Why Is the Form W-2 Needed to File a Tax Return?

Employers are required to issue Form W-2, Wage and Tax Statement, to each employee, which summarizes their total earnings and taxes paid throughout the year. This document serves as the primary record of a person’s employment income and tax withholding. It provides the official, verified figures needed to report to the government for an accurate tax filing.

Reporting Your Income and Withholding

Form W-2 provides the financial data required to complete an individual income tax return, like Form 1040. Each box on the form corresponds to a different piece of financial information for calculating tax liability. The figures on this form are the official numbers that must be reported, as using estimates can lead to processing delays with the Internal Revenue Service (IRS).

Box 1, “Wages, tips, other compensation,” represents the total taxable income paid by the employer. This amount is the starting point for calculating federal income tax and is entered onto the income section of Form 1040. Box 2, “Federal income tax withheld,” shows the total federal income tax the employer has sent to the IRS on the employee’s behalf, which is used to determine if the taxpayer will receive a refund or owe additional tax.

Other boxes provide details for calculating Social Security and Medicare taxes, which also affect future Social Security benefits. Box 3 reports earnings subject to Social Security tax, up to the annual wage base limit of $176,100 for 2025. Box 5 shows the total wages subject to Medicare tax, which has no wage limit. The corresponding amounts of tax withheld are in Box 4 and Box 6. An Additional Medicare Tax of 0.9% also applies to wages exceeding certain thresholds based on filing status, such as $200,000 for single filers.

The IRS Verification Process

Employers do not just send a copy of the W-2 to their employees; they are also required to file a copy of every W-2 with the Social Security Administration (SSA) by January 31 each year. The SSA records the earnings to calculate future retirement benefits and then shares this data with the IRS. This makes the W-2 a central part of the government’s tax compliance system.

This data sharing enables the IRS to run an automated income verification program. When a taxpayer files a return, the reported income and withholding amounts are cross-referenced with the figures submitted by their employer. If the numbers on the tax return do not align with the employer-provided data, it triggers an IRS notice, which can lead to refund delays, additional taxes, and potential penalties.

This direct reporting from employers provides the IRS with reliable, third-party verification of an individual’s income. The matching process is why using the exact figures from the W-2 is a requirement for a smooth and accurate tax filing.

Procedures for a Missing or Incorrect W-2

If you do not receive your W-2 or find an error on it, there are specific steps to follow. The first action is to contact the employer to request a copy or a corrected form. Employers are required to provide employees with their W-2 by January 31 and will often promptly address such requests.

If contacting the employer is unsuccessful and the form has not arrived by the end of February, contact the IRS directly. After verifying your identity and providing details about the employer, the agency will send a letter to the employer requesting the missing form. If the W-2 is still unavailable by the tax filing deadline, you must file using Form 4852, Substitute for Form W-2. This requires estimating wages and taxes withheld using your final pay stub.

If your W-2 contains incorrect information, first request a corrected form, known as a Form W-2c, from the employer. If the employer fails to provide one, you can contact the IRS for assistance. If the filing deadline is near and the corrected form has not been received, use Form 4852 to file, explaining the discrepancy. If a W-2c arrives after you have filed and shows different figures, an amended return using Form 1040-X must be filed.