Form W-3 Transmittal of Wage and Tax Statements (2013): A Comprehensive Guide

What the Form Is For

Think of Form W-3 as the cover letter that accompanies all the W-2 forms you send to the Social Security Administration (SSA). Just as you wouldn't mail a stack of important documents without an envelope and summary sheet, you can't submit your employees' W-2 forms without Form W-3.

Form W-3 serves as a transmittal document—essentially a summary sheet that adds up all the wages, taxes withheld, and other information from every W-2 you're filing. When the SSA receives your package, they use the W-3 to verify that all the individual W-2 forms match up correctly. It's like a reconciliation statement that tells the government: "Here are all my employee wage reports, and here's the grand total."

You must file a Form W-3 even if you only have one employee. However, there's an important exception: if you file your W-2 forms electronically through the SSA's Business Services Online (BSO) system, you don't need to submit a separate W-3—the system automatically generates it for you based on your electronic W-2 submissions.

The information on Form W-3 must match exactly what you reported on your quarterly employment tax returns (Form 941) or annual returns (Form 943, 944, or Schedule H). This cross-checking helps the IRS and SSA catch errors and ensure employers are properly reporting and paying employment taxes.

When You’d Use Form W-3 (Including Late and Amended Filings)

Standard Filing Timeline

For the 2013 tax year, you need to file Form W-3 along with Copy A of all your employees' W-2 forms according to these deadlines:

Paper filing deadline: February 28, 2014
Electronic filing deadline: March 31, 2014 (automatic 30-day extension for e-filers)
Employee copies: You must give employees their W-2 copies by January 31, 2014, regardless of which filing method you use

Late Filing

If you realize you're going to miss the deadline, you can request an automatic 30-day extension by filing Form 8809 (Application for Extension of Time to File Information Returns) before the original due date. This gives you until March 30 or April 30, depending on your filing method. However, this extension only applies to filing with the SSA—you still must provide copies to your employees by January 31.

Amended Filings

If you discover errors after filing your W-3, you'll need to file an amended return using Form W-3c (Transmittal of Corrected Wage and Tax Statements). You should file corrections as soon as you discover the error—don't wait until the next tax year. Common reasons for filing W-3c include:

Incorrect wage or tax amounts
Wrong Employer Identification Number (EIN)
Incorrect tax year
Missing or incorrect employee information on accompanying W-2c forms

When you file W-3c, you must also file Form W-2c (Corrected Wage and Tax Statement) for each affected employee, even if you're only correcting your EIN or the tax year. The correction process involves showing what was "previously reported" and what the "correct information" should be.

Key Rules for 2013

Mandatory Electronic Filing Threshold

Starting with 2013, if you're filing 250 or more W-2 forms, you must file electronically. Filing paper forms when you're required to e-file can result in penalties. If you need an exemption from this requirement, you must file Form 8508 (Request for Waiver From Filing Information Returns Electronically) at least 45 days before the W-2 due date.

Tax Rate Changes for 2013

One significant change for 2013: the social security tax withholding rate for employees returned to 6.2% (from the temporary 4.2% rate in 2011-2012). This means higher withholding amounts in boxes 4 and 6 of employees' W-2 forms and consequently higher totals on your W-3.

Additionally, 2013 introduced the Additional Medicare Tax—a 0.9% tax on wages over $200,000. Employers must withhold this tax when an employee's wages exceed the threshold, and these amounts factor into your W-3 totals.

Matching Requirements

The name and EIN you use on Form W-3 must exactly match what appears on your employment tax returns (Forms 941, 943, 944, CT-1, or Schedule H). The SSA and IRS compare these documents, and mismatches trigger inquiries that delay processing and may result in penalties.

Record Retention

You must keep a copy of your filed Form W-3 along with Copy D (For Employer) of all W-2 forms for at least four years. These records are essential if the IRS or SSA contacts you about discrepancies or if you need to reference past filings.

Physical Handling

This may seem minor, but it matters: never staple or tape your W-3 to your W-2 forms, and never staple W-2 forms together. The SSA uses machine-reading equipment, and staple holes or tears prevent accurate processing. Always send forms flat—don't fold them.

