Form W-2 Wage and Tax Statement FAQs

• Are there changes to the 2025 Form W-2?
• What does “No Tax on Overtime” mean?
• Will I see more money on pay day?
• How does the law change my tax withholding?
• When does the new law take effect?
• What are those limits
• What is qualified overtime?
• How will I know how much qualified overtime I have earned?
• Where can I go to learn more?
• What does "No Tax on Tips" mean?
• Will I see more money on pay day?
• How does the law change my tax withholding as a tipped employee?
• When does the new law take effect?
• What are those limits?
• What are qualified tips?
• Will this law affect my wage base or hourly pay?
• How will I know my tip earnings for the year?
• Where can I learn more?
• Whom should I contact if my Form W-2 was damaged?
• I think my personal information has been compromised, whom do I contact?
• Why did I receive this Form W-2?
• When will my Form W-2 be mailed or available to view in California Employee Connect (CEC)?
• What if I have not received my Form W-2 or my mailing address has changed?
• What wages are reflected on the Form W-2?
• Why is the year-to-date gross on my final earnings statement/direct deposit advice different from what is shown in Box 1?
• Are Non-Industrial Disability Leave (NDI) payments considered wages?
• What are the maximum wages subject to Social Security?
• What are the maximum wages subject to Medicare?
• Why is Retirement Plan “X’d” in Box 13?
• Why are the wages reported in Box 1 different from Box 3 or Box 5?
• Why are the wages reported in Box 1 Federal Wages different than Box 16 State Wages?
• What is the Dependent Care maximum contribution?
• Will Overtime and/or Tips be included on the Form W-2?
• Are Fringe Benefits reported on the Form W-2?
• Are Deferred Compensation or Tax Sheltered Annuity deductions reported on the Form W-2?
• Are Part-time/Seasonal/Temporary (PST) and/or Alternate Retirement Plan (ARP) contributions reported on the Form W-2?
• What other amounts are reported in Box 12?
• What are the maximum wages subject to California State Disability Insurance (CASDI)
• What should I do if I received a Form W-2 with an incorrect social security number or two or more Form W-2s with different social security numbers?
• Whom should I contact for questions concerning federal or state income tax returns?
• Whom should I contact if I have any further questions about my Form W-2?
• How do I request a duplicate Form W-2?
• I did a name change but I received a W-2 with my former name. What do I do?
• I worked for multiple state agencies/campuses. Will I be receiving multiple Form W-2s?
• As an IHSS (In Home Support Service) employee, who do I contact to request a duplicate/corrected W-2 form?
• Where can I find information if I am eligible for the Earned Income Tax Credit?

The One Big Beautiful Bill Act (OBBBA, Pub. L. 119-21) enacted on July 4, 2025, created two major new tax deductions for workers including no tax on overtime and tips up to a certain threshold based on your federal income tax return filing status.  While there are no changes to the form and withholding, the IRS encouraged employers to provide such information by including the information in Box 14 of the employee’s Form W-2.       

“No Tax on Overtime” is part of the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025.

For tax years 2025 through 2028, qualified overtime received is exempt from federal income tax (FIT) when filing a federal tax return. However, it is still subject to FICA (Social Security and Medicare) taxes, state and CASDI withholdings.

There is no change in how you are paid.  When you file your federal income tax return (e.g. Form 1040), you may claim a deduction to reduce your taxable income on qualified overtime compensation.

There is no change to your tax withholding.  We use your Employee Action Request Form (EAR), STD 686 on file to process your pay.

Employees are encouraged to use the IRS Tax Withholding Estimator to help determine the correct withholding amount and to consult with a qualified tax professional for personalized advice.

If you wish to account for these new deductions to potentially reduce withholding, please submit a revised STD. 686, Employee Action Request to your HR Office or make the change via Cal Employee Connect.

The law went into effect retroactively on January 1, 2025. The qualified overtime has been calculated for the 2025 tax year and will be reported in Box 14 of the Form W-2. You will be able to take a deduction for all qualified overtime you have earned, up to the annual limits when you file your federal income tax return (e.g. Form 1040).

The maximum individual annual deduction is $12,500 ($25,000 for joint filers).  Please see IRS website for deduction phase-out amount. 

For employees covered under the Fair Labor Standards Act (FLSA), overtime is required for time worked over 40 hours in a work week.  This overtime is broken into two pieces of income: regular pay for the time worked plus a premium overtime amount.  Premium overtime is the half-time in “time and a half”.  It is only the premium overtime pay that is exempt from federal withholding.

Example: Jane earns $15.00 hour and works 45 hours in a work week.  She receives $37.50 in qualified overtime.

