Your W-2 (Wage and Tax Statement) is the single most important document for filing your return. Employers must furnish it by February 2, 2026 (January 31 fell on a Saturday) for the 2025 tax year. Every number on it feeds somewhere into your Form 1040 — and the reason Box 1 rarely matches your salary confuses a lot of filers. Here is what each box means.
Identifying Boxes (a through f)
- Box a: Your Social Security number — verify it is correct.
- Box b: The employer’s federal EIN.
- Box c: Employer name and address.
- Box d: A control number (internal payroll tracking; often blank).
- Boxes e and f: Your legal name and address.
Box 1: Wages, Tips, Other Compensation
This is your federal taxable wage — and it is usually lower than your gross salary because pre-tax deductions are already subtracted: traditional 401(k) contributions, pre-tax health insurance premiums, FSA and HSA contributions, and commuter benefits. Box 1 is the figure that flows to line 1a of Form 1040.
Box 2: Federal Income Tax Withheld
The total federal income tax your employer already sent to the IRS, based on your W-4. This is a credit against your final tax — if Box 2 exceeds your tax owed, you get a refund.
Boxes 3 and 4: Social Security Wages and Tax
- Box 3: Wages subject to Social Security, capped at the 2026 wage base of $184,500. Notably, 401(k) deferrals are not subtracted here, so Box 3 is often higher than Box 1.
- Box 4: Social Security tax withheld — should equal 6.2% of Box 3 (maximum $11,439.00 in 2026).
Boxes 5 and 6: Medicare Wages and Tax
- Box 5: Medicare wages — no cap, so high earners see a larger figure here than in Box 3.
- Box 6: Medicare tax withheld — 1.45% of Box 5, plus an extra 0.9% Additional Medicare Tax on wages over $200,000.
Boxes 7 through 11
- Box 7: Social Security tips you reported.
- Box 8: Allocated tips (common in restaurants).
- Box 10: Dependent-care benefits (amounts over the exclusion limit become taxable).
- Box 11: Distributions from a nonqualified deferred-comp plan.
Most employees see these blank.
Box 12: The Coded Box
Box 12 carries up to four letter-coded amounts. The most common:
- Code D: Pre-tax 401(k) elective deferrals.
- Code AA: Roth 401(k) contributions.
- Code DD: Total cost of employer-sponsored health coverage (informational only, not taxable).
- Code W: Employer + employee HSA contributions.
- Code C: Taxable cost of group-term life insurance over $50,000.
Box 13: Checkboxes
Three boxes that may be checked: Statutory employee, Retirement plan (which can limit your IRA deduction), and Third-party sick pay.
Box 14: Other
A catch-all your employer uses for items with no dedicated box — state disability insurance (SDI/CASDI), union dues, after-tax 401(k), or RSU income already in Box 1.
Boxes 15 through 20: State and Local
- Box 15: State and the employer’s state ID number.
- Box 16: State taxable wages.
- Box 17: State income tax withheld.
- Box 18: Local wages.
- Box 19: Local income tax withheld.
- Box 20: The locality name.
If you worked in multiple states, you may see several rows here — each one supports a separate state return.
Why Box 1, Box 3, and Box 5 Differ
A quick worked example. Suppose your gross pay is $80,000 and you contributed $10,000 to a traditional 401(k) and $2,000 to pre-tax health premiums:
- Box 1 = $80,000 − $12,000 = $68,000 (401(k) and health premiums both excluded)
- Box 3 and Box 5 = $80,000 − $2,000 = $78,000 (health premiums excluded, but 401(k) is not for FICA)
Seeing three different wage numbers is normal and correct.
Filing Checklist
- Confirm your SSN and name match your Social Security card.
- Make sure Box 2 reflects the withholding you expected from your W-4.
- Keep every W-2 if you had multiple jobs — you report them all.
To sanity-check that your withholding and FICA on the W-2 look right for your pay, model your paycheck with the paycheck calculator and verify the Social Security and Medicare amounts against the FICA calculator.