Step-by-Step (High Level)

Step 1: Gather Your Information

Before starting Form W-3, collect your completed W-2 forms for all employees and your quarterly Forms 941 (or annual Form 943, 944, or Schedule H). You'll need to add up the totals from all W-2 forms to complete the W-3.

Step 2: Complete the Identification Section

Fill in boxes b through h with your business information:

Box b: Check the type of tax return you filed (941, 943, 944, CT-1, Military, or Hshld. emp.) and employer type if applicable
Box c: Count your total W-2 forms
Box e: Enter your Employer Identification Number (EIN)
Box f: Enter your business name exactly as it appears on your employment tax returns
Box g: Enter your complete business address

Step 3: Calculate and Enter Money Amounts

In boxes 1 through 19, enter the totals from all your employees' W-2 forms. These include:

Box 1: Total wages, tips, and other compensation
Box 2: Total federal income tax withheld
Box 3: Total social security wages
Box 4: Total social security tax withheld
Box 5: Total Medicare wages and tips
Box 6: Total Medicare tax withheld
Boxes 7-14: Various other compensation and tax amounts if applicable
Boxes 15-19: State and local tax information

Step 4: Reconcile With Employment Tax Returns

Before filing, verify that your Form W-3 totals match the totals on your quarterly Forms 941 or annual returns. Boxes 1, 2, 3, 4, 5, and 6 on Form W-3 should equal the corresponding annual totals from your employment tax returns.

Step 5: Provide Contact Information

Enter your contact person's name, phone number, email, and fax number. This helps the SSA reach you if there are questions about your filing.

Step 6: Sign and Date

An authorized person (employer, officer, partner, or authorized agent) must sign the form under penalty of perjury and include their title and the date.

Step 7: File With SSA

If filing by paper, mail the entire Form W-3 page along with Copy A of all W-2 forms to:

Social Security Administration Data Operations Center Wilkes-Barre, PA 18769-0001

If e-filing, submit through the SSA's Business Services Online (BSO).

Common Mistakes and How to Avoid Them

1. Stapling or Folding Forms

The SSA's processing equipment reads forms by machine. Stapling creates holes and tears that prevent accurate scanning. Similarly, folding creates creases that interfere with machine reading. Solution: Send forms flat in an appropriate-sized envelope without any attachments.

2. Using Light Ink or Wrong-Sized Text

Forms must be printed in black ink dark enough for machine reading. Many people use printers with low toner or ink that's too light. Solution: Use only black ink and standard 12-point Courier font if printing your own forms. Test print quality before submitting.

3. Adding Dollar Signs

Boxes on Copy A of forms no longer have printed dollar signs, and you shouldn't add them. Extra symbols confuse the scanning equipment. Solution: Enter only numbers, decimal points, and cents (e.g., "50000.00" not "$50,000.00").

4. EIN and Name Mismatches

The most common substantive error is using an EIN or business name on Form W-3 that doesn't match your employment tax returns. This happens when businesses change names, use DBAs, or have multiple EINs. Solution: Always use the exact EIN and legal business name that appears on your Form 941, 943, 944, or other employment tax return.

5. Filing Paper When Required to E-File

If you have 250 or more W-2 forms, you're required to e-file. Filing on paper when you should e-file results in penalties. Solution: Count your forms early in the process and set up electronic filing well before the deadline if you're over the threshold.

6. Math Errors in Totaling

Simple addition mistakes when adding up individual W-2 totals for the W-3 cause processing delays. Solution: Use a spreadsheet or payroll software to automatically calculate totals, then double-check the math manually.

7. Missing Decimal Points

Omitting decimal points and cents (entering "50000" instead of "50000.00") is surprisingly common and causes the SSA to read amounts incorrectly. Solution: Always include the decimal point and cents, even for whole dollar amounts.

8. Filing W-3 Alone

Form W-3 is a transmittal form—it must accompany W-2 forms. Filing it alone serves no purpose and will be rejected. Solution: Always bundle Form W-3 with all corresponding Copy A forms of W-2.

