Form W-2 Boxes


Form W-2 Example Image

The Form W-2 is made up of a series of boxes. Each of these boxes displays a summation of different types of wages paid to the employee during the calendar year listed on the form. Descriptions of the information used to populate the Form W-2 are available below. Only those boxes and codes used at IU are defined.

Box 1 - Wages, tips and other compensation

This amount is calculated using the following information:

  • Earnings subject to Federal income tax paid during the year.

    Monthly employees are paid in January for December earnings.

  • Plus any taxable benefits received (non-cash fringe benefits).
  • Minus before-tax deductions (e.g. medical and dental insurance, parking, tax deferred retirement contributions).
  • Minus any wages that will be reported on a Form 1042-S as treaty exempt income (applicable to nonresident alien, or NRA, employees).
  • To determine your YTD earnings and deductions from payroll, please review the "How do I re-calculate my Box 1 of my W-2?" on the FAQ page.

 

Box 2 - Federal income tax withholding

Reflects the amount of actual federal income tax withheld on your paychecks during the year. If you believe the figure on your form is incorrect, please refer to your pay statement where it reflects the amount withheld from each check and the year-to-date (YTD) figure. Review the View Paychecks Online page to learn how to access your pay advices in One.IU.

 

Box 3 - Social security wages

Social Security wages are generally calculated the same as Federal wages with a few exceptions:

  • Employee contributions to a tax deferred account or the IU Retirement Savings Plan are subject to Social Security and Medicare taxes at the time of payment. They will be subject to Federal income tax at the time they are withdrawn from the retirement account.
  • The Social Security wage base is adjusted annually which means that wages are subject to Social Security until they reach a specified limit. For information about the annual wage base, please visit the Social Security Administration website.
  • Generally, the wages of individuals enrolled in courses for credit are considered to be exempt from Social Security tax. However, if the individual is working in a career type position (as determined by IU), the exemption will not be allowed and Social Security taxes will be withheld. The eligibility verification occurs each time a paycheck is confirmed and does not require any action on the part of the employee/student in order for the exemption to occur.
  • The wages of a nonimmigrant with an immigration classification of J-1, F-1, M-1, or Q-1 may be considered exempt wages for Social Security purposes if the individual is considered a nonresident alien for tax purposes during that year. Individuals are required to submit paperwork to the tax department to perform the eligibility analysis. If you believe your wages were incorrectly classified as Social Security wages, please contact us.

 

Box 4 - Social security tax

Social Security tax is currently 6.2% of the Social Security wages and tips. If the proper amount of tax was not withheld from the employee earnings, the university is required to pay the tax on behalf of the employee. This payment of the tax by the university results in additional taxable income to the employee.

 

Box 5 - Medicare wages and tips

Medicare wages are generally calculated the same as Federal wages with a few exceptions:

  • Employee contributions to a tax deferred account or the IU Retirement Savings Plan are subject to Social Security and Medicare taxes at the time of payment. They will be subject to Federal income tax at the time they are withdrawn from the retirement account.
  • Generally, the wages of individuals enrolled in courses for credit are considered to be exempt from Medicare tax. However, if the individual is working in a career type position (as determined by IU), the exemption will not be allowed and Medicare taxes will be withheld. The eligibility verification occurs each time a paycheck is confirmed and does not require any action on the part of the employee/student in order for the exemption to occur.
  • The wages of a nonimmigrant with an immigration classification of J-1, F-1, M-1, or Q-1 may be considered exempt wages for Medicare purposes if the individual is considered a nonresident alien for tax purposes during that year. Individuals are required to submit paperwork to the tax department to perform the eligibility analysis. If you believe your wages were incorrectly classified as Medicare wages, please contact us.

 

Box 6 - Medicare tax withheld

Medicare tax is currently 1.45% of the Medicare wages and tips. If the proper amount was not withheld from the employee earnings, the university is required to pay the tax on behalf of the employee. This payment of the tax by the university results in additional taxable income to the employee.

This box also includes any additional Medicare taxes withheld from the employee’s paycheck. The additional Medicare rate is currently 0.9 percent and is withheld on wages over $200,000 during a calendar year. For more information on additional Medicare, please visit the IRS Additional Medicare Tax page.

 

Box 7 - Social security tips

The amount of earnings that were reported by an employee to the employer as tips received. Tips are usually paid to individuals working in the hotel and restaurant industry.

 

Box 10 - Dependent care benefits

The total amount of dependent care benefits that you elected to have withheld from your earnings to use for purposes of eligible dependent and child care expenses.

