Nurse W-2 Guide: Every Box Explained (2026)

Every January, nurses open their hospital W-2 and see a Box 1 number that's several thousand dollars lower than their annual salary. First reaction: something is wrong. Second reaction: maybe payroll made an error. Third reaction, after reading this: it's correct — and the gap represents money working hard in your favor.

Hospital W-2s are genuinely confusing because nurses are often enrolled in both a 403(b) and a 457(b), participate in §125 cafeteria plans, and have employer HSA contributions — all of which reduce Box 1 before it reaches the form. This guide walks through every box that matters for RNs, NPs, and CRNAs at hospital employers.

The reconciliation: from gross pay to Box 1

Here is how a W-2 CRNA's gross salary flows to Box 1. Numbers are illustrative but realistic for a mid-career hospital CRNA using the 403(b)+457(b) dual-bucket strategy.

The $67,350 difference is not missing — it is pre-tax retirement savings, pre-tax insurance premiums, and tax-advantaged HSA contributions. It reduces your federal income tax dollar-for-dollar.

Box-by-box walkthrough

Boxes 1–2: Federal income tax

• Box 1 — Wages, tips, other compensation. Federal taxable wages after all pre-tax reductions. This is the starting number for your federal tax return.
• Box 2 — Federal income tax withheld. What your hospital withheld during the year from each paycheck. Compare this to your actual tax liability when filing. CRNAs who work overtime or receive year-end bonuses sometimes find they owe additional tax because supplemental wage payments are withheld at the flat 22% rate, which can be below their actual marginal rate.

Boxes 3–6: Social Security and Medicare wages

These boxes behave differently from Box 1 — and understanding why is one of the most useful things a nurse can learn about their W-2.

• Box 3 — Social Security wages. Capped at $184,500 for 2026.² Your 403(b) deferrals (Code E) are included here even though they reduce Box 1 — FICA applies to 403(b) elective deferrals even though income tax does not. Your §125 health premiums and HSA contributions do reduce Box 3.
• Box 4 — Social Security tax withheld. 6.2% of Box 3. Maximum is $11,439 for 2026 (6.2% × $184,500).² Any nurse earning above the wage base should see exactly $11,439 here.
• Box 5 — Medicare wages and tips. Same methodology as Box 3 but with no earnings cap. Because 403(b) deferrals are FICA-taxable, Box 5 will typically exceed Box 1 by the amount of your 403(b) deferral. In the example above, Box 5 = $197,150 while Box 1 = $172,650 — the $24,500 difference is the 403(b) that escaped income tax but not FICA.
• Box 6 — Medicare tax withheld. 1.45% of Box 5. If your wages exceed $200,000, your employer also withholds an additional 0.9% Additional Medicare Tax starting at that threshold. The $200,000 withholding trigger is per-employee regardless of filing status — so a married CRNA earning $240,000 will have the 0.9% surcharge withheld starting at $200,000 of wages, even if the household filing threshold is $250,000 MFJ. If your combined household income is under $250,000, the over-withheld surcharge is reconciled on Form 8959 when you file.

Box 12: The most important box for hospital nurses

Box 12 is where your retirement contributions are recorded. Nurses who use the full 403(b)+457(b) dual-bucket strategy will see multiple entries here. The codes most relevant to hospital nursing:

Box 13: The retirement plan checkbox

"Retirement plan" will almost always be checked for hospital nurses enrolled in the 403(b). This matters for one specific reason: traditional IRA deductibility. If Box 13 is checked, your ability to deduct a traditional IRA contribution phases out at lower income levels. The 2026 phase-out for someone with workplace retirement plan coverage: $79,000–$89,000 for single filers; $126,000–$146,000 for MFJ where the contributing spouse has workplace coverage.¹

Most NPs and CRNAs are above these thresholds, meaning a traditional IRA contribution is nondeductible — which is precisely what makes the backdoor Roth conversion worthwhile. See the nurse Roth IRA guide for the full mechanics.

Box 14: Other

Employers use Box 14 for items that don't have a dedicated box. Common entries for hospital nurses:

• Union dues: Hospitals with NNU, SEIU, or state nursing union affiliates often report withheld dues here. Verify the amount matches what you actually paid — useful if your state still allows an employee expense deduction at the state level.
• State disability insurance (SDI): Required in California, New Jersey, New York, Hawaii, and a few other states. Withheld from your paycheck and reported here. Deductible as a state tax on Schedule A if you itemize.
• Defined benefit pension contributions: Nurses at public hospital systems or state university hospitals who contribute to a defined benefit pension may see their employee contribution labeled here (often as "Pension" or the plan acronym). This is distinct from your 403(b) contributions in Box 12.
• Employer student loan repayment: If your hospital provides student loan repayment assistance under §127, amounts up to $5,250/year are excluded from income. Some hospitals report the excluded portion in Box 14 for transparency, even though it does not add to Box 1.

Boxes 15–17: State wages and withholding

Box 15 should show your work state's two-letter abbreviation. Box 16 shows state taxable wages (may differ from Box 1 if your state has different pre-tax rules). Box 17 is state income tax withheld.

For nurses working in a single state, this is usually straightforward. The most common error is a mismatch between the state in Box 15 and where you actually worked — particularly relevant for nurses who moved mid-year or who work at a hospital system that spans a state line.

