Labeled W-2 · 2026 form · Box 12 decoder
How to Read a W-2: Every Box Explained (2026)
Your W-2 is really three things: what you earned, what was taxable under different systems, and what was already withheld. Start with Boxes 1, 3, and 5, then work outward.
Last verified: against IRS 2026 Form W-2 and General Instructions for Forms W-2 and W-3; SSA 2026 contribution and benefit base
Reviewed by Jessie for editorial clarity and sourcing. See more by Jessie.
Synthetic 2026 example
Sample Form W-2, Wage and Tax Statement
A teaching layout based on the 2026 federal form. The employer, employee, identifiers, wages, withholding, and benefit amounts are fictional.
Employer and employee
Employee's Social Security number
***-**-1042
Employer identification number (EIN)
**-***1042
Employer's name and address
Sample Company
100 Example Ave.
Atlanta, GA 30303
Control number
0026-1042
Employee name and address
Taylor R.
100 Sample St.
Atlanta, GA 30303
Federal wages and withholding
Wages, tips, other compensation
$92,000.00
Federal income tax withheld
$13,800.00
Social Security wages
$107,000.00
Social Security tax withheld
$6,634.00
Medicare wages and tips
$107,000.00
Medicare tax withheld
$1,551.50
Tips, benefits, and coded items
Social Security tips
Blank
Allocated tips
Blank
Reserved / generally blank
Blank
Dependent care benefits
Blank
Nonqualified plans
Blank
Codes
Checkboxes
☐ Statutory employee ☒ Retirement plan ☐ Third-party sick pay
Other
Blank
Treasury Tipped Occupation Code(s)
Blank
State and local reporting
State / employer state ID
GA / 0000000
State wages, tips, etc.
$92,000.00
State income tax
$4,250.00
Local wages, tips, etc.
Blank
Local income tax
Blank
Locality name
Blank
Why the three wage boxes differ in this example
Taylor earned $110,000 in cash wages, paid $3,000 through a qualifying Section 125 health plan, and deferred $15,000 to a traditional 401(k). The health deduction reduces Boxes 1, 3, and 5. The traditional 401(k) reduces Box 1, but not Boxes 3 or 5. That produces $92,000 in Box 1 and $107,000 in Boxes 3 and 5.
Start here
Read the W-2 in this order
- 1
1 / 3 / 5Wage bases
What was taxable under federal income tax, Social Security, and Medicare.
- 2
2 / 4 / 6Taxes withheld
What the employer already sent toward federal income tax and FICA.
- 3
12 / 13 / 14Benefits and codes
Retirement, health, equity, and other reporting details.
- 4
15–20State and local
State and local wages, withholding, and jurisdiction details.
Why Boxes 1, 3, and 5 do not match
This is the part of the W-2 that causes the most unnecessary panic. The three boxes are not competing answers to the question "what did I earn?" They are three different tax bases. If you want to change a 401(k), health premium, HSA, or Roth contribution and watch those bases move, the gross-pay and taxable-wage explorer models that relationship directly.
| Step | Box 1 | Box 3 | Box 5 |
|---|---|---|---|
| Gross cash wages | $110,000 | $110,000 | $110,000 |
| Section 125 health premium | -$3,000 | -$3,000 | -$3,000 |
| Traditional 401(k) | -$15,000 | $0 | $0 |
| Reported wage base | $92,000 | $107,000 | $107,000 |
That is the pattern to understand. A traditional 401(k) can lower federal taxable wages without lowering FICA wages. A qualifying cafeteria-plan deduction can lower all three. At higher incomes, Box 3 can stop at the Social Security wage base while Box 5 keeps going. Once you understand those three mechanics, the form becomes much less mysterious.
Every W-2 box explained
The IRS form is compact because it has to carry a lot of reporting in a small space. The useful question for each box is simpler: what does it measure, and what should you compare it with?
Boxes a through f: who the form belongs to
BOX aEmployee Social Security number
Confirm the number belongs to you. A wrong SSN can misdirect wage reporting and should be corrected by the employer.
