Form W-2
Wage and Tax Statement
Who Must File
Employers issue Form W-2 to employees; employees do not file the W-2 but must use it to accurately report wages, withholdings, and benefits on their Form 1040. Canadians working in the US receive this form from their US employer.
Deadline
Employers must issue W-2 by January 31; employees use it when filing Form 1040 by April 15
Penalty
Employees face no penalty for W-2 itself, but failing to report W-2 income on Form 1040 triggers underreporting penalties of 20% on the underpayment
Step-by-Step Filing Instructions
Verify your name, SSN or ITIN, and employer information in Boxes a through f.
Review Box 1 (wages, tips, other compensation) and confirm it matches your records.
Check Box 2 for federal income tax withheld, which will be credited on your Form 1040.
Review Boxes 3-6 for Social Security and Medicare wages and withholdings.
Note Box 12 coded entries for retirement contributions (e.g., code D for 401(k)), group life insurance, and other items.
Report Box 1 income on your Form 1040 line 1a and withholdings on Schedule 3 or the appropriate line.
Convert W-2 income to Canadian dollars for your T1 return if you are also filing in Canada.
Tips & Best Practices
If you did not receive your W-2 by mid-February, contact your employer and, if necessary, the IRS at 800-829-1040.
Box 1 may differ from your gross salary due to pre-tax deductions like 401(k) contributions and health insurance premiums.
Canadians who also file a T1 should report the same W-2 income in CAD and claim a foreign tax credit on T2209 for the US tax withheld.
If you worked in multiple US states, you may receive separate state W-2 entries in Boxes 15-17.
Keep your W-2 for at least 4 years after the filing date in case of IRS audit.
Frequently Asked Questions
How do I report W-2 income on my Canadian tax return?
Convert the Box 1 amount to Canadian dollars using the Bank of Canada annual average exchange rate and report it as foreign employment income on your T1. Claim the foreign tax credit on T2209 for US federal tax withheld (Box 2).
What if my W-2 has errors?
Contact your employer and request a corrected W-2 (Form W-2c). Do not file your return with incorrect information. If your employer does not respond, contact the IRS for assistance.
Do Social Security and Medicare taxes on my W-2 count toward the Foreign Tax Credit in Canada?
No. Under the Canada-US Tax Treaty and Totalization Agreement, Social Security and Medicare taxes are not income taxes and do not qualify for the foreign tax credit on the T2209. Only federal and state income taxes qualify.
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