Qualified overtime: $37.50 (5 hours x $7.50 premium above $15.00 regular hourly rate)

• W-2, Box 14 shows $37.50 qualified overtime (estimate OK)

The qualified overtime you received during the year will be included in Box 14 of the form W-2.  It will be labeled as Qualified OT.

The IRS has a fact sheet on their job site that explains the provisions of the new laws that became effective during the current tax year, including “no tax on overtime”.

“No Tax on Tips” is part of the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025.

For tax years 2025-2028, qualified tips you receive are exempt from federal income tax (FIT) when filing your federal income tax return.  However, it is still subject to FICA (Social Security and Medicare) taxes , state and CASDI withholdings.

There is no change in how we pay you. When you file your federal income tax return (e.g. Form 1040) you will claim a deduction to reduce your taxable income on the qualified tips you received. 

There is no change to your tax withholding. We use your Employee Action Request Form (EAR), STD 686 on file to process your pay.

Employees are encouraged to use the IRS Tax Withholding Estimator to help determine the correct withholding amount and to consult with a qualified tax professional for personalized advice.

If you wish to account for these new deductions to potentially reduce withholding, please submit a revised STD. 686, Employee Action Request to your HR Office or make the change via Cal Employee Connect.

The law went into effect retroactively on January 1, 2025. The qualified tips have been calculated for the 2025 tax year and will be reported in Box 14 of the Form W-2. You will be able to take a deduction for all qualified tips you have earned, up to the annual limits when you file your federal income tax return (e.g. Form 1040).

The maximum individual annual deduction is $25,000. Please see IRS website for deduction phase-out amount.

Qualified tips are amounts voluntarily given by customers either in cash or added to credit card payments or through tip sharing agreements.  They do not include service charges or other charges automatically added to a customer’s bill.

No. The law focuses solely on the federal income tax treatment of tips.  It does not change the minimum wage laws, base pay, or how tips are distributed or pooled among employees.

We will include the qualified tips reported during the year in Box 14 of Form W-2.  It will be labeled Qualified Tips – FD BEV.

The IRS has a fact sheet on their site that explains provisions on the new law that became effective during the current tax year, including “no tax on tips”.

Contact your Personnel Office to order a duplicate.

Here are two suggested contacts:

• Federal Trade Identity theft hot line  1-877-438-4338
• Social Security Fraud Hotline 1-800-269-0271

Additional suggested resources:

• State References:
  • Identity Theft | State of California - Department of Justice - Office of the Attorney General
  • CalVCB - CA Victim Compensation Board
  • Law section (ca.gov)
• Federal Reference:
  • Identity theft | USAGo

If you received a Form W-2 form from Malia M. Cohen, California State Controller, you either received wages and/or had withholding or other information reported while employed with the State of California.  The State Controller, as the chief fiscal officer of California, is responsible for mailing or electronically delivering of all Form W-2s to civil service and California State University employees paid by the state's Uniform State Payroll System. Employers are required by the Internal Revenue Service (IRS) to report employees' wage and salary information on Form W-2. The amount of federal, state and other income taxes withheld from the employee's paycheck during the calendar year is reported on the Form W-2.

The State Controller's Office will mail the 2025 Form W-2s to state and California State University employees who opted to receive paper copies of their W-2s by January 31, 2026. As an alternative, you can opt-in to receiving an electronic W-2 by registering with Cal Employee Connect.

• California Employee Connect Information
  • CEC is the State Controller's web-based portal that allows you to view/print your paystubs and Form W-2s. Employees who opt-in to the new feature will be able to view and download current and previous years' Form W-2s using any internet-connected device. It will also grant them access to their Form W-2 Wage and Tax Statement earlier than employees who receive the printer version in the mail. The deadline to opt-in for the 2025 W-2 paperless statement is November 30, 2025.
  • Go W-2 Paperless today! Do not miss the opportunity to enroll in the new “W-2 Paperless” feature in your Cal Employee Connect (CEC) account. The Form W-2s will also be available in California Employee Connect by January 31, 2026.

• CEC Registration
  • Simply log into your CEC account and opt-in to "W-2 Paperless" today!  When you log in, a box will appear prompting you to enroll in "W-2 Paperless". Just follow the steps to enroll in this optional program. If you choose not to enroll in the program, you will still receive your Form W-2 in the mail and will be able to view (but not download) your Form W-2 on the site. 

If you have questions or need assistance, or would like to share some feedback, please visit CEC Help & Feedback.

Contact your Personnel/Payroll Office after January 31. Undeliverable Form W-2s are returned to your Personnel/Payroll Office by the State Controller's Office.

If the address is incorrect, the employee can do the following:

• a.  Civil Service employees can log into their Cal Employee Connect account to make changes within the portal.
• b.  Agencies/Campuses employees that do not have access to make changes in Cal Employee Connect must submit an Employee Action Request Form, STD. 686, to their personnel/payroll office with their new address.

