How to Calculate Employee Benefits

What is a W-2? FAQs about W-2 Wage and Tax Statement

What is a W-2 tax form? Who files it? We answered all W-2 questions in this article to help you fill out this form timely and accurately.

Owen Yin
Written by Owen Yin
December 17, 2021
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Tax forms tend to be overwhelming and off-putting but there is a method to the madness. And fortunately, there’s no need for a tax professional to complete your W-2. 

The W-2 is a tax form full-time employees encounter and file every year during tax season. This article aims to uncomplicate Form W-2 and provide you with straightforward answers to the most common questions surrounding the W-2 Wage and Tax Statement. We’ll explain the form's purpose, the information it asks for, and the difference between W-2s, 1099s, 1040s, and W-4s.

Note: the information in this guide is most helpful for workers learning the basics of the W-2. Employers may be more interested in our article about the pros and cons of hiring W-2 employees vs. 1099 employees.

What is a tax form W-2?

Form W-2 (Wage and Tax Statement) is a tax form that reports the amount of money your employer paid you and income tax withholding from your wages in the previous year.

An employer must provide a completed W-2 form for each employee on their payroll, but not for independent contractors–independent contractors fill out  Form 1099 instead. Then, the employee files this form with the internal revenue service (IRS) when the time comes for calculating tax returns.

Check out our blog on W-2 employees vs. 1099 contractors for a deep dive into the differences.

What information does a W-2 include?

Your W-2 asks for the following information:

Note: Box 9 is outdated. Leave it blank.

What is a W-2 employee?

A W-2 employee is a worker on a company’s payroll, hired and managed by that company, usually with a full-time work schedule. They receive pay stubs, usually every couple of weeks, without invoicing the company. 

W-2 employees also receive statutory employee benefits and other forms of compensation per company policy and local law. Standard benefits are sick pay, unemployment insurance, and worker’s compensation. Companies with 50 or more employees must provide affordable health insurance to W-2 employees. 

People commonly refer to full-time employees as W-2 employees precisely because of the W-2 tax form they receive from their employer.

Employers are responsible for paying payroll tax taxes to the government for each W-2 employee. The employee also withholds federal income tax from your paychecks (that’s why there’s a difference between gross pay and net pay). These additional withholdings include social security tax, medicare tax, and employment tax. If you weren’t a W-2 employee, you’d have to pay the IRS yourself. 

If you were on the payroll and had taxes withheld, you will receive a W-2 regardless of how long you work with the company.

For example, someone works at a company for a summer as a W-2 contractor. They work on a provisional, temporary basis. Still, if the worker is on their employer’s payroll and has taxes and contributions withheld, the worker is a W-2 employee (not an independent contractor). The employee will report their income on a W-2, not a 1099-NEC. If the worker pays their own taxes and files invoices instead of being on the company’s payroll, they are an independent contractor and would file the 1099-NEC, not the W-2.

What are W-2 employee benefits?

W-2 employee benefits refer to the non-monetary compensation an employer provides for W-2 employees on their payroll. A significant advantage of W-2 employment is relying on your employer to cover a portion of your taxes. Here’s a list of the most common mandatory and optional employee benefits:

  • FICA taxes, which refer to Medicare and Social Services taxes
  • Worker’s compensation
  • Unemployment insurance
  • Health insurance, sometimes even as a private plan, depending on the size of the employer
  • Family and Medical Leave Act (FMLA) protection, which refers to unpaid leave, but most employers allow some form of paid time off
  • Disability insurance
  • Retirement plans

What's the purpose of a W-2?

The purpose of the IRS form W-2 is to help you file your federal and state income taxes correctly. The form contains information about your annual income and the amount of taxes your employer withheld from your gross salary during the prior year for FICA taxes, retirement plans, etc. The IRS uses this information to determine the employee paid all taxes and wages appropriately and according to local and federal regulations. 

The IRS also uses the W-2 to determine whether you’re eligible for tax refunds, or tax returns. If you overpaid based on your wages earned, you might receive a check in the mail with reimbursements from the IRS.

When do you fill out and submit W-2s?

In 2022, the due date to file your taxes, including Form W-2 is April 18.

The last day for your employer to send you the W-2 form is January 31st. After that date, they may face penalties for being late. Don’t be shy about asking your employer: this is their legal responsibility. They might also have an explanation to calm your nerves. For instance, they may have acquired a 30-day filing deadline extension from the IRS.

How can I get a W-2 form?

Employers provide you with a copy of your W-2 via mail or email, or even directly if you work in person. You can also download a W-2 copy in PDF form on the IRS website.

How do I file the W-2 online?

You can e-file your W-2 through whatever tax service you use, such as TurboTax, if you use one. If you don’t use this kind of tax service, you can file your W-2 online directly with the Social Security Administration’s Business Services Online

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Are there multiple copies of W-2s?

Yes, copies of your W-2 form will go to you, your employer, and the IRS.

  • Copy A: You send to the Social Security Administration (SSA) by the year’s tax deadline
  • Copy B: You keep on hand until you file it as part of your federal income tax returns
  • Copy C: You keep it in your records (for at least three years)
  • Copy D: Your employer keeps it for their records
  • Copy 1: Your employer files it with your state, city, or local department if asked to do so
  • Copy 2: You keep this copy and file it with your state, city, or local tax authority if asked to do so

What if I have W-2s from multiple employers?

You will receive a W-2 from each employer you had during the previous tax year. Receiving W-2s from multiple employers isn’t a problem: wherever you file your W-2 will have fields for additional W-2s. 

What if I get multiple W-2 from the same employer?

Receiving multiple W-2 forms from the same employer is uncommon: check with your employer if this occurs because it might be an error. There are a few exceptions when receiving multiple W-2s from the same employer is intentional and accurate, such as if the business was acquired and the EIN changed during the prior year. But if the forms are identical (including the EIN), the forms are likely duplicates. You can file one and discard the other.

What's the difference between Form 1099 and W-2?

The difference between Forms 1099 and W-2 is who they’re for. Independent contractors and other self-employed workers get Form 1099-NEC (or the 1099-MISC until 2020) when tax filing. Employees file Form W-2.

Read more about the differences between 1099 and W-2 forms and employees.

What's the difference between Form W-4 and W-2?

The difference between IRS Forms W-4 and W-2 is their purpose and cadence. You submit a W-4 form when you start a new job. It informs your employer of the amount of taxes they should withhold from your salary. On the other hand, you submit W-2 every tax year.

What's the difference between Form 1040 and W-2?

A 1040 is where you file deductions to demonstrate why the IRS should refund you for part of the taxes you paid over the previous year. Unlike the W-2, your employer does not provide the 1040. You can access your 1040 online on the IRS official website and use it to file your tax returns.

W-2 equivalent for non-US employees

W-2 tax form is for US citizens only. If you’re a foreigner working for a US company and living in the US, you need to fill out form 1042-S and file it with the IRS since your income is US-sourced.

If you work remotely and outside of the US, your income is probably subject to taxes in your own country and not in the US–even if the company is US-based. For this purpose, it’s useful to learn if the US has a tax treaty with your country: an agreement that prevents double taxation.

Further reading on the W-2 and similar tax forms

If you want to know more about different tax forms for employees and contractors hired by US employers, here’s what to read next:

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