W-3 Form
What is a W-3 tax form?
The W-3 form is an Internal Revenue Service (IRS) document employers use to summarize the total earnings and withholdings reported on Form W-2. When multiple W-2 forms are issued, Form W-3 is a combined report that is sent to the IRS and Social Security Administration (SSA), including total wages and taxes withheld for all their W-2 employees.
Employers who send out a single Form W-2 don't need a separate form to tally the total amounts, as they’re displayed on their single employee’s Form W-2.
Who needs to file W-3 Form?
Every employer required to file a Form W-2 must file Form W-3. This includes most employers in the US, as Form W-2 is required after paying an employee more than $600 in wages in a given year, whether or not the employer withholds income or taxes from an employee’s wages.
What is the difference between W-2 and W-3?
A W-2 form is used to report an employee’s wage and tax information for the year. Employers provide a W-2 form to each employee and submit copies to the IRS and Social Security Administration.
A W-3 form is used to report the total wages and tax information for the employer. It combines total earnings, Medicare wages, state wages, Social Security wages, and withholding information for all employees.
Think of it this way: the W-2 form is for each employee, and the W-3 form helps summarizes W-2s for whole company. If an employer only files one W-2, a W-3 isn’t needed.
Why does the IRS require employers to file Form W-3?
Form W-3 provides a benchmark for the IRS to compare figures from individual employees’ W-2 forms with the official totals reported by their employer.
What information needs to be included in W-3 Form?
When filling out a W-3 Form, you must include the following:
- Your business details, including employer identification number (EIN), legal address, and other contact information
- Total wages (salary, tips, commission, and other compensation) paid to employees over the tax year
- Total taxable wages for Social Security and Medicare
- Total federal and state income tax withheld
- Total Social Security tax withheld
- Total Medicare tax withheld
When do employers submit Form W-3?
Employers are required to submit Form W-3 by January 31 each year—a shared deadline with mailing employees their copies of their Form W-2.
How do employers submit a W-3 form?
The preferred method of submitting a W-3 form is to submit wage files from your payroll software via the Business Services Online (or BSO) portal.
The IRS and SSA recommend that employers report Form W-3 electronically rather than on paper. The IRS and the Social Security Administration (SSA) are gradually moving away from their paper submission process, with stricter rules on who can file by mail.
The SSA offers two free e-filing options on its Business Services Online (BSO) website.
Do I have to file a W-3 form if I’m self-employed?
If you’re self-employed and have no employees, you don’t need to file a W-3 form. Self-employed individuals don't need to issue W-2 forms to themselves, so a Form W-3 isn’t required. Instead, you should report your self-employment income on a Schedule C (Form 1040) to declare your income or loss from your business activities.
The IRS states an activity qualifies as a business if:
- Your primary purpose for engaging in the activity is for income or profit
- You are involved in the activity with continuity and regularity