The Form W-2 reflects wages paid by warrants/direct deposit payments issued during the 2025 tax year, regardless of the pay period wages were earned. The 2025 Form W-2 includes warrants/payments with issue dates of January 1, 2025, through December 31, 2025. The Form W-2 contains all wages and tax information for an employee regardless of the number of state agencies/campuses for which he or she worked during the tax year.

The year-to-date gross on the final earnings statement/direct deposit advice for 2025 may not agree with Box 1 (Wages, Tips, Other Compensation) due to the following items: 

• Accounts Receivable deductions 
• Salary advances, fringe benefits, employee business expense reimbursements 
• Deferred Compensation deductions 
• Pre-Tax Benefit deductions (Health, Dental, Health Care Reimbursement, Dependent Care Reimbursement, Other Post-Employment Benefits - OPEB).   Please refer to the following page for OPEB FAQs: Other Post-Employment Benefits (OPEB) FAQs - CalHR 
• Pre-Tax Parking deductions 
• Flex Benefit deductions 
• Retirement, Part-time/Seasonal/Temporary or Alternate Retirement Plan contributions 
• Labor Code Section 4800 (LC 4800) disability payments 
• Tax Sheltered Annuity deductions 
• Consolidated Benefits 

Please see sample below of how to figure taxable gross:

FIGURE TAXABLE GROSS

Gross Pay

• * Retirement (-)
• * OPEB (-)
• * FLEX (-) (Health/Dental/Vision, etc)
• * Savings Plus/Tax Sheltered Annuity (-)

Tax Gross  Box 1

FIGURES SS/MED TAX GROSS

Gross

• OPEB (-)
• * FLEX (-) (No Savings Plus or Tax Sheltered Annuity)

SS/Med TG  Box 3 or 5

* If FLEX is a Negative amount (1945.00-) enter the amount as a Positive in the Calculation above

Yes, all are considered wages and are included in Box 1.

The maximum wages subject to Social Security for the tax year 2025 is $176,100.00.  Box 4 (Social Security Tax Withheld) is computed based upon the 2025 rate of 6.20% of wages subject to Social Security with an annual maximum contribution of $10,918.20.

There is no maximum amount of wages subject to Medicare.  Box 6 (Medicare Tax Withheld) is computed based upon the 2024 rate of 1.45% of wages subject to Medicare.

Box 13 (not titled) is used to identify if an employee is in a pension plan.  An “X” indicates the employee is a member of either the Public Employees’, State Teachers’, Judges’ or Legislators’ Retirement System.  Employees in the Alternate Retirement Plan or Part-time/Seasonal/Temporary retirement plan will not have an “X” indicated.

Box 1 and Box 3 or Box 5 may not agree due to the following items:

• Accounts Receivable deductions
• Reaching Social Security maximum wages
• Deferred Compensation deductions
• Retirement, Part-time/Seasonal/Temporary or Alternate Retirement Plan contributions
• Flex Benefit deductions
• Tax Sheltered Annuity deductions
• Pre-Tax Benefit deductions (Health, Dental, Health Care Reimbursement, Dependent Care Reimbursement, Other Post-Employment Benefits)
• Pre-Tax Parking deductions
• Consolidated Benefits

Please see sample below of how to figure taxable gross:

FIGURE TAXABLE GROSS

Gross Pay

• * Retirement (-)
• * OPEB (-)
• * FLEX (-) (Health/Dental/Vision, etc)
• * Savings Plus/Tax Sheltered Annuity (-)

Tax Gross  Box 1

FIGURES SS/MED TAX GROSS

Gross

• OPEB (-)
• * FLEX (-) (No Savings Plus or Tax Sheltered Annuity)

SS/Med TG  Box 3 or 5

* If FLEX is a Negative amount (1945.00-) enter the amount as a Positive in the Calculation above

The amount in Box 16 state wages and Box 1 federal wages are usually the same.  However, CA wages in Box 16 may differ from Box 1 federal wages for the following reasons: 

• Wages earned in another state. 
• Medical expenses.  CA allows an exclusion from gross income for certain employer-provided benefits for a taxpayer's registered domestic partner and that partner's dependents.  
• California does not conform to federal law regarding health savings accounts (HSAs). 
• CA taxpayers cannot deduct contributions to federal HSA from their California Wages.   It is not excluded as income and is added to the taxpayers CA wages. 
• Ridesharing benefits
• Sick pay under FICA
• Clergy Housing Exclusion 
• Income is exempt by U.S. treaties (applies to the employees from the country that has treaty with the US). 
• California and New York do not conform to the federal suspension of exclusion from income for qualified moving expense reimbursements under the 2017 federal tax law, HR.1, Pub. L. 115-97.  CA and New York allow exclusion from income for qualified moving expense reimbursements. 

