A W-2 form is the United States tax document an employer issues each year to report an employee's wages and the taxes withheld from their pay. Officially the Wage and Tax Statement, it is the central record a US employee uses to file an income tax return. It applies only to employees, not to independent contractors, which is why it pairs with two other US forms: the 1099 for contractor payments and the W-9 used to collect a contractor's tax details.
What does a W-2 report?
The W-2 summarizes a full year of pay and withholding for one employee. Its main contents are these.
- Wages earned: total taxable wages, tips, and other compensation for the year.
- Taxes withheld: federal and state income tax, plus Social Security and Medicare withholding.
- Identifiers: employer and employee details used to match the form to tax records.
Who receives a W-2?
The W-2 is tied to employee status, which is the key point for classification. A few rules apply.
- Employees only: anyone on the company's US payroll as an employee gets a W-2.
- Not for contractors: independent contractors receive a 1099 instead, with no tax withheld.
- Annual deadline: employers must provide W-2s to employees early in the following year.
W-2 vs 1099 vs W-9
These three US forms are easy to mix up, but each serves a distinct purpose, as the table shows.
| Form | Used for | Tax withheld |
|---|---|---|
| W-2 | Employee wages | Yes |
| 1099 | Contractor payments | No |
| W-9 | Collecting contractor details | Not applicable |
This information is for general guidance. Confirm current US requirements and consult tax experts for your specific situation.
Ready to build your India team?
Talk to our experts about compliant hiring, payroll, and EOR in India, with transparent costs and no local entity required.
Ready to build your India team?
Tell us who you're looking to hire. We'll walk you through exactly how the setup works for your company, your timeline, and your budget.