BOX bEmployer identification number (EIN)
The employer federal tax ID. This is not the same thing as a state employer ID.
BOX cEmployer name and address
The legal employer reporting the wages. This can differ from a brand name, worksite, or payroll provider.
BOX dControl number
An optional employer or payroll-system identifier. It generally has no effect on your tax calculation.
BOX e/fEmployee name and address
Check spelling and identifying information. An address change by itself does not change which wages are taxable.
Boxes 1 through 6: the tax bases that matter most
BOX 1Wages, tips, other compensation
Federal income-taxable wages. This can be lower than gross cash pay because some pre-tax benefits reduce Box 1, and it can also include taxable compensation that was not ordinary salary.
BOX 2Federal income tax withheld
Federal income tax the employer actually withheld during the calendar year. It is a prepayment toward your eventual tax liability, not the tax rate applied to Box 1.
BOX 3Social Security wages
Wages subject to Social Security tax, capped at $184,500 for 2026. A traditional 401(k) generally does not reduce this box.
BOX 4Social Security tax withheld
Employee Social Security tax withheld. The standard employee rate is 6.2%; one employer should generally not withhold more than $11,439 for 2026 Social Security tax.
BOX 5Medicare wages and tips
Wages subject to Medicare tax. There is no Social Security-style wage cap, so this box can exceed Box 3 for higher earners.
BOX 6Medicare tax withheld
Medicare tax withheld. The base employee rate is 1.45%. Employers add 0.9% withholding after paying one employee more than $200,000 during the year. Final Additional Medicare Tax liability instead depends on filing status, including $200,000 for single filers and $250,000 for married filing jointly.
Boxes 7 through 14b: the exceptions, benefits, and codes
BOX 7Social Security tips
Tips you reported to your employer that were subject to Social Security tax. They are already part of the broader wage reporting rules; do not add them to Box 1 again just because they appear here.
BOX 8Allocated tips
Tips allocated by the employer under the tip-allocation rules. These are handled differently from tips you reported directly to the employer.
BOX 9Reserved
The 2026 form still has Box 9, but it is generally left blank.
BOX 10Dependent care benefits
Dependent-care assistance provided under an employer plan. For 2026, the federal exclusion is generally up to $7,500, or $3,750 for married filing separately, subject to the plan and earned-income rules. Box 10 reports both the nontaxable amount and any excess that becomes taxable wages.
BOX 11Nonqualified plans
Certain distributions or taxable amounts involving nonqualified deferred-compensation plans. If this box has a value, the surrounding plan details matter.
BOX 13Three checkboxes
Statutory employee, retirement plan, and third-party sick pay are separate indicators. A checked Retirement plan box can affect whether a traditional IRA contribution is deductible.
BOX 14aOther
Employer-defined or form-specific information that does not fit another box. Labels vary, so read the description rather than assuming a universal code.
BOX 14bTreasury Tipped Occupation Code(s)
New on the 2026 form. This box is used with the new Box 12 cash-tip reporting rules and will be blank for many employees.
Boxes 15 through 20: state and local reporting
BOX 15State / employer state ID
The state abbreviation and employer state identification number. More than one state can require more than one line or form.
BOX 16State wages, tips, etc.
Wages subject to that state's income-tax rules. They do not have to equal federal Box 1.
BOX 17State income tax
State income tax withheld during the year.
BOX 18Local wages, tips, etc.
Wages subject to a local income tax, where applicable.
BOX 19Local income tax
Local income tax withheld.
BOX 20Locality name
The city, county, school district, or other local jurisdiction associated with Boxes 18 and 19.
Box 12: decode the letters before you assume they are taxes
Box 12 is where a reasonably straightforward form decides to become an alphabet soup. The code matters more than the dollar amount by itself. A D is a traditional 401(k) deferral; DD is employer-sponsored health coverage cost; W is HSA reporting. They are not interchangeable and they do not all change taxable income the same way.
Showing all 23 selected codes.
DTraditional 401(k) elective deferrals
Generally reduces Box 1, but not Boxes 3 or 5.
