The IRS Form W-3, Transmittal of Wage and Tax Statements, is summary form (or cover sheet) for the Forms W-2 that are filed with it. Box b – Kind of Payer gives the IRS more information regarding the employer to the IRS.
What is Form W-3?
It’s used by the Internal Revenue Service (IRS) and Social Security Administration (SSA) to give more information about the employer of a filing. 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.
Kind of Payer
IRS Form W-3 box b – Kind of Payer is a list of seven check boxes. Employers should check only one box that applies. If there are more than one type of Form W-2, then the employer should send a separate Form W-3 for the other types.
The check boxes are as follows:
- Hshld. emp.
- Medicare govt. emp
Kind of Payer: 941 (Regular)
Employers should check this box if they are required to file Form 941, Employer’s Quarterly Federal Tax Return, or Form 941-SS. Only check this box if no other category applies.
Important note: A church or church organization should check this box, even if it is not required to file Forms 941, 941-22, or 944.
Kind of Payer: Military
Military employers that are required to send Forms W-2 to members of the uniformed services should check this box.
Kind of Payer: 943 (Agricultural)
Agricultural employers should only check this box if they file Form 943, Employer’s Annual Tax Return for Agricultural Employees, and are sending Forms W-2 to agricultural employees.
Important note: For non-agricultural employees, employers should send their Forms W-2 with a separate Form W-3 and check the appropriate box.
Kind of Payer: 944 (Regular)
Employers should check this box if they are required to file Form 944, Employer’s Annual Federal Tax Return, (or Formulario 944(SP), its Spanish-language version) and no other category applies.
Kind of Payer: CT-1 (Railroad)
Railroad employers should check this box if they are required to file Forms W-2 for employees covered under the Railroad Retirement Tax Act (RRTA). The Forms W-3 should not show employee RRTA tax in boxes 3-7. These are only for social security and Medicare information.
If the employer also has employees that are subject to social security and Medicare taxes, then they should send that group’s Forms W-2 with a separate Form W-3 and check the “941” box.
Kind of Payer: Hshld. emp. (Household)
Household employers should check this box if they are required to file Form W-2 for household employees, and their taxes were not included on Forms 941, 941-SS, 943, or 944.
Kind of Payer: Medicare govt. emp.
U.S., state, or local agencies should check this box if they are filing Forms W-2 for employees that are only subject to Medicare tax.
Indicating the correct Type of Payer is critical for the IRS to know what kind of W-2 forms are to follow. It is vital that each batch only include one type of Payer for the entire report.
To help businesses determine whether a Form W-3/W-2 Filing or Form 1096/1099-NEC filing is required, we have made our interactive Employee Vs Contractor Questionnaire tool.
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.