Form W-3: Transmittal of Wage and Tax Statements (2015) — A Complete Guide for Employers

What the Form Is For

Form W-3 is the summary cover sheet that employers must submit to the Social Security Administration (SSA) when filing paper copies of employee W-2 wage and tax statements. Think of it as the "transmittal letter" that accompanies all your employees' W-2 forms—it provides totals and summary information about your entire workforce's wages and withholdings for the year.

The form serves several critical purposes. First, it acts as a control document, summarizing the total number of W-2 forms you're submitting and the combined amounts reported across all categories—wages, federal income tax withheld, Social Security wages and taxes, Medicare wages and taxes, and other compensation elements. Second, it identifies what type of employer you are and which employment tax forms you've filed during the year (Form 941 quarterly returns, Form 943 for agricultural employees, or Form 944 annual returns). Third, it provides essential contact information so the SSA and IRS can reach you if questions or discrepancies arise.

Every employer required to file W-2 forms must also file a W-3, even if you only have one employee. Household employers filing a single W-2 for a nanny or housekeeper still need to complete and submit Form W-3. The only exception is for employers who file electronically—when you e-file through the SSA's Business Services Online portal, the system automatically generates your W-3 based on the W-2 data you submit, so no separate paper form is needed.

When You’d Use It (Including Late/Amended Filings)

Standard Filing Timeline

For the 2015 tax year, employers filing paper forms must submit Form W-3 along with Copy A of all employee W-2 forms by February 29, 2016. If you choose to e-file (which the SSA strongly encourages), you get an extra month—the deadline extends to March 31, 2016.

You must furnish copies of Form W-2 to your employees by February 1, 2016, regardless of whether you file paper or electronic forms with the SSA. This earlier employee deadline ensures workers have their wage information in time to prepare their personal tax returns.

Late Filing Situations

If you realize you'll miss the deadline, you can request an automatic 30-day extension by submitting Form 8809 (Application for Extension of Time to File Information Returns) before the original due date. The SSA processes these requests automatically if submitted timely. However, even with an approved extension for filing with the SSA, you still must furnish W-2s to your employees by February 1—no extension applies to that requirement.

If you terminate your business during the year, you must file Forms W-2 and W-3 by the last day of the month following the final wage payment to employees.

Amended/Corrected Filings

Discovered an error after filing? You'll need to submit corrected forms: Form W-2c (Corrected Wage and Tax Statement) for each affected employee and Form W-3c (Transmittal of Corrected Wage and Tax Statements) as the cover sheet. File these corrections as soon as possible after discovering the error—there's no specific deadline, but prompt correction minimizes penalties and ensures employees and government agencies have accurate records. Common reasons for corrections include incorrect Social Security numbers, wrong wage amounts, or improper tax withholding calculations.

Key Rules for 2015

Filing Thresholds and Requirements

The 2015 rules require electronic filing if you're submitting 250 or more W-2 forms. Filing fewer forms? You can choose paper or electronic filing, though the SSA prefers electronic submissions for their speed and accuracy. Failing to e-file when required can result in penalties.

Specific 2015 Considerations

Several important provisions affected 2015 reporting. The health flexible spending arrangement (FSA) salary reduction limit was $2,550 for the year. Employers had to report the cost of employer-sponsored health coverage in Box 12 using code DD (though transitional relief applied to certain small employers). Virtual currency payments, such as Bitcoin, were treated as wages subject to federal income tax withholding, FICA taxes, and FUTA taxes and required reporting on Form W-2.

The Additional Medicare Tax provision remained in effect, requiring employers to withhold an extra 0.9% Medicare tax on wages exceeding $200,000 paid to any employee during the calendar year. This additional withholding appears combined with regular Medicare tax on Forms W-2 and W-3.

Matching Requirements

Critical to compliance: the employer name and Employer Identification Number (EIN) on Forms W-2 and W-3 must exactly match what appears on your quarterly Form 941 returns (or annual Forms 943, 944, or CT-1, depending on your filing obligation). Mismatches trigger IRS and SSA inquiries and can delay processing.

Similarly, the totals you report on Form W-3 must equal the sum of amounts shown on all accompanying W-2 forms. The agencies reconcile these figures against your quarterly or annual employment tax returns. Any discrepancies—even small ones—can result in correspondence, audits, or penalties.

Step-by-Step Completion (High Level)

Preparation Phase

Before touching Form W-3, gather your source documents: all completed Forms W-2 for your employees, your quarterly Forms 941 (or annual Form 943, 944, or CT-1), and your payroll records for 2015. You'll need to calculate totals across all W-2 forms for wages, tips, taxes withheld, and other compensation elements.

