W-2 Wage and Tax Statement Explained

The W-2 form is a United States federal wage and tax statement that an employer must give to each employee and, also send to the Internal Revenue Service (IRS) every year.  As a City Government Employee, your W-2 Wage and Tax Statement itemizes your total annual wages and the amount of taxes withheld from your paycheck.

Sample W-2

Box A: Employee's Social Security Number

Your taxpayer identification is your social security number (SSN). The IRS uses SSNs to verify the data it receives from the City against the amounts shown on employees' tax returns. The Social Security Administration uses SSNs to record employee earnings for future social security and Medicare benefits.

If your SSN is incorrect, present your social security card to your Personnel Office immediately. The Personnel Office will forward a copy of your social security card to OPA along with a W-2 Duplicate Request form or a W-2 Correction Request Form. OPA will verify your information with the Social Security Administration and then issue a corrected W-2.

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Box B: Employer's Identification #

This is the employer identification number (EIN) assigned by the IRS to The City of New York, Department of Education, City University of New York, New York City Housing Authority, or New York City Municipal Water Finance Authority.

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Box C: Employer's Name, Address, and Zip Code

This is your employer's address for tax reporting purposes.

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Box D: Control Number

Your agency's payroll number and payroll distribution code are shown here to assist in the distribution of W-2s.

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Box E: Employee's Name, Address, and Zip Code

This reflects your name and address in the City's Payroll Management System. If your name changes, your earnings cannot be posted by SSA until your social security records are updated. You can report a name change to SSA by calling 1-800-772-1213. If your name is incorrect, you should notify your agency. A corrected W-2 will be issued. If your address is incorrect, you can still use the W-2. You should change your home address in NYCAPS Employee Self-Service (ESS) or report address changes to your agency.

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Tax Year

This is the calendar year covered by the W-2. 

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Copy

You receive three copies of your W-2:

  • Copy A - attach it to your state and city or other local tax return
  • Copy B - attach it to your federal tax return
  • Copy C - keep it for your records

The City also sends wage and tax information to the Social Security Administration and the New York State Department of Taxation and Finance.

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Box 1: Wages and Other Compensation

This box represents your taxable wages (requested when filing federal and New York State tax returns). This includes the gross wages and other compensation paid to you during the year and certain taxable fringe benefits. Taxable benefits include:

  • Union legal service
  • Motor Vehicle use
  • Parking
  • TransitBenefit administrative fringe fee for the Premium TransitChek MetroCard
  • Health insurance for a domestic partner
  • Health Club Reimbursement

Payments to the Health Buy-Out Waiver Program are also reflected in Box 1.

Box 1 is reduced by contributions to deferred compensation and/or tax deferred annuity accounts, pension plan, TransitBenefit, and other programs that are not subject to federal taxes. These amounts are shown in Boxes 12 and 14.

Benefits Included in Box 1:

Taxable fringe benefits, including union legal services, education, motor vehicle use, parking, TransitBenefit administrative fees for the Premium TransitChek MetroCard, and Health Club Reimbursement are shown in Box 14. The amount for taxable fringe benefits is included in Box 1.

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Box 2: Federal Income Tax Withheld

The amount of federal income tax withheld from your wages for the year is shown in Box 2.

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Box 3: Social Security Wages

The total wages paid subject to social security are shown here. The total in Box 3 should not be more than $118,500, the maximum social security wage base for 2015. If more than $7,347 (6.2% of $118,500) was deducted during the year, OPA will issue you a refund by the beginning of April.

Social security wages are reduced for health insurance premiums, TransitBenefit, and some flexible spending program contributions. Social security wages are not affected by deferred compensation or pension contributions.

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Box 4: Social Security Tax Withheld

Box 4 shows the total social security tax withheld from your pay during the year. Most employees pay 6.2% of covered wages, up to $118,500 in 2015 for social security tax.
If more than $7,347 was withheld in 2015, OPA will issue you a refund by the beginning of April. If you do not receive a refund that is owed to you by the beginning of April, contact your agency's Payroll Office.

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Box 5: Medicare Wages

The wages subject to Medicare tax are the same as those subject to social security tax in Box 3, except there is no wage base limit for Medicare tax.  Medicare wages are reduced for health insurance premiums, TransitBenefit, DeCAP, and HCFSA contributions. Medicare wages are not affected by deferred compensation or pension contributions.

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Box 6: Medicare Tax Withheld

Box 6 shows the total Medicare tax withheld from your pay during the year. Most employees pay 1.45% of covered wages for Medicare tax. There is no maximum Medicare wage base for the Medicare portion of FICA. FICA is comprised of Medicare and social security.

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Box 10: Dependent Care Benefits (DeCAP)

Box 10 shows contributions to DeCAP made through payroll deductions. Contributions to DeCAP are not subject to federal, social security, and Medicare taxes. Consequently, the amounts in Box 1 for taxable wages and Boxes 3 and 5 for social security and Medicare wages are reduced by the amount of the contribution. DeCAP contributions are subject to New York State and City taxes and must be added back to Box 1 when filing New York State and City tax returns. Amounts for DeCAP are shown in Box 14 as well.

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Box 11: Nonqualified Plans

Box 11 does not apply to NYC W-2s and will be blank.

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Box 12: Tax Deferred Annuities (TDA)

If you participate in a TDA plan, your contributions are shown in Box 12. Participation in a 401(k) Plan is designated by Code D. Contributions to a 403(b) Plan is designated by Code E. Contributions to a 457 Deferred Compensation Plan are designated by Code G.

