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The W-2 form is an important document required by the IRS. Employers must report wage and salary information for their employees by using the W-2 form. This form also records details about the federal and state taxes withheld from an employee’s paycheck as well as any other benefits like insurance, health savings accounts, and more.
The W-2 form should be submitted to the employee by the end of January. This document is essential for employees to prepare their tax returns. The IRS will use this documentation to track the income you’ve earned during the prior year to determine what you owe or are owed for taxes.
What You Need to Fill Out a W-2 Form
W-2 forms can be filled out on your own or by using payroll software. Some organizations use tax preparers to do this for them. Whatever the case, it’s important to understand the form in full. To be fully prepared to fill out a W-2 form, you should have the following information:
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Business identification information
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Employee identification information
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Employee taxable wages
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Tax withheld from employee wages
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Benefits that impact taxes
How to Fill Out a W-2 Form
The W-2 form is separated by lettered and numbered boxes. Boxes A-F list identifying information about your business and the employee for which the form is being filled out. Boxes 1-20 require additional information. Below, we break down each box and the information needed to fill out each one.
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Box A. This box is for your employee’s social security number, formatted as XXX-XX-XXXX. If your employee has applied for a social security number but has not received it, write “Applied For” in Box A. Once they are issued a social security number, you can submit a corrected W-2 with the number.
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Box B. This box is for your Employer Identification Number (EIN), formatted as XX-XXXXXXX. This EIN should be the same across every W-2 and is how the IRS identifies your business. If you do not have an EIN, you must apply for one. If you have applied but have not yet received one, write “Applied For” in this box.
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Box C. This box lists your company’s name and address. You must use the organization’s legal address, even if it’s different from your main office. Be sure you verify your legal business address and let your employees know if it differs from what they’re used to seeing.
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Box D. This box is for a control number. You may leave this box blank depending on whether or not your company uses control numbers. Control numbers identify W-2 forms so you can keep records of them within your company.
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Box E and F. Box E is for your employee’s first name, middle initial, and last name. Be sure to refer to their legal name in this instance. Box F is for your employee’s address.
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Box 1. This box reports your employee’s wages, tips, and any other compensation, such as commission. This amount is what you paid to your employee that’s subject to federal income tax. This does not include things not subject to taxes, such as health insurance premiums.
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Box 2. This box is for the federal income tax you withheld from an employee’s wages for the IRS. This number is based on the employee’s taxable wages and filing status.
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Box 3. This box shows the wages subject to social security tax. You should not include any pre-tax deductions exempt from social security tax in this box.
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Box 4. This box will indicate the social security tax withheld from an employee’s social security wages and tips. Social security tax is 6.2% of an employee’s wages up to the social security wage base.
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Box 5. This box is for how much an employee earned in Medicare wages and tips. This box is generally the same as box 4’s amount; however, there is no Medicare wage base, so if the employee earned above the social security wage base, the number here will be higher than box 3.
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Box 6. This box displays how much Medicare tax is withheld from an employee’s wages. The employee share is 1.45% of their wages for Medicare taxes.
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Box 7. This box is for reporting social security taxes if your employee earned tips and reported them. These tip amounts should also be included in boxes 1 and 5.
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Box 8. This box is for any tips you allocate to your employee. Allocated tips are not included in taxable income on the W-2, so don’t include this amount in boxes 1, 3, 5, or 7. This may not apply to all businesses as not all employers have to allocate tips to their employees.
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Box 9. Leave this box blank.
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Box 10. If you give your employee dependent care benefits, this amount will be included in this box. Anything under $5,000 is nontaxable; however, anything over this amount is subject to tax. If the employee received over this amount, it must be reported in boxes 1, 3, and 5.
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Box 11. This box reports any employer distributions from a nonqualified compensation plan to an employee. This amount should also be included in box 1.
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Box 12. On a W-2, there may be different codes you must use. These codes and amounts will be added to this box and work to lower the employee’s taxable wages, if applicable.
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Box 13. This box does not include any values but requires the employer to check boxes for statutory employees, retirement plans, and third-party sick pay.
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Box 14. This box is for reporting amounts and descriptions for things like vehicle lease payments, state disability taxes withheld, and deductions for health insurance premiums.
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Box 15. This box is for the employer’s state ID number. The difference between this box and box B is that this number is state specific. You should mark your state with its abbreviation and include your state EIN. If your state does not require reporting, leave this box blank.
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Box 16. This box is for employees’ wages subject to state income tax. If your state does not require state income tax, this box should be left blank.
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Box 17. This box is to report how much was withheld for state income tax. If nothing was withheld, this box could be left blank.
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Box 18. If your employee’s wages or tips were subject to local income tax, the total taxable wages should be included in this box. If your employee is not subject to local income tax, this box can be left blank.
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Box 19. Any local income tax withheld from the employee’s wages should be reported here. Again, if this does not apply to your employee, leave this section blank.
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Box 20. This box simply identifies the name of the city or locality.
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W-2 Form FAQ
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Is a W-2 form difficult to fill out?
No, the W-2 form is simple and straightforward. You should have all of the information you need from payroll and personnel records.
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What happens if you fill out your W-2 wrong?
If your W-2 form is incorrect, you must call the IRS at 800-829-1040 or make an appointment with an IRS Taxpayer Assistance Center. You will typically get ten days to submit a corrected W-2 form.
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Why is a W-2 form important?
This form shows important information required for your employee to correctly file their federal and state taxes.
Author
Caitlin Mazur
Caitlin Mazur is a freelance writer at Zippia where she has written 140+ articles that have reached over 1 mil viewers as of June 2023. Caitlin is passionate about helping Zippia’s readers land the jobs of their dreams by offering content that discusses job-seeking advice based on experience and extensive research.