What does NOT appear on your W-2

Employer 403(b) matching contributions do not appear on your W-2 — they go directly from the hospital into your plan account and are not wages. Your year-end plan statement is the place to verify total contributions (employee + employer) stay within the §415(c) annual additions limit of $72,000 for 2026.³

1099 nurses have no W-2 at all. If you work as a 1099 independent contractor — locum CRNA, 1099 NP, or agency staffing arranged as contractor — you will receive a Form 1099-NEC instead of a W-2. Your income planning looks very different: no pre-tax withholding, quarterly estimated taxes, self-employment tax on the full net, and Solo 401(k) rather than a hospital 403(b). See the 1099 CRNA calculator and nurse tax deductions guide for the mechanics.

Travel nurse W-2 situations

Travel nurses frequently have multiple W-2s in the same year — one per staffing agency if they changed agencies, or one per year if they stayed with one agency. Key points:

• Housing and meal stipends are NOT on your W-2 if they qualify under IRS rules (duplicate living expenses away from a tax home). If the agency is paying qualified stipends correctly, you will not see them in Box 1. If they appear in Box 1, the agency has improperly taxed them, or the payments exceeded the IRS rate, or your tax home qualification failed.
• Multiple W-2s from multiple agencies: Check Box 4 (Social Security tax withheld) across all W-2s. If the combined Box 3 amounts across all employers exceeded $184,500, you may have overpaid Social Security tax — excess withholding from multiple employers is claimed as a credit on your return via Form 1040 Schedule 3.
• PSLF consideration: Travel nursing agencies are typically for-profit employers. Your agency W-2 does not represent qualifying PSLF employment. See the PSLF calculator for how this affects your forgiveness timeline.

Six errors to check before filing

1. Box 12 Code E exceeds the limit. The 2026 403(b) deferral limit is $24,500 ($32,500 at ages 50–59 or 64+; $35,750 at ages 60–63 with super catch-up). If Code E shows more than your applicable limit, the excess deferral must be corrected before April 15 or it is taxed twice.
2. Code E when you expected Code D. If your hospital uses a 403(b), you should see Code E, not Code D. Code D means 401(k). Some hospitals transitioned plans — verify which plan you're actually enrolled in if you see an unexpected code.
3. Missing retirement plan check in Box 13. If Box 13 is unchecked but you contributed to the 403(b), your tax software may allow a traditional IRA deduction you're not entitled to at your income level.
4. Box 4 over the cap. Box 4 should not exceed $11,439 for 2026. If you worked at two hospital employers during the year and each withheld Social Security tax separately, you may have overpaid — claim the excess as a credit on your return, not a deduction.
5. Stipend income in Box 1 (travel nurses). If your agency correctly structured qualified stipends, they should not be in Box 1. If they appear there, investigate whether your tax home qualified before assuming the W-2 is wrong.
6. Wrong state in Box 15. If you moved mid-year or work near a state border, verify the state matches where you actually worked. Incorrect state withholding can create unnecessary non-resident filing obligations.

W-2 as a planning trigger

Your W-2 is more than a tax document — it surfaces planning gaps for the coming year:

• Code E below $24,500? You left pre-tax tax savings on the table. Increase your 403(b) deferral election. If you're age 60–63, the super catch-up brings the limit to $35,750 — a meaningful additional deferral.
• No Code G? If your hospital offers a 457(b) and you're not enrolled, you're missing the second bucket of the dual-bucket strategy — up to $24,500 in additional pre-tax deferral running independently of your 403(b).
• No Code W? If you're on a high-deductible health plan and not contributing to an HSA through payroll, you're missing FICA savings that payroll-based contributions provide. The 2026 family maximum is $8,750. See the nurse HSA strategy guide.
• Box 1 above the Roth IRA threshold? Single filers phase out of direct Roth IRA contributions between $153,000 and $168,000; MFJ phases out between $230,000 and $252,000. NPs and CRNAs above these levels should use the backdoor Roth rather than direct contributions.
• Box 6 showing Additional Medicare Tax? If your wages crossed $200,000 individually, 0.9% was withheld above that threshold. If you're MFJ with combined income near $250,000, model your actual liability vs. what was withheld — you may owe more or have been over-withheld. See CRNA tax planning for a full discussion.

1. IRS: 2026 IRA Deduction Limits — Covered by a Workplace Retirement Plan. Traditional IRA phase-out for single filers covered by a workplace plan: $79,000–$89,000. MFJ (contributing spouse covered): $126,000–$146,000. Roth IRA phase-outs: single $153,000–$168,000; MFJ $230,000–$252,000.
2. SSA: Social Security Contribution and Benefit Base. Maximum taxable earnings (Social Security wage base): $184,500 for 2026. Maximum Box 4 withholding: $11,439 (6.2% × $184,500).
3. IRS: 403(b) Plan Overview. Elective deferral limits, §415(c) annual additions limit ($72,000 for 2026), FICA treatment of 403(b) elective deferrals.
4. IRS: Instructions for Forms W-2 and W-3 (2026). Official box-by-box instructions; Box 12 code reference (Code E = 403(b), Code G = 457(b), Code BB = Roth 403(b), Code W = HSA, Code DD = employer health coverage cost); retirement plan checkbox guidance.

Values verified against 2026 IRS guidance and SSA publications (June 2026). 403(b) and 457(b) deferral limits per IRS Notice 2025-80. Social Security wage base per SSA COLA announcement. Roth IRA and traditional IRA phase-outs per IRS IR-2025-246.