The Annual Wage and Tax Statement (Form W-2) is a tax document used in the United States, issued by employers to employees at the end of each year. It provides a detailed summary of an employee’s earnings and tax withholdings for the year.
The form must be provided to employees and filed with the Social Security Administration (SSA) and the Internal Revenue Service (IRS). Here’s an in-depth look at Form W-2:
Key Components of Form W-2
- Employer Information:
- Employer’s name, address, and Employer Identification Number (EIN).
- This identifies the company filing the W-2.
- Employee Information:
- Employee’s name, Social Security number, and address.
- Earnings Information:
- Box 1: Wages, tips, and other compensation.
- Box 2: Federal income tax withheld.
- Box 3: Social Security wages (up to the wage base limit).
- Box 4: Social Security tax withheld.
- Box 5: Medicare wages and tips.
- Box 6: Medicare tax withheld.
- Other Details:
- Box 12: Codes for deferred compensation, retirement plans, and other special payments.
- Box 13: Indicators for statutory employees, retirement plan participation, or third-party sick pay.
- Box 14: Additional information (e.g., union dues, uniform reimbursements).
- State and Local Information: State wages, state income tax withheld, and similar local data.
Who Needs a Form W-2?
- Employees: All employees receiving compensation must receive a W-2, except independent contractors, who instead receive a Form 1099-NEC.
- Employers: Businesses must file a W-2 for each employee to comply with IRS and SSA regulations.
Important Deadlines
- January 31: Employers must send W-2 forms to employees and file them with the SSA.
- April 15: Employees must use their W-2 to file federal income tax returns by this date.
How to Use Form W-2?
- Employees use Form W-2 to prepare federal and state tax returns. It reports income and taxes withheld, determining whether additional taxes are owed or a refund is due.
Special Considerations
- Multiple W-2 Forms: Employees with multiple jobs or employers will receive multiple W-2s.
- Amended W-2s: If employers discover mistakes after filing, they must issue amended forms.