What Is a W3 Form and How to File It: An Employer’s Guide

What is a W3 Form?

Almost everyone has heard of the W2 forms submitted at tax-time, but what is a W3?

The W3 form, also known as the Transmittal of Wage and Tax Statements, is a summary form that employers file with the Social Security Administration (SSA).

Think of the W3 as a version of a business’s W2. It consolidates all W2 forms issued to employees that year and reports the total wages, taxable wages, and taxes withheld.

The IRS requires that anyone paid by an employer in a calendar year receives a W2 to notify the government about all wages (total and taxable) and any tax withholdings the employer sent on the employee’s behalf.

In addition to the W2s distributed to employees, the employer also sends a copy of each W2 form to the SSA, along with a W3 form. This form summarizes a tax year combining total wages, taxable wages, and withholding for all employees. Information on the W3 acts as a supplement to the filing of the W2 form and includes:

• Total wages, tips and other compensation, including deferred compensation
• Total wages subject to FICA taxes

Essentially, the W3 form is a cumulative summary of all individual W2 forms an employer filed that year. This form confirms information reported on the W2 and verifies all wages and FICA taxes for the tax year.

Who Needs to Complete a Form W3?

This form is not for dispersal to employees. This employer-only form is used to relay a company’s total pay and tax withholding information to the IRS and SSA.

Who Does the W3 Need Submitted To?

Employers must submit W3 forms to the SSA along with all W2 forms created for employees. The SSA then shares information from this filing with the IRS.

The W3 exists in two different versions — the W3 and W3(C):

• W3 is the standard version of the form, submitted to the government as part of the employer’s tax filing process.
• W3(C) is only used to correct any errors found in any W2s or the W3 that the employer originally filed.

When Is the Form W3 Submission Deadline?

W3 forms have a deadline of the last day in January of any new tax year.

Like with any tax document filing, late submissions do have implications and exceptions, notably:

• You may owe a penalty for filing late — either electronically or manually using paper forms. This fee increases exponentially depending on how far past the deadline you file your forms.
• If needed, you may request to file a one-time-only extension. To apply, submit an application Form 8809 to the SSA showing “reasonable cause” like natural disaster or serious illness.

For more information on specific penalties and filing instructions, see the IRS General Instructions overview for Forms W2 and W3.

By using a third-party payroll company such as Green Payroll to file these forms on their behalf, employers can rest assured about all timing, penalties and deadlines.

However, it is particularly important to note that the responsibility for ensuring correct information and filing remains with the employer. Per the IRS submission instructions overview, “Use of a reporting agent or other third-party payroll service provider does not relieve an employer of the responsibility to ensure that Forms W-2 are furnished to employees and that Forms W-2 and W-3 are filed with the SSA, correctly and on time.”

Entrusting the on-time and accurate filing of these forms to a proper payroll service provider like Green Payroll can help employers limit their liability and ensure correct submission every time.

How to Submit a Form W3

Electronic W3 Submissions

Employers can submit this form online with the SSA’s Business Services Online (BSO) website.

Electronic submissions of both Form W2 and W3 are the preferred method of transmission. E-filing is also the REQUIRED method for any employer submitting more than 10 forms.

Traditional By-Mail Submissions

Employers who would like to mail in the Form W3, must first request this from the IRS. Keep in mind that you’ll need to allow for mail time via standard, certified or IRS-approved delivery service. Plan your filing time accordingly!

Payroll Service Submissions

The most common method of W3 submission is to work with a payroll service provider. This filing service is a pillar of any legitimate payroll company. By using a third party that specializes in payroll form submissions, employers can automate this process and limit their exposure.

Working with the SSA, IRS and payroll software to make sure the connections are valid is an ongoing and time-consuming process. By vetting this important topic with any potential payroll service company, an employer takes the lead knowing that this process is as airtight as possible.

Bonus W3 Submission Tip!

Green Payroll recommends that all employers set up to file electronically on their own, along with their respective payroll service. This is a great backup plan to prepare for any unexpected errors and can help to alleviate any potential late files and penalties.

Conclusion

The W3 form is essentially a roll-up of all W2 forms an employers submits at tax-time. This employer-only form is a critical part of the federal government’s review of employees’ wages paid and any tax dollars already withheld. While you can submit W3 forms through traditional mail in some cases, the SSA prefers e-filing (and in most instances mandates it). For maximum peace of mind and to ensure compliance, an employer’s optimal choice would be to outsource this critical process to the company’s payroll provider.

To learn more about how Green Payroll can help support your business through facilitating submission of all your company’s tax forms, contact us today!