What Form W-3 (2020) Is For
IRS Form W-3 (2020) is an official transmittal document employers use to send Copy A of all Forms W-2 to the Social Security Administration. It summarizes total wages paid, taxes withheld, and employer information for a given tax year. The Social Security Administration uses it to verify that the totals on all W-2 forms align correctly and to credit employees’ earnings for Social Security and Medicare purposes.
Employers must complete and file Form W-3 when submitting paper copies of W-2 forms. Those filing electronically through the SSA’s Business Services Online system are not required to file a separate W-3, as the system automatically generates one based on uploaded wage files.
For a detailed breakdown of filing requirements, eligibility rules, and step-by-step instructions, see our comprehensive Form W-3: Transmittal of Wage and Tax Statements (2020) — A Complete Guide for Employers.
When You’d Use Form W-3
Employers use Form W-3 to transmit wage and tax statements for all employees to the Social Security Administration. It must be filed with Copy A of Forms W-2 by the due date, February 1, 2021. This applies to every employer, including household employers, agricultural employees, and tax-exempt organizations, that paid wages subject to income tax withholding, Social Security tax, or Medicare tax.
If errors are found, employers must file Form W-3c and corrected Forms W-2c to report the same information accurately. Employers who e-file through the SSA’s Business Services Online system do not need to file a paper copy since the system automatically uploads wage files and generates the transmittal of wage and tax statements.
Key Rules and Requirements for 2020
Employers filing even one Form W-2 must also file Form W-3. The employer identification number, name, and address must match those on employment tax returns filed with the Internal Revenue Service. Form W-3 summarizes wages paid, Social Security wages, Medicare taxes, and income tax withheld.
Employers submitting 250 or more W-2 forms are required to e-file, unless they are granted a waiver. Paper copies must use official red-ink forms. For 2020, employers may truncate employee Social Security numbers on employee copies but not on those sent to the Social Security Administration. The health flexible spending arrangement limit is $2,750, and dependent care benefits must be reported in Box 12.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide for Payroll & Employment Tax Forms.
Step-by-Step: How to Complete Form W-3
Step 1: Gather Required Information
Employers should collect all completed Forms W-2, business information, and tax records for the year. This includes the employer identification number, business address, state ID numbers, and details from quarterly payroll tax returns. Accuracy is essential because the totals on the W-3 must match those on the W-2 forms.
Step 2: Complete the Identification Boxes
Enter the employer identification number, legal business name, and complete address in the designated boxes. Include a contact person’s name, phone number, and email address to help the SSA reach the employer quickly if questions arise.
Step 3: Identify the Type of Payer and Employer
Employers must select the correct type of payer from the options provided, such as 941, 943, 944, CT-1, Military, or Household Employer. They must also identify the kind of employer, whether none apply, 501(c) non-governmental, state or local non-501(c), federal government, or other category. Employers who paid third-party sick pay must check the appropriate box.
Step 4: Enter Wage and Tax Totals
Employers must record the total number of W-2 forms transmitted and the combined totals for wages paid, tips subject to withholding, federal income tax withheld, Social Security wages, and Medicare wages. Employers should also include applicable state and local wage information.
Step 5: Review for Accuracy
Employers should verify that all amounts on Form W-3 equal the totals from all W-2 forms. Common errors include incorrect employer identification numbers, mismatched totals, and wrong payer type selections. Using payroll or tax software helps minimize manual calculation errors.
Step 6: Sign, Date, and Submit
Employers must sign and date the form, including their title. Paper copies should be mailed flat, without staples or folds, to the address listed in the instructions. Employers should keep a copy of the form and all W-2 records for at least four years.
Common Mistakes and How to Avoid Them
Employers frequently make errors when completing Form W-3, which can result in rejections, delays, or penalties. Careful preparation and review can help avoid these common issues.
- Mismatched totals between Form W-3 and W-2s: Always prepare Form W-3 after completing all W-2s to ensure totals match. Any corrections made to W-2s must also be reflected on the W-3.
- Selecting the wrong payer type: Ensure the correct payer type is checked to avoid mismatches with other employment tax filings.
- Submitting photocopied or black-ink forms: The SSA only accepts red-ink scannable forms or approved electronic submissions—order official forms in advance to meet filing deadlines.
- Including payments with forms: Do not send tax payments with Forms W-2 or W-3; all employment taxes must be paid separately to the IRS.
Verifying all totals, identification numbers, and filing methods before submission helps employers maintain compliance and prevent costly processing errors.
What Happens After You File
After filing Form W-3 and Forms W-2, the Social Security Administration verifies totals, employer identification numbers, and reported wages for accuracy. Once approved, the information updates employees’ Social Security and Medicare records and is shared with the Internal Revenue Service to confirm income tax reporting. Employers filing electronically receive immediate confirmation, while paper filers are notified only if errors occur.
FAQs
What information does Form W-3 include?
Form W-3 reports total employee wages, taxable wages, Social Security tax, Medicare tax, and income tax withholding. It also includes the employer identification number, employer address, and control number for the wage and tax statements transmitted.
What if an employer needs to correct errors on a tax statement?
Employers who discover errors on wage files or tax statements must file Form W-3c and corrected Forms W-2c. These related employment tax forms enable employers to correct the mistakes and upload wage files accurately to the Social Security Administration.
How are income taxes and Medicare taxes reported?
Form W-3 totals all amounts reported on Forms W-2, including income taxes withheld and Medicare taxes. Employers must ensure that Social Security or Medicare wages, along with other compensation paid, are correctly entered before filing paper copies or e-filing.
Can tax-exempt organizations or uniformed services use Form W-3?
Yes, tax-exempt organizations, uniformed services, and nonagricultural employers must file a Form W-3 if they issue any W-2 forms. The same information and due date apply regardless of the type of employer or exemption claimed.
Where can employers file Form W-3 and download official forms?
Employers can e-file Form W-3 and related forms through the SSA’s Business Services Online portal or mail paper copies to the address listed on the IRS website. They can also download prior-year forms, examples, and filing notes securely from the IRS website.
