What Each Box on Your W2 Means

Your W2 contains 14 numbered boxes plus several letter-labeled boxes. Each one reports a different type of income or tax withholding from your employer. The form is divided into two halves: the top half shows what you earned, and the bottom half shows what was taken out of your paychecks.

You will receive a W2 from every employer you worked for during the year if you earned $600 or more. Your employer sends copies to you, the IRS, and your state tax authority. The form covers only income from that specific job — if you worked for three employers, you get three W2s.

The boxes are arranged in a specific order, but you do not need to memorize them. What matters is knowing where to find the numbers you need when you file taxes or apply for housing assistance, loans, or benefits that require income verification.

Key Takeaways

  • Box 1 shows your taxable wages — the number most programs use to verify your income.
  • Boxes 2 and 3 show federal and state income tax withheld from your paychecks, not money you owe.
  • Box 5 and 6 show Social Security and Medicare tax withheld; these are separate from income tax.
  • Boxes 12 and 13 may contain additional income or deductions that affect your taxes but not your gross pay.
  • The letter codes in Box 12 (like D, E, or AA) tell you what type of additional income or deduction each amount represents.

Boxes 1 Through 6: Your Income and Basic Withholding

Box 1 (Wages, tips, other compensation) is the number most housing programs, loan officers, and benefit administrators ask for. It is your taxable wages for the year — your gross pay minus certain pre-tax deductions like health insurance or 401(k) contributions. This is not your take-home pay; it is what the IRS counts as income.

Box 2 (Federal income tax withheld) shows how much your employer sent to the IRS from your paychecks. This is not a tax you owe; it is money already paid. If this number is large, you may get a refund when you file. If it is small, you may owe more.

Box 3 (Social Security wages) and Box 4 (Social Security tax withheld) are paired. Box 3 shows the income subject to Social Security tax (usually the same as Box 1, but sometimes less if you earned over the annual limit). Box 4 shows the 6.2% Social Security tax taken from your paychecks.

Box 5 (Medicare wages and tips) and Box 6 (Medicare tax withheld) work the same way. Box 5 is the income subject to Medicare tax. Box 6 shows the 1.45% Medicare tax withheld, plus any additional Medicare tax if you earned over $200,000 (single) or $250,000 (married filing jointly).

Boxes 7 Through 11: Special Income and Credits

Box 7 (Social Security tips) appears only if you reported tips to your employer. This is separate from tips included in Box 1.

Box 8 (Allocated tips) is used in certain industries like restaurants. Your employer may allocate a portion of total tips to you even if you did not report them. This affects your taxes but is not money you received.

Box 9 (Dependent care benefits) shows pre-tax money your employer set aside for childcare or adult dependent care. This reduces your taxable income but is not included in Box 1.

Box 10 (Dependent care benefits not in Box 1) shows dependent care benefits that were not already subtracted from your wages. This is rare and usually appears only in specific employer plans.

Box 11 (Nonqualified plans) shows distributions from a nonqualified deferred compensation plan — money your employer held and paid out in a later year. This is uncommon for most workers.

Box 12: Additional Income and Deductions (With Letter Codes)

Box 12 can contain multiple entries, each with a letter code that explains what the amount represents. The letter code is critical: the same dollar amount means different things depending on whether the code is D, E, AA, or something else.

Common codes include: D (401(k) contributions), E (403(b) contributions), F (403(b) catch-up contributions), G (403(b) nontaxable earnings), H (HSA contributions), J (nontaxable sick pay), K (20% excise tax on excess golden parachute payments), L (excess golden parachute payments), M (income from exercise of nonstatutory stock options), N (excess deferrals), P (excludable moving expense reimbursements), Q (military base housing allowance), R (employer contributions to an Archer MSA), S (employee salary reduction contributions to a SIMPLE plan), T (adoption benefits), V (income from the exercise of incentive stock options), W (predisaster mortgage assistance provided by employer), Y (Roth 401(k) contributions), Z (Roth IRA contributions), AA (designated Roth contributions to a 403(b) plan), BB (designated Roth contributions to a 457(b) plan), DD (cost of employer-sponsored health insurance), EE (designated Roth contributions to a 401(k) plan), FF (permitted benefits under a rabbi trust), GG (income from discharge of indebtedness), HH (Roth IRA conversions), JJ (SIMPLE retirement account contributions).

For income verification purposes, most programs care only about Box 1. Box 12 entries usually reduce your taxable income rather than add to it, so they matter more when you file taxes than when you prove your income to a landlord or lender.

Boxes 13 Through 14: Retirement Plan and State Tax Information

Box 13 contains three checkboxes: "Statutory employee," "Retirement plan," and "Third-party sick pay." A checkmark in "Retirement plan" means you participated in your employer's pension or 401(k) plan during the year. This is informational and does not change your income.

Box 14 (Other) is a catch-all for state-specific information, union dues, uniform costs, or other employer-reported items that do not fit elsewhere. The label next to the amount tells you what it represents. Most of the time this box is blank or contains small amounts that do not affect your main income number.

State and Local Tax Boxes

The bottom section of the W2 contains boxes for state income tax withheld and local income tax withheld. These vary by state and locality. Some states have no income tax, so these boxes may be blank. Others show multiple state entries if you worked in more than one state during the year.

State income tax withheld and local income tax withheld work the same way as federal income tax withheld: they show money already paid, not money you owe. When you file your state and local tax returns, these amounts reduce what you owe or increase your refund.

How to Use Your W2 for Income Verification

When you need to prove your income — for a rental application, a loan, or a benefit program — most organizations ask for Box 1 from your most recent W2. This is your taxable wages for that year. If you worked multiple jobs, add the Box 1 amounts from all your W2s to show your total employment income.

Some programs ask for your "gross income," which is also Box 1. Others ask for "adjusted gross income" (AGI), which requires your tax return, not just your W2. If you are unsure which number to provide, ask the organization directly — they will tell you whether they need Box 1, your tax return, or both.

Keep your W2s in a safe place. You will need them to file taxes, and you may need to show them to landlords, lenders, or government agencies for years after you receive them. The IRS keeps records, so if you lose your copy, you can request a transcript from the IRS website or by calling 1-800-829-1040.

Frequently Asked Questions

What if my W2 has a mistake on it?

Contact your employer immediately. They can issue a corrected W2 (called a W2-C) and send it to you and the IRS. Do not file your taxes with the wrong W2; the IRS will catch the discrepancy and delay your refund or send you a bill. Your employer is required to fix errors at no cost to you.

Do I need all my W2s to file taxes?

Yes, if you worked for multiple employers. You must report income from every W2 you received. The IRS receives copies of all your W2s, so they will know if you leave one out. Add Box 1 from each W2 to calculate your total employment income.

Can I use my W2 to prove income if I am self-employed?

No. Self-employed income is reported on a Schedule C (Profit or Loss from Business) attached to your tax return, not on a W2. If you have both W2 income and self-employment income, you will have a W2 for the job and a Schedule C for the business. Most programs ask for both documents.

What if Box 1 on my W2 is different from what I expected?

Box 1 subtracts pre-tax deductions like health insurance, 401(k) contributions, and dependent care accounts. These reduce your taxable income but are taken from your paychecks. If you contributed to any of these, your Box 1 will be lower than your gross pay. Check your pay stubs to see what was deducted.

How long should I keep my W2s?

Keep them for at least three years for tax purposes. The IRS can audit back three years in most cases. For income verification (housing, loans, benefits), keep them as long as you might need to prove that income — often seven years or longer. Store them in a safe, dry place or scan them to a secure cloud backup.