Mastering Form W-3: The Essential Guide

IRS Form W-3, Transmittal of Wage and Tax Statements, serves as a summary or cover sheet for the accompanying Forms W-2. It is used annually by the IRS and the Social Security Administration (SSA) when an employer opts to paper file.

What is Form W-3?

I briefly mentioned above how IRS Form W-3, Transmittal of Wage and Tax Statements, is a transmittal form – think of it as a cover sheet that summarizes the contents of the accompanying Forms W-2.

If employers were to send their Forms W-2 to the IRS alone, then it would be difficult to determine the employer. This is where the Form W-3 comes in – it helps to identify and summarize the entire filing.

What is a W-3 Form used for?

Form W-3 is used to summarize the contents of the Form W-2 filing. It includes the following:

  • Total Wages reported
  • Total FICA (Federal Insurance Contributions Act) taxes withheld
  • Total form count of the filing

Once again, the amounts shown on a Form W-3 are the total amounts reported in all of the W-2s.

If you need assistance with Form W-2, check out our Essential Guide: Mastering Form W-2 to learn everything you need to know to get started.

What does a W-3 Form look like?

Note the red ink on the form. This special red ink is required when submitting a paper filing of a W-3. In addition, a tax year will be included at the bottom of this form. Make sure you are using the correct tax year when searching for IRS Form W-3.

IRS Form W-3
Image of Form W-3

What information is reported on Form W-3?

The information on Form W-3 is broken up into the following boxes:

  • Box a – Control number
  • Box b – Kind of payer & Kind of employer
  • Box c – Total number of Forms W-2
  • Box d – Establishment number
  • Box e – Employer identification number (EIN)
  • Box f – Employer’s name
  • Box g – Employer’s address and ZIP code
  • Box h – Other EIN used this year
  • Box 1 – Wages, tips, and other compensation
  • Box 2 – Federal income tax withheld
  • Box 3 – Social Security wages
  • Box 4 – Social security tax withheld
  • Box 5 – Medicare wages and tips
  • Box 6 – Medicare tax withheld
  • Box 7 – Social security tips
  • Box 8 – Allocated tips
  • Box 9 – Reserved
  • Box 10 – Dependent care benefits
  • Box 11 – Nonqualified plans
  • Box 12a – Deferred compensation
  • Box 12b – Reserved
  • Box 13 – For third-party sick pay use only
  • Box 14 – Income tax withheld by payer of third-party sick pay
  • Box 15 – State and Employer’s state ID number
  • Box 16 – State wages, tips, etc.
  • Box 17 – State income tax
  • Box 18 – Local wages, tips, etc.
  • Box 19 – Local income tax
  • Employer contact info
    • Contact person
    • Telephone number
    • Fax number
    • Email address
  • Signature

Where can I find the information required to fill out Form W-3?

A payroll system typically contains all of the required information required on a Form W-3, which can be researched and exported.

Completing Form W-3 with accurate information is very important, and this data should not be guessed.

For example, box c on Form W-3 reports the total amount of forms being sent in this transaction. It’s crucial for this to be correct. If not, your filing could be rejected, which leads to fines and penalties.

Does my business need to submit Form W-3 to the IRS?

If an employer paid out wages to employees, then yes, they are required to submit a Form W-3 when filing the W-2 forms. However, this would only be the case if the employer chooses to mail in these forms to the SSA. If taking advantage of e-Filing, the transmitter will take care of this requirement, as no physical copy is required.

If the business paid out amounts to independent contractors with a total of $600 or more in service, then that would require a Form 1099 and not a Form W-2.

Unsure of the difference between employees and contractors? We have a 15 questions quiz to help you determine worker classification.

Should employers send Form W-3 to the state?

Along with the federal reporting requirements, employers need to be aware of their state reporting requirements.

Almost all states have Form W-2 reporting requirements, but each state may be different. Typically, Form W-3 is not the cover sheet used for state reporting. Most states have implemented their own cover sheet that must be completed and sent with the Forms W-2, so there are a variety of different forms that may be required.

Be sure to check out our State W-2 Reporting Requirements series to ensure that you’re meeting all of your state requirements.

Can I submit a paper filing?

Employers may choose to paper file their Form W-3 filing if their total form count is less than the 250-form threshold. E-filing is encouraged by the IRS, but if you have less than 250 forms to file, then paper filing is an option!

It’s important to note that paper filing is much slower than e-Filing, so it will take longer to receive results, errors, and make corrections.

What are the paper filing form requirements?

The following is a short list of requirements for filing via mail:

  •  Handwritten forms are accepted but must be legible for machine processing
  • Data must be in the middle of blocks
  • Do not use “$” for reporting amounts
  • Do not use “0” or “None” for blank reporting
  • Do not staple or fold forms

Please note that this is just a sample. There are entire publications filled with requirements that businesses must follow when filing forms with the IRS. Consequently, paper filing can be cumbersome, so we recommend finding an e-Filing software provider.

Where can I mail IRS Forms W-3 & W-2?