E403(b) elective deferrals
Used for qualifying salary-reduction contributions under a 403(b) arrangement.
FSEP elective deferrals
Used for certain salary-reduction SEP arrangements.
GGovernmental 457(b) deferrals
Reports qualifying deferrals under a governmental section 457(b) plan.
H501(c)(18)(D) contributions
A less common retirement-plan code.
SSIMPLE plan salary reductions
Includes salary-reduction contributions under a section 408(p) SIMPLE plan.
AARoth 401(k) contributions
After-tax Roth contributions under a section 401(k) plan.
BBRoth 403(b) contributions
After-tax Roth contributions under a section 403(b) plan.
EERoth governmental 457(b) contributions
After-tax Roth contributions under a governmental 457(b) plan.
CTaxable group-term life cost over $50,000
Reports the taxable cost of employer-provided group-term life insurance above the exclusion.
DDEmployer-sponsored health coverage cost
Generally informational. It is not the amount you should add to taxable wages just because it appears here.
WHSA employer contributions
Includes employer contributions and certain employee pre-tax contributions made through a cafeteria plan.
FFQSEHRA permitted benefit
Reports the permitted benefit under a qualified small employer health reimbursement arrangement.
VNonstatutory stock-option exercise income
Reports income from exercising nonstatutory stock options that is included in wage reporting.
GGQualified equity-grant income under section 83(i)
Reports income included from a qualified equity grant under section 83(i).
HHAggregate section 83(i) deferrals
Reports aggregate deferrals under section 83(i) elections at year end.
JNontaxable sick pay
Certain sick pay not included in taxable wages because the employee contributed to the plan.
PExcludable moving-expense reimbursements
Applies to qualifying members of the U.S. Armed Forces under the applicable rules.
TAdoption benefits
Employer-provided adoption benefits reported under the federal rules.
IIExcluded Medicaid waiver payments
Payments excluded from gross income under IRS Notice 2014-7.
TASection 128 Trump account employer contributions
New 2026 code for qualifying employer contributions under the section 128 contribution program.
TPCash tips reported to the employer
New 2026 code for the total amount of cash tips reported to the employer.
TTQualified overtime compensation
New 2026 code for the qualifying overtime premium amount reported under the federal rules.
This is a selected reader-focused decoder, not a replacement for the IRS code table. If your W-2 contains a code not listed here, use the current IRS W-2 instructions.
What changed on the 2026 W-2
This is one place where an older W-2 explainer can quietly become wrong. The 2026 form changed, and the differences are visible on the face of the form.
Box 14 became 14a and 14b
Box 14a remains Other. New Box 14b reports Treasury Tipped Occupation Code(s) when the tipped-occupation rules apply.
New Box 12 code TP
TP reports the total amount of cash tips reported to the employer under the new 2026 reporting instructions.
New Box 12 code TT
TT reports qualified overtime compensation under the 2026 instructions. The IRS explains that this is the qualifying overtime premium, not simply all wages earned during overtime hours.
New Box 12 code TA
TA reports qualifying employer contributions under the section 128 Trump account contribution program.
The base W-2 reporting threshold increased
For 2026, the wage-reporting threshold increased from $600 to $2,000 when no federal income, Social Security, or Medicare tax was withheld. Withholding or other reporting rules can still require a W-2 below that amount.
If you have RSUs or stock options, do not stop at Box 1
Equity compensation is where "my salary was X, so Box 1 should be X" breaks down fastest. Taxable compensation from equity can flow into wage boxes even though it did not arrive as an ordinary paycheck. Nonstatutory stock-option exercise income can also appear in Box 12 under code V. If you have RSUs, options, or an employee stock plan, reconcile the W-2 with both payroll records and the brokerage or plan statement before assuming a mismatch is an error.
