A W-2 is the tax form your employer sends you each year summarizing how much you earned and how much was withheld from your paychecks for federal, state, and payroll taxes. You use the numbers on your W-2 to file your income tax return, and the IRS uses a copy of the same form to verify that what you report matches what your employer reported. If too much tax was withheld during the year, you get a refund. If too little was withheld, you owe the difference.
Who Gets a W-2
Every worker classified as an employee receives a W-2. The distinction matters because independent contractors get a different form (a 1099) and handle their own tax payments. The IRS determines whether someone is an employee based on three categories of evidence: behavioral control (does the company direct how and when you do the work), financial control (does the company decide how you’re paid, reimburse expenses, or provide tools), and the type of relationship (are there benefits like insurance or a pension plan, and is the work a core part of the business). No single factor is decisive. The IRS looks at the full picture.
Remote workers are still employees if the company has the right to control the details of how the work is performed, even if the worker chooses where to do it. If you receive a regular paycheck with taxes already taken out, you’re almost certainly a W-2 employee.
What Happens During the Year
When you start a job, you fill out a Form W-4 telling your employer how much federal income tax to withhold from each paycheck. Your employer then calculates withholding based on your filing status, number of dependents, and any additional adjustments you specified. Every pay period, your employer pulls out federal income tax, Social Security tax, Medicare tax, and (in most cases) state income tax before depositing the rest in your bank account.
Your employer also pays its own share of Social Security and Medicare taxes on your behalf. You never see that money on your paycheck stub, and it doesn’t appear on your W-2, but it’s part of the total payroll tax cost your employer shoulders for having you on staff. The W-2 only reflects the employee’s side of these taxes.
Key Boxes on the Form
A W-2 has several numbered boxes, but the ones that matter most when you file your tax return are boxes 1 through 6.
- Box 1: Wages, tips, other compensation. This is your total taxable pay for the year. It does not include pre-tax deductions like contributions to a 401(k) or 403(b) retirement plan. So if you earned $65,000 but contributed $5,000 to your 401(k), Box 1 would show $60,000.
- Box 2: Federal income tax withheld. The total amount your employer pulled from your paychecks for federal income tax throughout the year. This is the number you compare against your actual tax liability when you file your return.
- Box 3: Social Security wages. Your total wages subject to Social Security tax, before payroll deductions. This number is often higher than Box 1 because pre-tax retirement contributions are still subject to Social Security tax. The 2026 Social Security wage base is $184,500, meaning earnings above that threshold are not taxed for Social Security.
- Box 4: Social Security tax withheld. The amount deducted for Social Security, calculated at 6.2% of the wages in Box 3.
- Box 5: Medicare wages and tips. Similar to Box 3, but with no wage cap. Every dollar you earn is subject to Medicare tax, no matter how high your salary goes.
- Box 6: Medicare tax withheld. The Medicare tax taken from your pay, calculated at 1.45% of Box 5 wages. High earners pay an additional 0.9% Medicare surtax on wages above $200,000.
Other boxes report state and local tax withholding, dependent care benefits, contributions to retirement plans, and various other compensation details. Your tax software or preparer will pull from all of these when completing your return.
Why Box 1 and Box 3 Often Differ
This confuses a lot of people. Box 1 reflects your federally taxable wages, which means pre-tax deductions like 401(k) contributions and health insurance premiums paid through your employer are subtracted. Box 3, on the other hand, includes those amounts because Social Security tax applies to them. If your gross pay was $75,000, you put $6,000 into a 401(k), and you paid $3,000 in pre-tax health premiums, Box 1 would show $66,000 while Box 3 would show $75,000.
How Your W-2 Connects to Your Tax Return
When you file your federal tax return (Form 1040), you enter the figures from your W-2 into the corresponding lines. Box 1 feeds into your total income. Box 2 tells the IRS how much you’ve already paid toward your federal tax bill through withholding.
The IRS then compares your total tax liability (based on your income, deductions, credits, and filing status) against the amount in Box 2. If your employer withheld more than you owe, the difference comes back to you as a refund. If the withholding fell short, you owe the balance. Neither outcome means you did something wrong. It simply reflects whether your W-4 withholding matched your actual tax situation for that year.
The IRS receives its own copy of your W-2 directly from your employer through the Social Security Administration. If the numbers on your tax return don’t match what your employer reported, the IRS will flag the discrepancy and may send you a notice.
When You Receive Your W-2
Employers must send W-2 forms to employees by February 1 of the following year. For 2026 earnings, that means you should have your W-2 in hand by February 1, 2027. Many employers make them available electronically in January if you’ve opted into paperless delivery. Employers face the same February 1 deadline for filing copies with the Social Security Administration.
If you haven’t received your W-2 by mid-February, contact your employer’s payroll department first. If that doesn’t work, the IRS can step in and request the form on your behalf. You can also file your return using your final pay stub as an estimate and submit a corrected return later if needed.
Multiple W-2s in One Year
If you changed jobs during the year, you’ll receive a separate W-2 from each employer. You report all of them on a single tax return by adding the income and withholding amounts together. One thing to watch: if your combined wages from multiple employers exceeded the Social Security wage base, you may have had too much Social Security tax withheld, since each employer withholds independently without knowing what the other collected. You can claim the excess as a credit on your tax return.
Corrected W-2s
If your employer made a mistake on your W-2, they issue a corrected version called a W-2c. Common reasons include a wrong Social Security number, incorrect wages, or an error in the tax withheld. If you’ve already filed your return using the original form, you may need to file an amended return (Form 1040-X) to fix the numbers. If you catch the error before filing, just wait for the corrected form and use that instead.
Keeping Your W-2
Hold onto copies of your W-2 for at least three years after filing the associated tax return. That’s the standard window the IRS has to audit most returns. If you’re self-employed in other capacities or have more complex tax situations, keeping records for six or seven years is safer. Your W-2 also serves as proof of income for mortgage applications, loan approvals, and other financial verifications, so having past copies accessible saves time.