Completing the Form

Identification Section: Enter your EIN in Box e, your complete legal business name in Box f, and your full mailing address with ZIP code in Box g. In Box b, check one "Kind of Payer" box (941 for most employers, 943 for agricultural, 944 if you filed annually, CT-1 for railroad, Military, Medicare government employee, or Hshld. emp. for household employers). If you're a particular type of tax-exempt or government employer, also check one "Kind of Employer" box.

Summary Boxes: In Box c, enter the total count of W-2 forms you're transmitting. Then fill in Boxes 1 through 8 with the sum totals from all your W-2 forms: wages, tips, and other compensation (Box 1), federal income tax withheld (Box 2), Social Security wages (Box 3), Social Security tax withheld (Box 4), Medicare wages and tips (Box 5), Medicare tax withheld (Box 6), Social Security tips (Box 7), and allocated tips if applicable (Box 8). Leave Box 9 empty. Continue with Box 10 (dependent care benefits), Box 11 (nonqualified plans), and Box 12a (deferred compensation—include only specific codes D through H, S, Y, AA, BB, and EE).

Additional Information: Box 13 is for third-party sick pay use only. Boxes 15-19 are for state and local tax information. Include contact details—name, phone, fax, and email—so agencies can reach you with questions.

Format and Presentation

Use black ink only—scanning equipment cannot read blue, red, or other colored inks. Type entries in 12-point Courier font if possible for optimal machine readability. Never staple, tape, fold, or paperclip the forms together; they must lie flat for scanning. Send the entire page of Form W-3 along with the entire Copy A page of each Form W-2 in a flat mailing to the SSA's Data Operations Center in Wilkes-Barre, PA 18769-0001.

Signature and Recordkeeping

Sign and date the form under penalty of perjury. The signature certifies that you've examined the return and accompanying documents and believe them to be true, correct, and complete. A transmitter or service bureau may sign on your behalf if properly authorized. Make a copy of the completed Form W-3 and keep it with Copy D of your Forms W-2 for at least four years.

Common Mistakes and How to Avoid Them

Physical Form Errors

One of the most frequent mistakes is using light-colored ink or printouts that are too faint for scanning equipment. Always use dark or black ink; scanners reject forms with light entries. Similarly, never photocopy Copy A forms and submit the photocopies—the SSA requires original red-ink forms or IRS-approved substitute versions that meet specific formatting standards.

Stapling, folding, or taping forms interferes with machine reading. These actions seem helpful for organization but actually damage processing efficiency. Place forms flat in an envelope or box without fasteners.

Data Entry Errors

Mismatching totals is another common problem. Some employers calculate Form W-3 totals separately rather than summing the actual W-2 forms, leading to discrepancies. Always add up the specific amounts from each W-2 to arrive at your W-3 totals—don't rely on payroll system reports that might round differently or include timing differences.

Incorrect or missing Social Security numbers on attached W-2 forms create significant problems. The SSA cannot properly credit employees' earnings records without accurate SSNs. Before filing, verify each employee's SSN using the SSA's online verification service or by reviewing original Social Security cards. Never accept an Individual Taxpayer Identification Number (ITIN) in place of an SSN—ITINs begin with "9" and are for tax purposes only, not employment reporting.

Wrong employer identification number (EIN) or using multiple EINs inconsistently across forms ranks among the most serious errors. Your EIN must match exactly between your W-2s, W-3, and quarterly/annual employment tax returns. If you've used different EINs during the year (due to a business restructure, for example), use Box h "Other EIN used this year" to explain, but ensure consistency within each batch of forms.

Filing Errors

Grouping different form types together causes processing delays. If you filed both Form 941 (quarterly) and Form 943 (agricultural) returns during the year, you must submit separate W-3 transmittals for each category of W-2 forms—one W-3 for 941 employees and another for 943 employees. Don't mix them.

Missing the e-filing requirement when you have 250 or more W-2s results in penalties. Track your employee count carefully, and if you're approaching the threshold, arrange for e-filing capability well before the deadline.

Sending payment with forms is unnecessary and creates confusion. The SSA processes wage reports; the IRS processes tax payments separately. Never include cash, checks, or money orders with Forms W-2 and W-3.

What Happens After You File

Initial Processing

The SSA receives your paper forms or electronic submission and performs automated scanning and validation. Forms undergo optical character recognition (OCR) to extract data. The system checks for obvious errors: totals that don't match, missing required fields, illegible entries, or damaged forms. Electronic submissions receive faster processing with immediate validation feedback.

Data Distribution and Reconciliation

Once accepted, the SSA posts wage information to individual employees' Social Security earnings records, which determine future retirement and disability benefits. The agency also shares data with the IRS, which uses it to verify that employees' personal tax returns match the income and withholding amounts employers reported.

