What is a W2 in the United States?

W2 is the statement of your salaries and wages that you get from your employer, and you report this income on your 1040 individual income tax return.

Every employer in the United States has to issue a W2 to its employee after the end of the calendar year. In this W2, the employer states the gross amount of salaries and wages paid to the employee and the amount of Social Security Tax, Medicare tax, and Income tax withheld during the year.

The W2 must also include the name of the employee, his/ser social security number, his address, the name of the employer, the employer’s address, and the employer’s tax identification number.

The employer also has to file a copy of the W2 to IRS by the end of January following the end of the calendar year. In this filing, the employer also includes a summary return stating the gross amount of all wages and salaries paid to all employees, taxes withheld, and the total amount remitted to IRS. In the United States the employer files the summary on W3.

W2 has two parts, the first part is federal reporting while the second part is state reporting. In the United States, the income tax is assessed separately by the federal and states government. Some of the states may not have individual income-tax and in this case you do not need to report.

In addition to the gross wages paid, the employer must also record the amount or value of any other benefit provided to the employee. If the employer has set up a 401 plan or other retirement plans, the employer must also record the contribution made to that plan.