What Is the Locality Name on a W-2?

The W-2 form, or Wage and Tax Statement, serves as a comprehensive record of an employee’s annual earnings and the taxes withheld by their employer. Provided yearly, it contains various pieces of information, including federal, state, and local tax details. The W-2 includes a specific section for “locality name,” which provides information about local tax obligations.

Defining Locality on a W-2

The term “locality” on a W-2 refers to a specific geographic area that has the authority to levy its own income taxes, separate from federal or state taxes. These local tax jurisdictions can encompass a range of entities, such as cities, counties, school districts, or other municipal bodies. For example, certain cities like New York and Philadelphia are known for imposing local income taxes on residents or those who work within their boundaries.

Employers are obligated to withhold these local income taxes from an employee’s wages if the employee lives or works in such a jurisdiction. The reporting of this information on the W-2 ensures transparency regarding these specific tax withholdings.

Local income taxes are distinct from federal and state income taxes. Not all states or areas within states impose local income taxes; for instance, states without a state income tax typically do not have local income taxes either. However, in states where local income taxes are common, such as Ohio and Pennsylvania, this W-2 section becomes a regular part of the tax reporting process.

The specific local tax laws determine whether withholding is based on an employee’s residence, work location, or both. An employee might live in one locality but work in another, potentially subjecting them to tax obligations in both areas. Employers must correctly identify the taxing jurisdiction to ensure proper withholding and reporting.

Identifying Locality Information on Your W-2

To locate locality information on your W-2 form, look for specific boxes typically found towards the bottom. Box 20 is designated for the “Locality Name,” which identifies the city, county, or other local jurisdiction to which local taxes were paid. This box provides a brief description of the taxing authority.

Box 19 reports the “Local Income Tax” withheld from your paychecks throughout the year. Box 18, labeled “Local Wages, Tips, Etc.,” indicates the portion of your wages that is subject to these local taxes.

It is common for Boxes 18, 19, and 20 to be blank if the employee does not work or reside in a jurisdiction that imposes local income taxes. If Box 19 has an amount but Box 20 is blank, contact your employer for clarification or a corrected W-2. In some cases, if local tax was withheld but no specific locality name is provided, you might be able to enter the state initials in Box 20.

The Role of Locality Information in Tax Filings

The locality name and associated tax information on your W-2 are crucial for fulfilling local tax obligations. This data enables you to report correct amounts to the relevant local taxing authorities. The amount reported in Box 19, representing local income tax withheld, is generally credited against your total local tax liability.

Many jurisdictions require taxpayers to file separate local income tax returns, even if tax has already been withheld by their employer. This ensures the local government receives necessary information to reconcile payments. The filing deadline for these local returns is typically April 15, similar to federal and state tax deadlines.

If you lived or worked in multiple localities, you might have multiple entries in Boxes 18, 19, and 20 on your W-2, or even receive multiple W-2s. Each of these entries must be accounted for when preparing your local tax returns. Tax preparation software often prompts you to input this information, which then helps calculate any additional tax owed or refund due.

Locality information ensures compliance with local tax laws and supports the proper allocation of tax revenue. If uncertain about your local tax filing requirements or the information on your W-2, consult the local tax department for guidance. Accurate reporting prevents potential issues such as underpayment penalties or delays in processing any refunds.