How to reconcile your W-2 to your last pay stub
The final pay stub is the best place to investigate a W-2 because it carries the year-to-date trail. The trick is comparing like with like. Gross pay belongs with gross pay; Box 1 belongs with federal taxable wages; Box 3 belongs with Social Security wages.
| W-2 | Compare with final pay stub | Common reason it differs |
|---|---|---|
| Box 1 | Federal taxable wages YTD | Year-end adjustment or taxable fringe benefit |
| Box 2 | Federal income tax withheld YTD | Payroll correction after the last ordinary check |
| Box 3 | Social Security wages YTD | Annual wage-base cap |
| Box 4 | Social Security tax withheld YTD | Rounding, correction, or multi-employer situation |
| Box 5 | Medicare wages YTD | Different benefit treatment from federal taxable wages |
| Box 6 | Medicare tax withheld YTD | Additional Medicare withholding above the employer threshold |
| Box 12 D / AA | 401(k) contribution YTD | Different plan buckets or year-end payroll correction |
One timing rule matters around New Year's: the W-2 is based on wages paid during the calendar year. If you worked in late December 2026 but the wages were paid in January 2027, the IRS instructions put those wages on the 2027 W-2.
Use the labeled pay-stub guide if you need help finding the current and YTD wage bases before you compare them with the W-2.
W-2 vs. pay stub vs. W-4
These three documents sit next to each other in payroll conversations, but they do different jobs. Mixing them up is an easy way to compare the wrong numbers.
| Document | What it does | When to use it |
|---|---|---|
| W-2 | Annual employer report of wages, withholding, benefits, and state/local reporting | File your tax return and reconcile the year |
| Pay stub | Pay-period and YTD detail for earnings, wage bases, taxes, deductions, and net pay | Audit payroll and explain how the W-2 was built |
| Form W-4 | Employee withholding elections used by payroll | Change how federal income tax is withheld from future paychecks |
What to do if your W-2 is wrong or never arrives
If a number or identifier is wrong
Start with the employer. The correction form is Form W-2c. Do not "fix" the number yourself on the return and assume the employer record will eventually catch up.
If the form never arrives
The IRS says to contact the employer first. If you still do not have the form by the end of February, the IRS can help and may provide Form 4852 as a substitute in qualifying situations.
For 2026 wages, the IRS instructions say employee copies generally must be furnished by February 1, 2027.
Eight checks before you file
A W-2 is compact enough that a ten-minute review can catch most obvious mismatches. Work from identity to wage bases to withholding, then deal with the codes.
Official sources and scope
This guide follows the 2026 federal Form W-2 and the IRS instructions for that tax year. State and local wage definitions can differ, so the bottom of the form still needs the applicable state or local guidance.
- IRS 2026 Form W-2: the form layout and box labels.
- 2026 General Instructions for Forms W-2 and W-3: box definitions, 2026 changes, codes, and timing rules.
- IRS About Form W-2: current form and filing resources.
- IRS guidance for missing or incorrect W-2s: employer contact, IRS escalation, and Form 4852.
- IRS Publication 15-B: 2026 fringe-benefit rules, including the dependent-care assistance exclusion reported through Box 10.
- SSA contribution and benefit base: the annual Social Security wage cap behind Box 3.
Frequently Asked Questions
Why is Box 1 lower than my salary?
Why are Boxes 1, 3, and 5 different?
Should Box 4 equal 6.2% of Box 3?
What is Box 12 code D?
What changed on the 2026 W-2?
What if my W-2 is wrong?
When should I receive my 2026 W-2?
Related tools and reading
Gross Pay vs. Taxable Wages vs. Net Pay
Use an interactive wage-base explorer to see why Boxes 1, 3, and 5 can differ before taxes reduce cash pay.
How to Read a Pay Stub
Trace current and year-to-date earnings, taxes, deductions, and net pay before reconciling the annual W-2.
Paycheck Calculator
Model annual federal, state, FICA, and benefit effects, then compare the categories with employer payroll reporting.
401(k) Calculator
See how traditional and Roth contributions affect current taxes and long-run retirement growth.
Social Security Wage Base History
See the annual Social Security wage cap behind W-2 Box 3 and Box 4.
Tax Bracket Calculator
Separate federal tax liability from the withholding reported in W-2 Box 2.
Methodology
Review PennyCalc sourcing, update cadence, testing, and correction standards.