Form W-2, officially titled the Wage and Tax Statement, is a U.S. tax form that employers must provide to each employee annually. It reports an employee’s total wages earned and the amount of federal, state, and other taxes withheld from their paycheck.
- Issued by: Employers
- Sent to: Employees and the Internal Revenue Service (IRS)
- Used for: Filing individual income tax returns
Form W-2 is used only for employees, not for independent contractors, they receive Form 1099-NEC instead.
Key Uses of Form W-2
- Helps employees file their tax returns accurately
- Allows the IRS to track wage and tax information
- Confirms Social Security and Medicare contributions
- Reports other deductions such as 401(k) or dependent care benefits
What Information Does Form W-2 Contain?
Form W-2 includes the following categories of information:
Employee Information
- Full name and Social Security Number (SSN)
- Home address
- Wages earned
Employer Information
- Employer name, address, and Employer Identification Number (EIN)
- State and local tax ID numbers
Income and Withholding Details (Boxes 1–20)
Each numbered box represents a different tax or wage detail. Here are some highlights:
| Box | Description |
| 1 | Total taxable wages, tips, and compensation |
| 2 | Federal income tax withheld |
| 3–6 | Social Security and Medicare wages and taxes |
| 12 | Additional details (e.g., 401(k) contributions – Code D) |
| 13 | Retirement plan, statutory employee, and sick pay indicators |
| 16–20 | State and local tax details |
| D (Lettered Box) | Control number (used by payroll systems) |
Deadlines and Filing Requirements
- Deadline to furnish W-2s to employees: January 31
- Deadline to file with the SSA: January 31
- Employers must also submit Form W-3 (summary form) with W-2s.
Penalties apply for late filing:
- $50 per W-2 if filed within 30 days after deadline
- $100 per W-2 if filed by August 1
- $260 per W-2 if filed after August 1 (maximum penalties apply)
Online vs. Mail Filing
- Mandatory e-filing if submitting 10 or more forms
- Employers can file online via the Social Security Administration (SSA) portal
- Paper forms can still be used for small batches, following SSA mailing instructions
Variations of Form W-2
- W-2c – Corrects errors on a previously filed W-2
- W-2G – Reports gambling winnings and related tax withholdings
Who Needs a W-2?
- Employees (including statutory employees)
- Employers (for payroll tax reporting)
- IRS and SSA (for wage and tax verification)
Not for freelancers or independent contractors. They should receive Form 1099-NEC instead
Best Practices for Employers
- Verify employee information (e.g., SSNs) before issuing forms
- Provide clear instructions to employees about W-2 availability
- Use secure platforms for e-filing and distributing electronic copies
- Keep records for at least 4 years for audit purposes
Form W-2 is a cornerstone of annual tax reporting for both employees and employers. It ensures accurate wage reporting, tax compliance, and proper recordkeeping. Filing on time and correctly is essential to avoid penalties and maintain a compliant payroll process.