Once the employer has finished completing the Form W-3 and Forms W-2, the next step is sending the filing to be validated and accepted. When mailing using the USPS, employers should send the Form W-3 and Copy A of Forms W-2 to the following address:

Social Security Administration
Direct Operations Center
Wilkes-Barre, PA 18769-0001

Please note that postal regulations require that packages with forms must be sent via first-class mail.

If using a private delivery service (FedEx, UPS, etc.), the delivery address is different. If this is the case, employers should send the Form W-3 and Copy A of Forms W-2 to the following address:

Social Security Administration
Direct Operations Center
Attn: W-2 Process
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997

Which W-2 Copy do I include with Form W-3?

While all W-2 copies contain the same information, it can be hard to understand which one to include in the submission to the IRS.

Form W-2 has more copies than most other form types – a total of 6 different copies, in fact. Each copy serves its own unique purpose. Employers should use Copy A when submitting a paper filing to the SSA. For a quick overview of each copy’s purpose, check out File & Distribute Forms W-2.

Can I print a Form W-3 on any printer?

Unfortunately, you cannot. As mentioned above, the IRS requires a certain type of red ink to be considered valid and scannable. It is safer to find an official retailer of Form W-3 to ensure no penalties are issued due to invalid paper containing the correct data. If an employer decides to file paper forms, we recommend ordering them directly from the IRS for peace of mind.

Is there a cutoff for sending Forms W-3 & W-2 via mail?

If the business needs to file more than 250 forms, then you cannot send in paper copies, and e-Filing is required. However, there may be exceptions to this rule – in which case the business must be granted a waiver directly from the IRS to be permitted to send copies by mail.

It’s important to note that electronic filing is encouraged by the IRS. There is no minimum or maximum amount of forms for employers to file electronically.

How is the mailable 250-form threshold calculated?

The 250-form threshold applies to each form type separately. For example, a business filing 200 Forms 1099-MISC and 200 Forms W-2 will still fall under the 250-form threshold because each type is counted independently. However, if one type of form is above the 250-form threshold, then that type must be filed electronically.

It’s worth noting that no form type shares the same cumulative form counts – even original forms and corrections are counted separately. For example, a business that reported 500 Forms 1099-MISC is required to e-File because the form count is over 250. The IRS may return 50 forms that need a correction. In this case, the business may choose to file these 50 corrections via mail, because these 50 forms now fall under the 250-form threshold.

Although, it’s important to note that the IRS generally recommends filing the corrections using the same medium as the original forms. If you e-filed the original forms, then you should e-file the corrections and vice versa if the original forms were paper filed.

Due to the extensive requirements that must be followed for the filing to be accepted, we do not recommend sending forms by mail.

IRS Mail in Threshold
How to calculate IRS mail in threshold

What if I do not want to mail my Forms W-3 & W-2 filing in?

If you’d prefer not to mail your filing, then you can electronically file your information returns.

E-filing is encouraged by the IRS and offers many benefits. These benefits include immediate submission, quick turnaround time, real-time status updates, and more.

Employers filing more than 250 forms are required to file electronically, unless granted a waiver from the IRS. When opting to e-file, be sure to use an IRS authorized transmitter to make e-filing quick and easy.

Can I submit an electronic filing?

Yes, of course! E-filing is encouraged by the IRS and offers many benefits. These benefits include immediate submission, quick turnaround time, status updates, and more.

Employers filing more than 250 forms are required to file electronically, unless granted a waiver from the IRS. When opting to e-file, be sure to use an IRS authorized transmitter to make e-filing quick and easy.  

Is Form W-3 included when filing electronically?

No, it is not. One of the advantages of e-filing is the ability to generate Form W-3 for a business without using an actual form. E-filing will also save filers time, because they won’t have to manually complete Form W-3.

When is the deadline for Form W-3?

Since Form W-3 is required when submitting W-2(s), these forms share the same deadline date.

Employers are required to file and furnish Form W-2 by January 31st.

Since an employer needs to postmark their Forms W-2 by January 31st, employees can expect to receive their forms anywhere from January 1st to about 5 business days after the deadline.

If the deadline falls on a weekend or holiday, then it’s typically postponed to the following business day. Employers should always verify the deadline dates at the beginning of the tax year.

Is there an extension for IRS Form W-3?

Yes, there is. Employers may request a one-time 30-day extension on their Form W-2 filing. Although, there are several caveats for requesting a Form W-2 extension compared to requesting it for other IRS forms.

An employer can apply for an extension for other form types electronically, which is typically granted automatically and immediately. If an employer would like to request an extension for their Form W-2 filing, they must request it via mail using IRS Form 8809. Line 7 must be filled out completely when requesting an extension.

Since an extension cannot be requested electronically, it will not be automatic nor immediate.

Businesses should mail their completed Form 8809 to the following address:

Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0209

If given an extension, this does not affect the deadline employers have to furnish employee recipient copies.

How do I request an extension of time for furnishing recipient copies?