For the tax year 2025, the maximum Dependent Care contribution is $5,000 per year per household ($2,500 for a married individual filing a separate tax return. Deduction amounts withheld are reported in Box 10 (Dependent Care Benefits). Please refer to CalHR Annual Limits on Dependent Care Deductions for more information.

Yes, the One Big Beautiful Act (OBBBA), effective January 1, 2025 introduces many changes that may affect your federal income taxes. Overtime premiums (the additional half of your overtime rate) and qualified tips may now be deductible on your federal income tax return.

There is no change to the withholding for the federal, state, Social Security, Medicare, and State Disability Insurance (SDI) income tax.

Amounts eligible for deduction will be reported in Box 14 of your Form W-2 for your convenience. For overtime, only the premium amount will be reported.

• Qualified OT
• Qualified Tips – FD BEV

For questions about how this affects your taxes, please consult your tax preparer or financial advisor.

Yes, fringe benefits are reported in Boxes 1 and 14 (Other).  This amount will also be included in Boxes 3 and 5, if applicable.

Yes, employees who have Deferred Compensation or Tax Sheltered Annuity deductions withheld will have the deduction amounts reported in Box 12 with codes “D” for 401(k), “G” for 457(b) and “E” for 403(b).

Yes, employees who have contributed to the PST retirement plan will have the contributions reported in Box 12 with code “G”.

The maximum wages subject to SDI for the tax year 2025 is eliminated. Effective January 1, 2024, Senate Bill 951 removed the taxable wage limit and maximum withholding for each employee subject to SDI contributions. Box 14 (Other) CASDI was computed at the 2025 rate of 1.2% with no annual maximum contribution amount.

Contact your Personnel/Payroll Office regarding incorrect social security number.

Any questions concerning federal or state income tax returns must be directed to the local Internal Revenue Service at (800) 829-1040 or Franchise Tax Board office at (800) 338-0505.

Website links:

• Internal Revenue Service: Contact Your Local IRS Office | Internal Revenue Service
• State of California Franchise Tax Board: Phone / fax | FTB.ca.gov

Contact your Personnel/Payroll Office with any further questions.

Form W-2's are mailed out to your home address if you opted to receive paper copies of your Form W-2. If you did not receive your Form W-2 or prefer an electronic version, you can access them on Cal Employee Connect under the W-2 tab.  You can also refer to the following page: Request a Duplicate Form W-2 for more information.

If you had multiple employers in a given year, you will only be receiving one Form W-2.

The State Controller’s Office does not provide W-2’s for IHSS employees.  Please contact the social worker or the local IHSS personnel/payroll office of the county where you work or worked to request a duplicate W-2. Go online and search for the county IHSS personnel/payroll office you service to get their phone number.

Income Based Tax Credits:  Based upon your annual earnings you may be eligible for the following assistance:

Federal Earned Income Tax Credit (Federal EITC):

The federal EITC is a refundable credit for low-income working individuals and families.  The federal EITC will not impact certain public assistance benefits, and federal EITC payments are typically NOT used to determine eligibility for benefits including Medicaid, SSI, SNAP, Low-Income Housing, and Temporary Assistance for Needy Families. To receive the federal EITC, you must file a tax return and fill out the EITC form, which can be found in the Federal Income Tax Return Booklet.  For more information, please see the back of Copy B of the Form W-2 below.

California Earned Income Tax Credit (CalEITC) and Young Child Tax Credit (YCTC): 

The California EITC and YCTC are refundable tax credits for low-income working individuals and families. The California EITC and YCTC are similar to the federal EITC and will not impact certain public assistance benefits. Even if you do not owe taxes, to claim the California EITC, you must file a California Income Tax Return and fill out the California EITC form (Form FTB 3514) and attach it to your tax return. For more information, contact the Franchise Tax Board at 1-800-852-5711 or www.ftb.ca.gov.

Foster Youth Tax Credit (FYTC):

The FYTC is a refundable credit for former and current foster youth between 18 and 25 years of age who were in foster care while 13 years of age or older. The FYTC will not impact certain public assistance benefits.

Income Based Tax Preparation Services:

You may be eligible to have both your federal and state tax returns prepared and filed for free. CalFile is a free tax preparation service provided by the California Franchise Tax Board.  For additional information on CalFile, visit www.ftb.ca.gov and enter “CalFile” in the search box. Additionally, you may also be eligible to have both your federal and state tax returns prepared and filed for free using Volunteer Income Tax Assistance (VITA) services. VITA is a free basic income tax return preparation program, for federal and state personal income tax returns, managed by the Internal Revenue Service partners and trained volunteers. For additional information on this free tax filing service, and location and hours of operation, visit https://irs.treasury.gov/freetaxprep/ or call the VITA services helpline at 1-800-906-9887.