 

Box 12 - Special codes

  • Code A - Uncollected Social Security tax on tips - the employer is not required to pay the employee portion of social security taxes that could not be withheld on a reported tip amount
  • Code B - Uncollected Medicare tax on tips - the employer is not required to pay the employee portion of Medicare taxes that could not be withheld on a reported tip amount
  • Code C - Additional group term life insurance provided to an employee as a fringe benefit that exceeds $50,000. This amount is also included in Boxes 1, 3, and 5 as required. An employer is permitted to provide up to $50,000 per employee as a nontaxable benefit.
  • Code DD – Cost of Employer-Sponsored Health Coverage – the total amount paid by both the employer and employee for health coverage. Please note this is reported to the IRS for informational purposes only.
  • Code E - IRC 403(b) elective deferrals to a tax-deferred account (TDA) and the associated catch-up contributions available to individuals with 15 years of service and age 50 and over.
  • Code G - IRC 457(b) elective deferrals to the IU Retirement Savings Program and the associated catch-up contributions available to individuals as a special catch-up and age 50 and over.
  • Code P - Moving expenses that were reimbursed by IU to an employee for expenses that were considered deductible moving expenses. These amounts are not reported in Boxes 1, 3, or 5. The IRS requires this information so they can compare the reimbursed amount with the individual income tax return where the individual might also be claiming a deduction for moving expenses.
  • Code W - Employer contributions (including amounts the employee elected to contribute using a section 125 (cafeteria) plan) to your health savings account. Report on Form 8889, Health Savings Accounts (HSAs).

 

Box 13 - Checkbox

Retirement Plan will be checked for those employees that received base retirement contributions from IU.

 

Box 14 - Other

  • Code O: Other - Other fringes; includes the taxable value of other fringe benefits such as employee discounts, non-overnight per-diem payments, executive coverages, non-cash award items, gift cards, and taxable moving expenses paid directly to a vendor.
  • Code P: Personal Use of Vehicle - taxable value of personal use of an employer provided vehicle. Contact taxpayer@indiana.edu with questions.
  • Code Q: Tuition Benefit - the taxable value of employer provided Tuition Benefit that was applied to the student account for graduate level fees.
  • Code R: Athletic Fringes - Fringe benefits associated with athletics such as complimentary athletic tickets and clothing.

 

Box 16 - State wages, tips, etc.

The State wages will match the Federal wages for most employees. Individuals that submitted an Indiana Form WH-47 to claim the benefits of a reciprocal agreement with their state of residence will either have a state wage lower than their federal, or no state wage, depending on the time of year the WH-47 was submitted.

 

Box 17 - State income tax

Reflects the amount of actual state income tax withheld on your paychecks during the year. If you believe the figure on your form is incorrect, please refer to your pay advices where it reflects the amount withheld from each check and the year-to-date (YTD) figure. Review the View Paychecks Online page to learn how to access your pay advices in One.IU.

 

Box 18 - Local wages, tips, etc.

Indiana requires your Indiana wages to be subject to local income tax based on your principal place of residence or your principal place of employment as of January 1. When an employee is hired, we default the locality to be based on the campus associated with your job.

  • If you never submit a WH-4 indicating different information, your wages will be recorded on the W-2 with this default locality.
  • If you submitted a WH-4 indicating you were not in Indiana as of January 1, your wages will not be subject to Indiana local income tax. Please review your pay advice using the Employee Center task tile in One.IU to view the locality for which your wages are being accumulated. If the locality is incorrect, please update your WH-4 in the Employee Center. This new information will be used to accumulate your Indiana local wages during the current year. The tax department is unable to correct the locality after the W-2 is issued. You will be able to record the correct locality for income tax purposes when you file your Indiana income tax return.

Please note that some states do not have taxing localities and therefore those states will not have an amount in this box.

 

Box 19 - Local income tax

Reflects the amount of actual local income tax withheld on your paychecks during the year. If you believe the figure on your W-2 form is incorrect, please refer to your pay advices where it reflects the amount withheld from each check and the year-to-date (YTD) figure. Review the View Paychecks Online page to learn how to access your pay advices in One.IU.

If you filed a WH-4 mid-year which modified the locality your wages were subject to, you may notice that the taxes withheld have been moved from the original locality into the locality in effect as of January 1. Many times, this adjustment occurs after the final pay advice is issued for the calendar year. In some cases, the local tax that was withheld will be refunded to you (if you filed a WH-4 indicating you were not subject to Indiana local tax) or it may have been moved to your state income tax balance.

 

Box 20 - Locality name

For Indiana, the Locality name reflects the two digit locality number as assigned by the State of Indiana. These numbers are assigned from 1 to 92, alphabetically, based on the Locality name.