In order to qualify for this specific extension request, the business must fax a letter to:

Internal Revenue Service Technical Services Operation
Attn: Extension of Time Coordinator
Fax: 877-477-0572 (International Fax: 304-579-4105)

The letter must include the following criteria:

  • Your name and business address
  • Employer Identification Number
  • A statement that this fax is officially requesting an extension to Furnish Recipient W-2
  • A reason for the delay
  • The signature of an authorized agent

This extension is not the same as IRS Form 8809, Application for Extension of Time to File Information Returns.

Is there a penalty for not filing Form W-3?

Yes, the business can be fined for a failure to submit to the SSA.

The IRS will issue a fine to the employer for a failure to file or for filing late. The fine amount will grow if you decide to put this on the back burner for a while.

While the penalty amount for filings submitted before August 1st has not increased in many years, the IRS has continued to increase the penalty amount on filings filed after August 1st.

At a glance, the amount may seem extremely low, but it is the amount per employee. The fine has climbed to over $1,000 for a filing with only employees. For larger businesses, this fine can quickly multiply into the thousands. The graphic below shows how quickly the fine can grow based on only 10 forms.

IRS Failure to File Graph
IRS Failure to File Fine Amount

Rejections, Errors, and Corrections

It’s important that you take the time to review the information you’re reporting on your Forms W-2 for accuracy prior to distributing and filing. This will minimize the risk of common errors which in turn helps minimize the risk of your business incurring penalties and fines.

Even with careful reviewing, mistakes can happen! If your filing has errors or is rejected, then you can make corrections and resubmit.

Why was my filing rejected?

The SSA will reject Form W-2 filings for the following:

Additionally, the SSA will reject Form W-2 and W-2c filings for household employers for the following:

If the above scenarios occur, the SSA will notify the employer via email or postal mail that action is required to correct the forms and resubmit. Do not mark the submission as “corrected” or “amended.”

Form W-2 and W-3 Errors

Employers should file Forms W-2c and W-3c as soon as possible after an error is discovered. Generally, employers will have 30 days to complete the corrections. If they are not completed within that time frame, then they may incur fines or penalties.

What is IRS Form W-3c?

Form W-3c, Transmittal of Corrected Wage and Tax Statement, is used to submit corrections to the IRS.  It has two sets of boxes; one set for ‘previously reported’ amounts and the other for ‘correct information’ amounts.

When submitting Form W-3 corrections using Form W-3c, the following must always be included:

  • Employer’s name, address, and ZIP code
  • Employer’s Federal EIN
  • Tax year
  • Updated information

The SSA has provided some helpful tips on when to use the corrected form types, W-3c and W-2c – we’ll provide some highlights below.

Use a Forms W-3c and W-2c:

  • To correct a W-2 that has already been submitted to the IRS
  • To correct an employee’s name or Social Security number (SSN)
  • To correct an employer identification number (EIN)

Form W-3 is always sent with a paper filing of Forms W-2. The same logic applies to the corrected forms – Form W-3c is always sent with Forms W-2c. You should never submit a Form W-3 with Forms W-2c or vice versa.

If you’re looking for a guide to Form W-2c with scenarios and specific correction instructions, we recommend checking out our article, Form W-2C: How & When to Use.

Frequently Asked Questions

Where can I get W-3 Forms?

You cannot print a Form W-3 from the IRS website to file with the SSA. If you plan on paper filing, then you must use official IRS forms that are printed with special red ink. In order to satisfy IRS form requirements, we recommend ordering forms directly form the IRS.

W-3 vs W-4: What’s the difference?

A Form W-3 is used as a summary of the information being filed in a Form W-2 filing.

Form W-4, Employees Withholding Certificate, is a form completed by newly hired employees. Form W-4 includes basic employee information including full name, address, and any tax exemptions. it provides the employer with the information to withhold the correct amount of federal income tax.

If a Form W-4 is not returned to the employer before the first pay cycle, the employer will typically auto-fill this information as “single” with zero children or dependents.

These forms are also processed much differently. Form W-4 is given back to the employer to keep for their records, while IRS Form W-3 is a transmittal included with the Form W-2 filing sent to the SSA.

IRS W-4 Flowchart
Flow of W-4 Employee to Employer

W-3 vs W-9: What’s the difference?

Again, Form W-3 is simply a summary of the information being filed in a Form W-2 filing.

Independent contractors complete Form W-9 before providing a service. It provides the hiring company with basic information necessary for year-end reporting.

Helpful things to remember about IRS Form W-3

I’m going to keep this list of tips short and simple:

  • Photocopies are not acceptable when sending mailable forms
  • Do not send a W-3 when filing electronically
  • Do not send any form of payment (cash, check, etc.) with forms
  • All paper forms must be machine readable
  • The IRS recommends keeping copies for 4 years

Conclusion

This form has been around for a long time, and it will likely be around for years to come. Of course, filing this form can be avoided if businesses opt to electronically file rather than paper file.

If you’d like to become an expert in Form W-2 filing, then take a look at our breakdown of our Mastering Form W-2: Essential Guide below.

BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.

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