Form W-3 Transmittal of Wage and Tax Statements: Your 2014 Guide

If you're an employer who paid wages in 2014, Form W-3 is your gateway to proper tax reporting. Think of it as the cover sheet for all the individual W-2 forms you issue to employees—it summarizes everything in one place and transmits those forms to the Social Security Administration (SSA). This guide breaks down everything you need to know about Form W-3 for the 2014 tax year in plain English, using authoritative information from the IRS.

What Form W-3 Is For

Form W-3, officially titled "Transmittal of Wage and Tax Statements," serves as the summary cover page that accompanies Copy A of all your employees' W-2 forms when you file them with the Social Security Administration. Every employer who must file Forms W-2—including those with just one household employee—must also file Form W-3. You cannot file Forms W-2 without Form W-3, and you cannot file Form W-3 by itself.

The form totals all the wages, tips, federal income tax withheld, Social Security wages, Social Security tax, Medicare wages, and Medicare tax from every W-2 you're submitting. It also identifies your business, confirms how many W-2 forms you're transmitting, and indicates what type of employer you are (standard business, household employer, agricultural, etc.). The SSA uses Form W-3 to ensure your reported wage totals match up with the quarterly or annual payroll tax returns (Forms 941, 943, 944, or Schedule H) you filed with the IRS throughout the year. This reconciliation process helps both agencies verify that employees receive proper credit for Social Security and Medicare benefits and that your tax obligations are properly recorded.

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

You must file Form W-3 with the SSA by specific deadlines depending on how you file. For the 2014 tax year, paper filers must submit Form W-3 and Copy A of Forms W-2 by March 2, 2015. If you choose to file electronically (which is highly encouraged), you have until March 31, 2015—nearly a month longer. Employers required to file 250 or more Forms W-2 or W-2c must e-file and cannot use paper forms unless they obtain a waiver by submitting Form 8508 at least 45 days before the deadline.

If you miss the deadline or realize you made errors after filing, you'll need to file corrected forms. Use Form W-2c (Corrected Wage and Tax Statement) to fix mistakes on individual employee W-2s, and Form W-3c (Transmittal of Corrected Wage and Tax Statements) to transmit those corrections to the SSA. Common reasons for corrections include wrong Social Security numbers, incorrect wage amounts, or miscalculated withholding. You can file W-2c and W-3c electronically through the SSA's Business Services Online (BSO) portal or by mailing paper forms to the SSA Data Operations Center in Wilkes-Barre, Pennsylvania.

You may also request an extension if you cannot file on time. Submit Form 8809 (Application for Extension of Time to File Information Returns) before the original due date to receive an automatic 30-day extension for filing with the SSA. Note that even if you get an extension to file with the SSA, you still must furnish individual W-2 copies to your employees by February 2, 2015. A separate written request to the IRS is required if you need extra time to provide W-2s to employees, and that extension is not automatically granted.

Key Rules or Details for 2014

Several important rules governed Form W-3 filing for the 2014 tax year. First, the 250-or-more threshold required electronic filing. If your business filed 250 or more W-2 or W-2c forms, paper filing was not permitted unless you obtained an approved waiver. The SSA strongly encouraged all employers to e-file regardless of size because electronic filing reduces errors and speeds processing.

Second, 2014 marked the first full year of Additional Medicare Tax withholding. Employers were required to withhold an extra 0.9% Medicare tax on wages exceeding $200,000 paid to any individual employee during the calendar year. This Additional Medicare Tax had no employer match—it applied only to the employee. All Medicare wages subject to the standard 1.45% Medicare tax were also subject to this additional withholding once the threshold was crossed, and these amounts needed to be properly reported in boxes 5 and 6 of Form W-2 and totaled on Form W-3.

Third, employers had to reconcile Form W-3 totals with their quarterly Forms 941 or annual Forms 943, 944, or Schedule H. The amounts in box 2 (federal income tax withheld), box 3 (Social Security wages), box 5 (Medicare wages and tips), and box 7 (Social Security tips) on Form W-3 should match the yearly totals from these employment tax returns. Discrepancies trigger inquiries from the IRS and SSA, so careful reconciliation before filing is essential.

