2 — Federal Income Tax Withheld Updated for tax year 2025

What this line means

The total amount of federal income tax your employer deducted from your paychecks throughout the year and sent to the IRS on your behalf. This is not an additional tax — it is a prepayment toward whatever you owe when you file. The amount depends on your W-4 elections, your filing status, and how much you earned.

Does this apply to you?

• You worked as a W-2 employee and had federal tax withheld from your paychecks
• You received a bonus or commission and your employer withheld federal tax (often at a flat 22% supplemental rate)
• You started a new job and filled out a W-4 that determined your withholding level
• You adjusted your W-4 mid-year to increase or decrease withholding

Easy to overlook

Supplemental wage withholding is not your actual tax rate Bonuses and commissions are often withheld at a flat 22% federal rate. If your total supplemental wages from one employer exceed $1 million during the year, the excess is withheld at 37%. This is a withholding convenience, not your real tax rate. Depending on your bracket, you will get some of that back as a refund or owe a bit more. Filers who see 22% withheld from a $10,000 bonus assume they “lost” $2,200 permanently — the actual tax depends on their total income. ¹ [SOURCE: IRS Publication 505 — Tax Withholding and Estimated Tax]

Changing jobs mid-year can cause underwithholding Each employer withholds as if that job is your only income for the year. If you earned $50,000 at Job A and $50,000 at Job B, each withheld as if you earned $50,000 total — but your actual taxable income is $100,000. The result is a tax bill at filing time. The W-4 has a “Multiple Jobs” section specifically for this situation. ² [SOURCE: IRS Form W-4 instructions — withholding allowance calculations]

Watch out for this

Assuming a large refund means your withholding is correct. A large refund means you overpaid throughout the year — the IRS held your money interest-free. A small refund or small balance due means your W-4 was accurately calibrated. Filers who view refunds as “free money” are actually giving the government an interest-free loan every paycheck.

Related lines on your return

• Box 1 — Form W-2 — The wages this withholding was calculated against
• Line 25a — Form 1040 — Where all your W-2 Box 2 amounts are reported as payments toward your tax
• Box 4 — Form W-2 — Social Security tax withheld; a separate withholding that does not appear on Line 25a