Annual employee wage form commonly used to support mortgage income history.
A W-2 is an annual wage and tax form an employer gives to an employee showing wages paid and taxes withheld for the year.
A W-2 matters because mortgage underwriting often uses it to confirm employee income history. It helps the lender compare current income against prior-year earnings and identify whether income has been stable, rising, or declining.
It also matters because W-2 income is reviewed differently from self-employment income. A W-2 supports employee wages, while business income usually requires broader tax and business documentation.
Borrowers encounter W-2 requests during preapproval and underwriting. The lender may request one or more years of W-2 forms depending on the loan program, income type, and file complexity.
The form is commonly reviewed with paystubs, Verification of Employment, and sometimes tax transcripts when the lender needs to confirm consistency.
A borrower receives base salary plus overtime. The lender reviews the W-2 to see prior-year earnings and compares it with current paystubs before deciding how much income is stable enough to count.
A W-2 differs from a Paystub because the W-2 summarizes the prior tax year, while a paystub shows current payroll details.
It differs from a Tax Return because the W-2 is an employer-issued wage form, while a tax return is the borrower’s full filed tax document.
It also differs from Tax Transcript because a transcript is an IRS record of filed tax information, not the original employer form.