Form W-2 (Wage and Tax Statement)

Detailed Explanation

Employers must furnish W-2s to employees and file with the Social Security Administration by January 31 each year. The W-2 captures wages and withholding by jurisdiction in distinct boxes: Box 1 (federal taxable wages, after pre-tax 401(k), HSA, and Section 125 health deductions), Box 2 (federal income tax withheld), Box 3 (Social Security wages, capped at the annual wage base), Box 4 (Social Security tax withheld), Box 5 (Medicare wages, no cap), Box 6 (Medicare tax withheld, including any employer-collected Additional Medicare on wages over $200,000), and Box 12 (special items via codes: D for 401(k), DD for employer-paid health, V for NQSO exercise income, W for HSA contributions, and many others). Boxes 15 through 20 cover state and local wages, withholding, and locality codes. Box 14 is a free-form box where employers commonly report items like state disability insurance (CA SDI), union dues, after-tax HSA contributions, and 414(h) retirement contributions. RSU vesting and NQSO exercise income are bundled into Box 1 wages with no separate identification (employees often have to reconcile against pay stubs and grant statements). For multi-state employees, separate state-W-2 sections may be issued; remote workers must verify that withholding matches the state where they actually performed the work, not just where the employer is located.