Fourth, 2014 forms reflected a $2,500 annual limit on salary reduction contributions to health flexible spending arrangements (FSAs) that began in 2013. Employers needed to properly track and report these amounts. Additionally, transitional relief continued for reporting the cost of employer-sponsored health coverage in box 12 using code DD, with certain small employers and specific plan types temporarily exempt from the requirement.

Step-by-Step (High Level)

Step 1: Maintain Accurate Payroll Records

Filing Form W-3 follows a straightforward sequence. Step 1: Throughout 2014, maintain accurate payroll records for every employee, tracking gross wages, tips, federal income tax withheld, Social Security and Medicare wages, and all tax withholdings.

Step 2: Furnish Employee Forms W-2

Step 2: By January 31, 2015 (which became February 2, 2015, since January 31 fell on a weekend), prepare individual Forms W-2 for each employee and provide them with Copies B, C, and 2. Keep Copy D for your records.

Step 3: Prepare W-3 Totals and Employer Information

Step 3: Prepare Form W-3 by totaling the amounts from all Forms W-2. Enter your business information in the employer section (name, address, Employer Identification Number), the total number of W-2s you're submitting, and the summed amounts for wages, tips, and taxes withheld. Check the appropriate boxes for your type of employer and tax forms filed (such as "941" if you filed quarterly Forms 941).

Step 4: Reconcile With Employment Tax Returns

Step 4: Reconcile your Form W-3 totals with your employment tax returns to ensure everything matches. Resolve any discrepancies before filing.

Step 5: Choose Filing Method and Submit

Step 5: Choose your filing method. If you have fewer than 250 forms and prefer paper, mail Form W-3 with Copy A of all Forms W-2 in a flat envelope (do not fold or staple) to the SSA Data Operations Center in Wilkes-Barre, PA. If you're e-filing, use the SSA's Business Services Online portal, which allows you to create forms online (for 50 or fewer W-2s at a time) or upload wage files (for larger batches). BSO automatically generates Form W-3 based on your W-2 data.

Step 6: File by the Deadline and Retain Records

Step 6: File by your deadline—March 2, 2015, for paper filers or March 31, 2015, for e-filers. Keep your copy of Form W-3 and Copy D of Forms W-2 for at least four years.

Common Mistakes and How to Avoid Them

Employers frequently make preventable errors when preparing Form W-3 and accompanying W-2 forms. One of the most common mistakes is incorrect formatting and readability issues. The SSA uses machines to scan paper forms, so any staple holes, tears, light ink, or entries that are too small or too large can cause processing failures. Always use black ink, 12-point Courier font if possible, and never add dollar signs to money-amount boxes—they've been removed from Copy A forms. Avoid omitting decimal points and cents from entries, as these cause immediate rejections.

Another frequent error is mismatched totals. The amounts in boxes 1 through 8 of Form W-3 must exactly equal the sum of the corresponding boxes from all your Forms W-2. Additionally, these totals should reconcile with your quarterly or annual employment tax returns. Employers often include prior-year adjustments on current-year forms or fail to account for corrections made during the year, creating discrepancies that trigger IRS and SSA inquiries. Always perform a line-by-line reconciliation before filing.

Social Security number errors rank among the costliest mistakes. Entering incorrect or missing Social Security numbers on W-2 forms prevents employees from receiving proper credit for their earnings. Never use Individual Taxpayer Identification Numbers (ITINs) in place of SSNs—ITINs are for people who cannot work legally in the United States and should never appear in box "a" of Form W-2. Verify every employee's SSN against their Social Security card and use the SSA's Social Security Number Verification Service if you're uncertain.

Retirement plan checkbox errors also plague many filings. Employers often check the "Retirement plan" box in box 13 of Form W-2 when it shouldn't be checked, or fail to check it when required. This box should only be checked for employees who were active participants in certain retirement plans during the year—not merely eligible participants. Understanding the specific rules for different plan types (401(k), SEP, SIMPLE, etc.) is crucial to avoid this mistake.

Finally, many employers file on paper when they should e-file. If you filed 250 or more Forms W-2 or W-2c and didn't obtain a waiver, paper filing triggers an automatic penalty. Track your form count carefully, and when in doubt, e-file—it's faster, more accurate, and gives you until March 31 instead of March 2.

