Your W-2 (Wage and Tax Statement) is the single most important document for filing your return. Employers must furnish it by January 31, 2026 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.