W-2 Form: What It Is and How It Works
A W-2 form is a crucial document you need when filing your taxes. This form contains all the relevant information about your income that you’ll need when preparing your tax return. When you earn wages or a salary from an employer and your income taxes are withheld, you should receive a W-2 form sometime during the first six weeks of the new year.
Your employer will also send a copy to the Social Security Administration, which will match the information from your employer with the information you report. In case you had more than one employer during the year, you’ll need to wait to receive all your W-2 forms before filing taxes for the year.
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This quick guide will break down what you need to know about your W-2 form in 2023, including how to get it, what’s on it and what to do if any of your information is incorrect.
What Is a W-2 Form?
A W-2 — formally known as Form W-2, Wage and Tax Statement — is a legal document that tells the IRS how much you earned from an employer in the past year, plus how much you’ve already paid in withheld taxes. The IRS uses this information to adjust your tax return — your W-2 may determine whether you will receive a check or owe money to the IRS at the end of the year.
In addition to listing how much you earned and paid in taxes, the W-2 includes personal identifying information, such as your Social Security number, along with your employer’s information and EIN number. It also includes the details of work-related benefits you received throughout the year, such as:
How much you contributed to your employer-sponsored retirement account
How much your employer paid for your health insurance
How much you received in dependent care benefits
Each section of a W-2 serves a specific tax-filing purpose. The IRS provides extensive instructions that are updated annually for the more complicated entries on the form.
W-2 vs. W-4
While the W-2 and W-4 forms serve similar purposes, they’re different forms filed at different times. A W-4, or Employee’s Withholding Certificate, is filled out by an employee when they’re hired. It tells the employer how much to withhold from their pay for benefits and income taxes.
A W-2, on the other hand, is filled out by the employer at the end of each tax year. To put it simply: you need to file a W-4 when you’re hired in order to receive a W-2 at the end of the year.
How Do I Get My W-2 Form?
You should receive a W-2 form from every employer who paid you $600 or more in the calendar year. The W-2 should be sent directly to you from your employer, either through email, postal mail, an online portal or some other method.
If you don’t get one, you can contact the IRS directly, and it will contact your employer on your behalf. To request assistance from the IRS in obtaining your W-2, call 800-829-1040. Be sure to have the following information handy:
Your name, address, Social Security number and phone number
Your employer’s name, address, phone number and employer identification number, if you know it — check last year’s W-2 if you worked for the same employer
Employment dates
You can also file Form 4852, Substitute for Form W-2, if you don’t receive a W-2 from your employer.
When Should I Get a W-2?
Employers must have all W-2s sent or postmarked no later than January 31, unless that date falls on a Saturday, Sunday or legal holiday, in which case the deadline will be the next business day.
If you don’t receive your W-2 by Feb. 15, contact the IRS at 800-829-1040. The IRS will contact your employer to issue the W-2 form that is missing. The IRS will also send you a copy of Form 4852 so you can file your taxes.
Some people receive multiple W-2 forms at the start of the year. This happens if you changed jobs during the past calendar year, worked more than one job where you are considered an employee with income taxes withheld, or the company you worked for was acquired by another company. If you are due more than one W-2, wait to receive all of them before preparing your tax return.
What’s on a W-2 Form?
A W-2 is broken down into numbered and lettered boxes. In 2023, the form was consolidated to reduce pages. Some boxes were moved from older versions to fit copies B, C and 2 onto one page, and the instructions were consolidated onto one page. However, these changes haven’t affected the overall structure of the form — your 2023 W-2 shouldn’t look much different from 2022 or 2021.
To better prepare for tax time, you should familiarize yourself with a W-2 so you can easily spot any errors you might find. Here’s a look at each of the boxes you’ll see when you receive a W-2 form. Some are self-explanatory, while others need further explanation.
Lettered Boxes
There are six lettered boxes on a W-2 form. The boxes provide employer and employee information for the specific job held during the tax year. Here’s a breakdown of the lettered boxes on a W-2:
a. Employee’s Social Security number
b. Employer identification number, or EIN
c. Employer’s name, address and ZIP code
d. Control number used by employers to identify specific W-2s — often unused
e. Employee’s name
f. Employee’s address and ZIP code
Numbered Boxes
The W-2 form has 20 numbered boxes. These contain wage and tax information for a specific job held during the tax year. Here’s a breakdown of the numbered boxes on Form W-2:
Wages, tips and other compensation
Federal income tax withheld
Social Security wages — wages subject to Social Security tax
Social Security tax withheld
Medicare wages and tips
Medicare tax withheld
Social Security tips
Allocated tips
Verification code
Dependent care benefits
Nonqualified plans
Box 12 has four sections -12a, 12b, 12c and 12d.
