W-2 Form Info
Understanding Your W-2
Box 1: Wages, tips, and other compensation. Box 1 reports your total taxable wages for federal income tax purposes. This figure represents your income (wages, salary, bonuses, and other taxable compensation) minus tax-deferred retirement plans and certain pre-tax deductions such as medical, dental, vision, and flexible spending plans. Any taxable fringe benefits (such as group term life insurance) are also included in your Box 1 wages.
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.
Box 3: Social Security wages. Box 3 reports the total amount of wages subject to the Social Security tax. For 2018, the Social Security tax is assessed on wages of $128,400 or less. This limit is called the Social Security wage base.
Box 4: Social Security tax withheld. Box 4 reports the total amount of Social Security tax withheld from your paychecks. The Social Security tax is a flat tax rate of 6.2% on your taxable wages, up to a maximum wage base of $128,400 for 2018 (and $132,900 for 2019). Wages above $128,400 for 2018 were not subject to the Social Security tax. Accordingly, the maximum figure shown in Box 4 on your 2018 W-2 should be $7,960.80 ($128,400 maximum wage base times 6.2%).
If you have two or more jobs during the year, and your total taxable wages exceed $128,400, you may have paid-in too much Social Security tax. You can claim the excess Social Security tax withholding as a credit on your Form 1040.
Box 5: Medicare wages and tips. Box 5 reports the amount of wages subject to Medicare tax. There is no maximum wage base for Medicare tax. The amount shown in Box 5 may be larger than the amount shown in Box 1. Medicare wages include any deferred compensation, 403(b) and 457(b) contributions, or other fringe benefits that are normally excluded from the regular income tax.
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. An additional 0.9% Medicare tax is withheld on any of the Medicare wages shown in box 5 that are in excess of $200,000.
Box 7: Social Security tips. Not applicable.
Box 8: Allocated tips. Not applicable.
Box 9: Advance EIC payment. No longer applicable.
Box 10: Dependent Care Benefits. Box 10 reports any amounts reimbursed for dependent care expenses, 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. Non-taxable benefits must be excluded from expenses claimed for the child and dependent care tax credit on IRS 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 that you may see listed in 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. 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.
- 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.
- Code Q – Non-taxable combat pay. Some individuals may elect to include combat pay when calculating their Earned Income Credit.
- Code R – Employer contributions to an Archer Medical Savings Account. This amount should be reported on IRS Form 8853.
- 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. You must use IRS 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. See also, how to report stock options.
- Code W – Employer and employee contributions to your Health Savings Account. Report this amount on IRS 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.
- Code BB – After-tax contributions to a Roth 403(b) retirement plan.
- Code CC – No longer applicable.
- Code DD – Cost of employer-sponsored health coverage. This is new for 2013 as a result of the Affordable Care Act.
- Code EE – Designated ROTH Contribution under a governmental section 457(b) plan.
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 must report the wages from this W-2 (and any other W2 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 taxes (so Boxes 3 through 6 will be filled out). I highly encourage statutory employees to use tax preparation software to calculate their taxes.
Retirement plan means that you participated in your employer's retirement plan during the year. This might be a 401(k) plan, profit-sharing plan, or pension plan. As a participate in a retirement plan, your ability to contribute to a tax-deductible traditional IRA may be limited. This box will be checked if you particpate in the Teachers Retirement System (TRS), Optional Retirement Plan (ORP) or the Georgia Defined Contribution Plan (GDCP) during the tax year.
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 taxable wages.
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, health insurance premiums you paid, or after-tax contributions to a retirement plan will be reported here. Some employers report certain state and local taxes in Box 14, such as State Disability Insurance (SDI) premiums.
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.
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.
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.