What Happens After You File

Initial Processing

After the SSA receives your Form W-3 and W-2 forms, they process them to post wage and tax information to individual employees' Social Security records. This typically takes several weeks to several months. The information becomes part of each employee's lifetime earnings record used to calculate Social Security retirement and disability benefits.

Reconciliation and Matching

The SSA shares your filing information with the IRS, which then compares your Form W-3 totals against the amounts you reported on your quarterly Forms 941 or annual employment tax returns. This reconciliation process checks for:

Total wages reported matching between forms
Total federal income tax withheld matching
Total Social Security and Medicare wages and taxes matching

If Discrepancies Are Found

When the IRS or SSA identifies mismatches, they send you a letter asking you to explain the differences or provide additional documentation. Common reasons for discrepancies include:

Timing differences (wages reported in different quarters)
Adjustment forms (Form 941-X) filed after W-2/W-3 submission
Mathematical errors
Unreported employees or wages

You'll typically have 30 days to respond with either an explanation or corrected forms (W-2c and W-3c).

Penalty Assessment

If you filed late or incorrectly, the IRS may assess penalties after processing your forms. Penalty notices typically arrive 3-6 months after filing. You can appeal penalties if you have reasonable cause for late or incorrect filing.

No News Is Good News

If your filing reconciles correctly and contains no obvious errors, you likely won't hear anything from the SSA or IRS. Your filing is complete, and employees' records are updated. Keep your copy of Form W-3 and Copy D of W-2 forms in your records for at least four years in case questions arise later.

Impact on Employees

Employees use their W-2 information to file individual tax returns. If you filed W-2/W-3 correctly and on time, employees can e-file their returns smoothly. Late or incorrect W-2s delay employee refunds and create problems. The SSA uses W-2 information to credit employees' Social Security earnings records, affecting their future benefits.

FAQs

1. Do I need to file Form W-3 if I only have one employee?

Yes. Form W-3 is required whenever you file Form W-2, even for a single employee. The only exception is if you e-file through the SSA's Business Services Online—then the system generates Form W-3 automatically.

2. Can I file Form W-3 without the actual W-2 forms?

No. Form W-3 is a transmittal document, which means its only purpose is to accompany and summarize W-2 forms. Filing W-3 alone serves no purpose and will be rejected. Always submit Form W-3 together with Copy A of all corresponding W-2 forms.

3. What if I filed Form W-3 with the wrong EIN or tax year?

File a corrected Form W-3c along with Form W-2c for each affected employee. The correction process involves two sets of forms: one set to "zero out" the incorrect information (by showing the amounts previously reported under the wrong EIN/year) and a second set showing the correct EIN/year with the correct amounts. File corrections as soon as you discover the error.

4. I filed my W-2 forms electronically. Do I still need to mail Form W-3?

No. When you e-file W-2 forms through the SSA's Business Services Online (BSO), the system automatically generates Form W-3 based on your W-2 data. Do not file a paper Form W-3 if you e-filed your W-2 forms—filing both creates duplicate records and processing problems.

5. What happens if the amounts on my Form W-3 don't match my Forms 941?

The IRS and SSA will contact you requesting an explanation or correction. Common reasons for mismatches include timing differences (wages paid in one quarter but reported in another), fractions of cents that round differently, and mathematical errors. Keep detailed records showing how your W-3 totals reconcile to your Form 941 totals to respond to any inquiries.

6. Can I request an extension to file Form W-3?

Yes. You can request an automatic 30-day extension by filing Form 8809 (Application for Extension of Time to File Information Returns) before the original due date. However, this extension only applies to filing forms with the SSA—you still must provide copies to employees by January 31. The extension moves your paper filing deadline from February 28 to March 30 (or electronic filing deadline from March 31 to April 30).

7. How do I correct Form W-3 if I made a mistake after filing?

File Form W-3c (Transmittal of Corrected Wage and Tax Statements) along with Form W-2c for each affected employee. In the W-3c, show what was "previously reported" and the "correct information." File corrections as soon as you discover errors—don't wait until next year. The SSA will process the correction and update employees' records accordingly.

Sources

Sources: All information in this guide comes from official IRS publications: 2013 Form W-3 and 2013 General Instructions for Forms W-2 and W-3.