Paper Trails

What is Form W-3?

A requirement of all employers with at least one employee is the annual reporting of employee wages and payroll taxes on Form W-2. According to the Internal Revenue Service, any employer that submits a Form W-2 must also submit a Form W-3 as well. So, what is Form W-3?

What is Form W-3?

IRS Form W-3, or Transmittal of Wage and Tax Statements, is a form that summarizes all of the information on each employee’s Form W-2. The IRS requires this form to be submitted to the Social Security Administration (SSA) every year alongside copies of each employee’s W-2.

Form W-3 shows the IRS and SSA the following:

  • total amount of wages paid to employees
  • allocated tips
  • total federal income withheld from employees
  • Social Security taxes withheld
  • Medicare taxes withheld
  • deferred compensation
  • dependent benefits
  • number of people you employ
  • total number of Forms W-2 you are filing

How to fill out Form W-3?

All employers that file at least one W-2 must file a Form W-3. After review all of the W-2s, summarize employee wages and tax information and combined that data on the W-3.

There are three main sections to fill in. For the first section, in the top portion of the form, fill in “Kind of Payer” and “Kind of Employer” sections. Most private businesses will select “941” under “Kind of Payer” and “None apply” under “Kind of Employer”.

Form W-3 Top

Next, in boxes c-h, fill in your information about your business including tax ID number, business address, and more.

Form W3 Employer Info

Finally, in boxes 1-19, total the required information from each W-2 and fill the total into the appropriate box.

Form W-3 W2 Info

How and when to file this form

These forms must be filed by mail or electronically filed no later than January 31st each year to maintain compliance. For businesses with over 250 W-2’s, the forms must be filed electronically.

Should you need to make any corrections after filing, use the Form W-3c, Transmittal of Corrected Wage and Tax Statements, to make adjustments. A Form W-3c would need to be filed if any corrections need to be made to a W-2.