TDA contributions are not subject to income taxes. Your taxable wages shown in Box 1 and state and City wages shown in Boxes 16 and 18 reflect a reduction because of your TDA contributions. You file your federal, state, and city tax returns on the lower reported wage amount.

TDA contributions are subject to FICA taxes. Consequently, your wages shown in Boxes 3 and 5, for social security and Medicare taxes, may be greater than the wages recorded for income tax purposes in Boxes 1, 16, and 18.

Cost of Employer-Sponsored Health Coverage As part of the Patient Protection and Affordable Care Act of 2010, employers are required to report to each employee the aggregate (employer and employee/retiree) cost of employer-sponsored group health plans. The amount appears in Box 12 labeled as "DD". The amount in Box 12 labeled as "DD" is for informational purposes only and as per the W-2 instructions is not taxable.

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Box 13: Retirement Plan

This box will indicate eligibility for pension plan membership. The IRS defines an employee as belonging to a pension plan if that employee is eligible to join a pension plan regardless of whether the plan is joined.

"Retirement Plan" in Box 13 will be checked, except for the following:

  • Retirees receiving W-2s for legal service fringe
  • Hearing Officers (PVB) with wages only from the Department of Finance
  • Retirees who retired prior to calendar year 2015 and are drawing a City pension and receiving wages from City employment
  • Terminated employees who have no wage record for calendar year 2015 but received other types of pay requiring a W-2.

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Box 14: Other

IRC414H for Pension Contributions
If you are a pension member, your taxable wages in Box 1 are reduced by the amount of your pension contributions. Your contribution, shown in Box 14, is not subject to federal income tax, but is subject to FICA (social security and Medicare), state, and local taxes.

To obtain your taxable wages for New York State and City, add the amount in Box 14 to that in Box 1. Only standard pension deductions and certain "buy back" deductions are included in the IRC414H amount. Pension loan repayment deductions are not included.

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IRC125 for Pre-Tax Benefit Programs
Payroll deductions covered under the Internal Revenue Code Section 125 for flexible spending account programs are shown in this box. These include deductions for:

  • Health insurance premiums
  • Dependent Care Assistance Program (DeCAP)
  • Health Care Flexible Spending Account (HCFSA)

If you added a domestic partner to your health insurance, a portion of the amount paid by the City is taxable and is included in Box 14.

The amount reflected in the IRC125 box is treated on a pre-tax basis for federal income purposes and reduces taxable wages in Box 1 and social security and Medicare wages in Boxes 3 and 5. The reduction in year-to-date earnings shows in your W-2, not in your pay statement.

The amount in the IRC125 box for health insurance premiums, DeCAP, and HCFSA is subject to state and City taxes and must be added back to the taxable wages in Box 1 when you file your taxes. The amount for DeCAP is shown in Box 14 and Box 10.

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IRC132 for TransitBenefit
Payroll deductions covered under the Internal Revenue Code Section 132 for TransitBenefit are shown in this box.

The amount shown in the IRC132 box reflects pre-tax TransitBenefit contributions. Participating employees' taxable wages in Box 1, social security and Medicare wages in Boxes 3 and 5, and State and City wages in Boxes 16 and 18 will be reduced by the annual amount of TransitBenefit deductions.

IIM/IMP for Domestic Partner Benefit
The W-2 form includes the taxable value of providing City health plan and/or union welfare fund coverage for your domestic partner.

IMP- Imputed Income (The taxable value of the employer contribution for health benefits provided to a retiree's domestic partner.) This amount is included in Box 1 and must be reported for Federal, State and Local taxes. This amount is shown in Box 14 labeled as "IMP".  The City paid your Social Security (Box 4) and Medicare (Box 6) taxes. Therefore, your taxable wage amounts (Boxes 1, 3 and 5) have been increased accordingly.

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Box 15: Name of State

New York.

Note for WASHINGTON DC RESIDENTS:
The Washington D.C. (District of Columbia) regulations require all employers to report wages that were earned by the employee who both worked and lived in Washington D.C., in Box 16. These employees have WASH DC as their state).

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Box 16: State Wages, Etc.

This box contains the wages reported in Box 1. The following is not subject to state tax:

  • Tax Deferred Annuity and Deferred Compensation Plan (Box 12)
  • IRC132 for TransitBenefit (Box 14)
  • Domestic Partner Benefit (IMP) (Box 14)
  • Same Sex Spouse Benefit (IIM) (Box 14)

The following are subject to state tax and included in Box 16:

  • Union Legal Service Benefit
  • Motor Vehicle Use Fringe Benefit
  • Parking Fringe Benefit
  • Health Buyout Waiver Payment
  • Domestic Partner Health Insurance Premiums
  • Health Club Reimbursement

The following are subject to state tax and must be added to state wages on your individual tax return:

  • Pension Deductions (Box 14)
  • Health Insurance Premiums (Box 14)
  • Dependent Care Assistance Program (DeCAP) Deductions (Box 14 and Box 10)
  • Health Care Flexible Spending Account (HCFSA) Deductions (Box 14)

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Box 17: State Income Tax Withheld

This box shows the amount of state income tax withheld for the year.

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Box 18A: Local Wages, Etc.

This box shows the wages reported in Box 1.

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Box 18B: Local Wages, Etc.

This box shows the wages reported in Box 1.

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Box 19A: Local Income Tax

This box shows New York City taxes withheld.

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Box 19B: Local Income Tax

This box shows Yonkers taxes withheld for Yonkers residents only.

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Box 20A: Locality

This box shows New York City as the locality for tax purposes.

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Box 20B: Locality

This box shows Yonkers as the locality for tax purposes, for Yonkers residents only.

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