The IRS conducts automated matching and reconciliation. Its systems compare your Form W-3 totals against the quarterly or annual employment tax returns you filed (Forms 941, 943, 944, or CT-1). Computers calculate whether total wages and taxes reported on your four quarterly Forms 941 (or single annual form) align with your year-end Form W-3. Significant differences trigger automated notices.

Possible Follow-Up Actions

If everything matches: You likely won't hear anything. Successful processing is typically silent—no news is good news.

If discrepancies appear: You'll receive correspondence from the IRS or SSA requesting clarification or correction. Common letters include CP2100 or CP2100A notices about SSN/name mismatches that prevent proper posting to employees' earnings records. Respond promptly with corrected information or explanations.

If you're selected for examination: The IRS may select your return for audit. Having accurate records readily available—payroll journals, canceled payroll checks, Forms 941, state unemployment reports—helps resolve questions quickly.

State and Local Reporting

Many states require you to file Copy 1 of Forms W-2 with state tax authorities along with a state-specific transmittal form (not Form W-3, which goes to the federal SSA). Check your state's requirements separately; deadlines and procedures vary. Some states participate in the Combined Federal/State Filing Program, allowing you to satisfy both federal and state obligations through a single electronic submission to the SSA.

FAQs

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

Yes. Every employer required to file Form W-2—even for a single employee—must also file Form W-3 as the transmittal document. Household employers with one nanny or housekeeper file both forms. The only exception is if you e-file, which automatically generates the transmittal electronically.

2. Can I file Form W-3 without Forms W-2, or vice versa?

No. Form W-3 and Forms W-2 work as a matched set. You cannot file W-3 by itself—it's meaningless without the underlying employee detail. Similarly, sending W-2 forms without a W-3 transmittal means the SSA has no summary information to validate and process your submission. Both must be filed together for paper returns.

3. What's the penalty if I file late?

The penalty structure for late filing has three tiers based on how late you are. If you file correctly within 30 days after the February 29 (or March 31 for e-filers) deadline, the penalty is $30 per form, with a maximum annual penalty of $250,000 ($75,000 for small businesses defined as having average annual gross receipts of $5 million or less for the three most recent tax years).

If you file more than 30 days late but by August 1, the penalty increases to $60 per form, with a maximum of $500,000 ($200,000 for small businesses).

If you file after August 1 or don't file at all, the penalty jumps to $100 per form, with a maximum of $1,500,000 ($500,000 for small businesses). These penalties apply per form, so if you have 100 employees and file 60 days late, you could face a $6,000 penalty.

4. I made a mistake on my W-3 after filing. What should I do?

File corrected forms as soon as you discover the error. Complete Form W-2c for each affected employee and Form W-3c as the transmittal. On these correction forms, show the previously reported incorrect amounts and the correct amounts. The SSA will update its records accordingly. Also provide Form W-2c copies to affected employees so they can file amended personal tax returns if necessary. Act quickly—prompt correction minimizes penalties and interest.

5. Can I file Form W-3 electronically, and should I?

Yes, and the SSA strongly recommends it. Electronic filing through the SSA's Business Services Online (BSO) platform offers significant advantages: the March 31 deadline instead of February 29, automatic generation of Form W-3 from your W-2 data (no separate transmittal needed), immediate validation of data, faster processing, confirmation of receipt, and lower error rates. BSO offers two methods: "W-2 Online" for creating up to 50 forms using fill-in screens, or "File Upload" for bulk submissions using payroll software files. E-filing is required (not optional) if you're filing 250 or more W-2 forms.

6. What if an employee's Social Security number is wrong on the W-2 and W-3?

This is a serious issue because the SSA cannot properly credit earnings to the employee's account without the correct SSN. File corrected forms immediately using Forms W-2c and W-3c showing the correct SSN. Also furnish a corrected Form W-2c to the employee. For future prevention, verify all employees' SSNs when hired using the SSA's Social Security Number Verification Service (SSNVS). Never accept an ITIN (which begins with "9") as a substitute for an SSN on employment forms.

7. My payroll service files my Forms 941. Do they also handle my W-2 and W-3 filing?

Not automatically. While many payroll service providers offer W-2/W-3 filing as a service, it's typically separate from quarterly Form 941 filing. Verify explicitly with your provider what's included in your service agreement. Importantly, even if a payroll service or reporting agent files on your behalf, you remain legally responsible for ensuring Forms W-2 and W-3 are filed correctly and on time. The IRS and SSA hold the employer ultimately accountable, regardless of who prepares the forms. Review all forms before submission and keep copies for your records.

For More Information

2015 General Instructions for Forms W-2 and W-3 (IRS.gov)
Form W-3 Transmittal 2015 (IRS.gov)