There is a space for a code in front of each entry and 29 letter codes that might appear, each indicating a type of tax not yet paid, deferrals, retirement or health plan contributions or other things that affect your taxes.
Checkboxes: Your employer will check if any of the following apply: statutory employee, retirement plan or third-party sick pay.
A statutory employee is an independent contractor who is treated by statute as an employee. Retirement plan is checked if you participated in a retirement plan through your employer. Third-party sick pay is checked if your employer is reporting sick pay received from a third party.
Catch-all box for payments made that don’t fall into any other category, such as state disability insurance taxes withheld, union dues or uniform payments
Employer’s state ID number
State wages and tips
State income tax withheld
Local wages and tips
Local income tax withheld
Locality name where local income tax was paid
Who Does and Doesn’t Get a W-2?
An employer must file a W-2 for every employee who received pay for services rendered under these criteria:
The employer paid the employee $600 or more in wages for the year.
The employer withheld Social Security or Medicare tax from wages.
The employer would have had to withhold income tax had the employee claimed an exemption from withholding on their Form W-4.
If you’re an employee who received a regular paycheck that included withholding for federal and state taxes, you should get a W-2. Here’s another way to think of it: If you filed a W-4 for any employer and they paid you in the last calendar year, you should receive a W-2 from them.
What About Freelancers?
Because freelancers and contractors are not technically employees, they don’t receive the same benefits and their wages aren’t withheld for taxes. You shouldn’t expect a W-2 from anyone who employed you as a contractor.
If you fall under the category of a freelance worker or independent contractor, you’ll receive a Form 1099-MISC or Form 1099-NEC instead of a W-2. Not sure which tax form you should receive? Ask your employer about your employment status before the end of the tax year.
What If Your W-2 Information Is Wrong?
If you notice that something is not right with your Form W-2, such as an error in income or withholding, you should first contact your employer and let them know. They should issue you a corrected copy.
If you don’t receive a corrected copy by the end of February, you can file a Form W-2 complaint. Call the IRS toll-free at 800-829-1040 or make an appointment to visit an IRS Taxpayer Assistance Center. The IRS will send your employer a letter requesting that they furnish you with a corrected Form W-2 within ten days.
The IRS will also send you a letter with instructions and Form 4852, which you can use if your employer doesn’t provide you with the corrected Form W-2 in time to file your return.
When you call the IRS or visit a TAC office, you need to have the following information available:
Your employer’s or payer’s name and complete address, including the ZIP code; the employer identification number; and your employer’s phone number.
Your name and address, including the ZIP code; your Social Security number; your phone number; and your dates of employment.
If you receive a corrected Form W-2 after you filed your return with Form 4852, and the information differs from the information reported on your return, you’ll need to correct your return by filing Form 1040-X, Amended U.S. Individual Income Tax Return.
FAQ
Is a W-2 the same as a tax return?
Form W-2 is not your tax return. It's an official document filed by your employer that the IRS will use to determine or adjust your tax return. You should receive a copy of your W-2 from your employer in the first six weeks of the year, before you file your taxes.
What is the difference between a 1099 and a W-2?
You'll receive a W-2 from your employer if you are a traditional employee, whether you are part time or full time. If you're a freelancer or independent contractor, you'll receive a 1099 instead. Both forms record the money you were paid by that employer through the calendar year, but the W-2 also includes information about your benefits and withheld income.
Is it better to be a 1099 employee or a W-2 employee?
Neither situation is necessarily better – what matters most is finding the employment style you're most comfortable with.
The key difference between W-2 employees and 1099 employees is that W-2 employees receive benefits and part of their income is withheld to pay taxes. Freelancers and independent contractors are paid directly by their employer and expected to pay their taxes quarterly, as well as filing a tax return each year.
Vance Cariaga, Daria Uhlig, Gabrielle Olya and Quinlan Grim contributed to the reporting for this article.
Information is accurate as of June 2, 2023.
This article originally appeared on GOBankingRates.com: W-2 Form: What It Is and How It Works