What Happens After You File

Once you submit Form W-3 and Forms W-2 to the SSA, several processes begin. The SSA enters your wage data into its systems and credits each employee's earnings record for future Social Security and Medicare benefit calculations. The agency also shares your reported federal income tax withholding data with the IRS, which uses it to verify employees' individual tax returns. If you filed electronically, you'll typically receive confirmation within 24 to 48 hours. Paper filers should allow several weeks for processing.

The SSA and IRS then perform reconciliation matching. They compare the totals on your Form W-3 against the amounts you reported on your quarterly Forms 941 or annual Forms 943, 944, or Schedule H throughout 2014. If discrepancies exist—for example, if your W-3 shows $500,000 in Social Security wages but your Forms 941 total only $480,000—you'll receive a notice requesting an explanation. You'll need to either correct your W-2/W-3 filing using Forms W-2c and W-3c or amend your employment tax returns to resolve the mismatch.

You should retain your records for at least four years after the due date or the date you actually filed, whichever is later. Keep your copy of Form W-3, Copy D of all Forms W-2, reconciliation worksheets, and copies of your employment tax returns in a secure location. These records are essential if you're audited, if employees request duplicates, or if you need to file corrections later.

If you made errors, you can file corrected forms at any time using Forms W-2c and W-3c. The SSA will process corrections and update employee earnings records accordingly. However, corrections filed later in the year or in subsequent years may delay employees' receipt of accurate Social Security statements, so it's best to catch and fix errors as soon as possible.

FAQs

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

Yes. Every employer who must file Form W-2—even for a single household employee—must also file Form W-3 to transmit that form to the SSA. If you're a household employer, check the "Hshld. emp." box in box "b" of Form W-3 and follow the same filing procedures as any other employer.

2. Can I download Form W-3 from IRS.gov and print it for filing?

No, if you're filing on paper. The SSA only accepts official red-ink versions of Copy A forms or approved substitute versions that meet strict specifications outlined in IRS Publication 1141. Downloaded forms from IRS.gov are for informational purposes only and will be rejected by the SSA. You can order official forms by calling 1-800-829-3676 or file electronically, which generates properly formatted forms automatically.

3. What happens if I miss the filing deadline?

You'll face penalties that increase the longer you wait. If you file within 30 days of the due date, the penalty is $30 per Form W-2 (maximum $250,000 per year, or $75,000 for small businesses). Filing between 30 days and August 1 increases the penalty to $60 per form (maximum $500,000, or $200,000 for small businesses). Filing after August 1 or not filing at all brings a $100-per-form penalty (maximum $1.5 million, or $500,000 for small businesses). Intentional disregard carries a minimum $250-per-form penalty with no maximum cap.

4. How do I know if I must e-file?

Count the total number of Forms W-2 and W-2c you filed for the 2014 tax year. If that number is 250 or more, you must file electronically unless you obtain an approved waiver by submitting Form 8508 at least 45 days before the deadline. Even if you're below 250 forms, e-filing is encouraged because it's faster, more accurate, and gives you until March 31 instead of March 2 to file.

5. What's the difference between Form W-3 and Form W-3c?

Form W-3 is the original transmittal form you file with your initial Forms W-2 for the year. Form W-3c is used specifically to transmit corrected Forms W-2c when you need to fix errors on previously filed W-2s. Whenever you submit one or more Forms W-2c to correct mistakes, you must include a Form W-3c as the transmittal cover sheet.

6. Can I file Form W-3 before I give employees their W-2 copies?

Technically yes, but it's not recommended. You must furnish employees with Copies B, C, and 2 of Form W-2 by February 2, 2015, while you have until March 2 (paper) or March 31 (electronic) to file with the SSA. Most employers give employees their copies in January and file with the SSA in February or March. However, you cannot delay providing employees their copies just because you filed with the SSA first—the February 2 employee deadline is firm.

7. Where do I send payments for employment taxes with Form W-3?

Nowhere. Never send cash, checks, money orders, or any payment with Form W-3 to the SSA. Employment tax payments are made separately throughout the year via EFTPS (Electronic Federal Tax Payment System) or with your quarterly Forms 941 or annual Forms 943, 944, or Schedule H filed with the IRS. Form W-3 is purely an informational return summarizing wages and withholdings—no payments are attached.

Sources

Sources: All information in this guide comes from official IRS sources for the 2014 tax year, including the 2014 General Instructions for Forms W-2 and W-3 and the Form W-3 (2014), available at IRS.gov.