The W-3 Form: What Is It and Do I Have To File It?

During tax time, businesses need to compile their payroll data to submit to the IRS and the Social Security Administration. Filing the appropriate tax forms is one of the most important tasks an employer has in January of each year. Employees look forward to receiving their W-2 forms and preparing their taxes for the previous year in the hopes of a refund from the IRS. Businesses know they must provide staffers with their W-2 forms by the annual deadline of January 31 of each year. That enables employees to get their taxes prepared by the filing deadline of April 15. In addition to providing staff members with their W-2s, businesses must also file copies of the W-2s with the IRS and the Social Security Administration. When sending the W-2s to the Social Security Administration, employers must include a W-3 form, which provides totals of salaries paid and amounts withheld for all employees.

The W-3 form and businesses

In addition to providing each employee with a Form W-2 (or a 1099 form for independent contractors), employers must also file copies of each employee’s W-2 tax form with the Social Security Administration along with Form W-3. The W-3 form, titled the "Transmittal of Wage and Tax Statements," is a summary that employers file with the Social Security Administration. It reports the business’ combined total wages and withholding amounts for the previous year. This summary document provides an overview of the W-2 forms that are attached and sent with the form every January. The W-3 form provides a way for the Social Security Administration to verify that all wages were reported for the previous year and all the necessary Federal Insurance Contributions Act (FICA) taxes were also reported.

What’s included in the W-3 form?

The W-3 form is an overview document that contains totals of all of the W-2 data that employers submit. The form also provides the employer's name, employer identification number (EIN), legal address, contact information, and other details. The W-3 provides totals of all the business’ payroll data, which includes:

• Employee wages, tips, and other compensation
• Allocated tips
• Wages and tips subject to Social Security tax
• Wages and tips subject to Medicare tax
• Federal income tax withheld
• State income tax withheld
• Social Security tax withheld
• Total Medicare tax withheld
• Dependent care benefits
• Deferred compensation
• Nonqualified plans

Businesses need to file the W-3 form only with the SSA, along with the corresponding W-2 forms. No payment is sent when filing the W-3.

When to file Form W-3

Business owners or tax preparers must attach Copy A of each employee’s W-2 to the W-3 form and send it to the Social Security Administration no later than January 31 for the prior year’s reporting. Those who miss the January 31 deadline can still file, but may be subject to penalties. The W-2s and the W-3 forms submitted in January contain data for employee earnings and withholdings for the full prior tax year. Whether you file electronically or by mail, the January 31 deadline is the same. This aligns with the deadline to provide employees with a copy of their individual W-2 on January 31 of every year for the previous tax year. Employers should have W-2 forms prepared and sent to employees by the deadline and also send Copy A of each W-2, along with the W-3 summary document, on or before the 31st of January. Employers may file W-2 and W-3 forms electronically through the Social Security Administration's website. Businesses that want to file manually can order copies of the forms on the Internal Revenue Service website. If you file by mail, submissions must be postmarked no later than the 31st of January. For businesses filing 250 or more W-2 forms, the IRS requires the forms be submitted electronically unless it has granted the employer a written waiver. The IRS prefers that employers file electronically. It has a variety of resources available to help businesses file online quickly and easily.

Help with W-3 forms

For small business owners who manage their own tax responsibilities, the form may seem challenging, but it’s simply a matter of adding up all the corresponding data that you’ll find on employees' W-2 forms. The W-3 form mirrors the W-2 form, with sections 1 through 11 duplicating the necessary data, such as wages, tips, other compensation, federal income tax withheld, etc. For companies that need more assistance, the SSA has a checklist that can help business owners complete and file their W-2 and W-3 forms. An IRS video can even walk you through the steps of reconciling your W-2 forms and the W-3 summary document. Filing tax statements and forms every January is a beginning-of-the-year task that every business with employees must complete. It may seem like an intimidating process, but with a bit of guidance and the right tools, it can be easily and quickly accomplished. TriNet, with its sophisticated payroll software, up-to-date tax software, and staff of HR experts can perform these tasks and much more.