other compensation the employee earned during the tax year.
- Part 2 – Federal Income Tax Withheld displays the total amount of federal income tax withheld from the employee’s earnings for the year.
- Part 3 – Social Security Wages shows the total wages subject to Social Security tax for the year.
- Part 4 – Social Security Tax Withheld displays the total amount of Social Security tax withheld from the employee’s wages.
- Part 5 – Medicare Wages and Tips shows the total wages and tips subject to Medicare tax for the year.
- Part 6 – Medicare Tax Withheld displays the total amount of Medicare tax withheld from the employee’s earnings.
- Parts 7-9 are for reporting allocated tips, dependent care benefits, and other compensation and benefits.
- Part 10 – Dependent Care Benefits reports the total amount of dependent care benefits provided by the employer.
- Part 11 – Nonqualified Plans reports amounts deferred under nonqualified deferred compensation plans, if applicable.
- Part 12 – Codes section contains codes that provide additional information about certain types of compensation and benefits.
- Parts 13-14 are for use by the employer’s record-keeping and filing purposes.
- Part 15 – State and Employer’s State ID Number includes information about state wages and state income tax withheld.
- Parts 16-20 are for local and other state tax information, including state and local wages and tax withheld.
- Explanatory Boxes (Boxes a-f):
- These boxes often contain codes and amounts that correspond to specific tax-related information. For example, Box 12 may include codes for various types of compensation or benefits, such as retirement plan contributions.
- Instructions and Employer Contact Information:
- At the bottom of the W-2 form, you may find instructions for both the employee and the employer on how to complete and use the form. The employer’s contact information, including name, address, and EIN, is also provided.
The information on the W-2 form is crucial for filing your federal, state, and local income tax returns accurately. Employees should receive their W-2 forms from their employers by the end of January each year, as they need this information to file their tax returns before the April tax deadline.
