HR and W3 forms are old friends. For most employees, HR must file W3 tax forms after the W2 forms. The Social Security Administration (SSA) and IRS are the concerned authorities that handle these forms.
Since tax laws and tax filing requirements change every year, HR must cross-check with the IRS website that the W3 form information is being reported correctly to the authorities.
What is a W3 Tax Form?
A W3 tax form is a tax declaration form submitted to the SSA, declaring total earnings, social security wages, Medicare wages, and withholdings for all employees from the previous year.
The W3 form is called the ‘transmission of wage and tax statement.’ The W2 form report is used to prepare the W3 form. That is, all employees’ wages are added in the W2 form, preparing the base to assemble relevant data for the IRS W3 form.
What is the Need for a W3 Form in Business?
If the business is solely based in the United States, HR must have all the relevant information about the IRS W3 form. This is because the business owners are required by law to report employee payroll and income data, whether or not they are US citizens. If this sounds confusing, it’s because it is!
Let us explain how things work at your end. When a person contacts your business for employment purposes, HR has no choice but to ask them for their personal information, including their Social Security Number (SSN).
HR must collect the full name, address, and SSN of the employees they are hiring. This information is essential because they have to report the exact wages in the employees’ tax filing form.
If the employees already have one, the HRs must ask about their date of birth (DOB). The DOB matters because most SSNs are valid for 80 years, and before they expire, employees must inform authorities if they plan to continue using them.
Under federal guidelines, HR must verify the employees’ identities before hiring them. Failing to follow through with these procedures could result in legal ramifications to the business, including fines. Always remember that hired or temporary workers are subject to the same rules, that is, completion of a similar verification process.
When Should a W3 Form be Filed?
HR is obliged to file the W3 tax form with all the W2 forms of employees before the end of January, after the tax year. The deadline for W3 submission is January 31st.
We suggest that HR give the W2 forms to the employees a few weeks earlier. This will give them enough time to check their forms and correct any potential errors before submitting them to the SSA.
When an employer perceives a possible delay in submitting the W2 and W3 forms to the SSA, they can request an extension of up to 30 days to file returns using Application 8809. The IRS grants extensions only under reasonable extraordinary circumstances.
Difference Between the IRS W2 and W3 Tax Forms
The W3 and W2 forms are quite similar.
The marked difference between the IRS W3 and W2 forms is that the latter is for information regarding the salaries and total taxes per employee. On the other hand, W3 forms report employees’ total wages and taxable salaries to the SSA and IRS.
Filling Out the W2 Tax Form
The IRS W3 form contains complete information on the total taxable wages and sums up all the taxes that incur from business in a year. The primary purpose of W3 forms is to summarize all the W2 forms and act as a ‘cover sheet’ for W2 forms.
Filling Out the W3 Tax Form
Before filling the IRS W3 form, an HR professional must collect all the W2 forms first. It is also necessary to report the addition of the tax information given in the W2 form.
Both forms comprise boxes and letters and have similar instructions for completion. You can also find a sample W3 form below for more clarity.
HR will need to carefully look at the boxes from A to H in the W3 form.
- Section A is for assigning a control number
- Section B has two parts: the type of employer and payer
- The first part of Section B is for the employer, where you have to check the box and identify the kind of payer they are. You can classify the relevant section by recognizing the form name used to file the quarterly tax report of employees.
- The second part of Section B describes the type of employer they are; so, check the required section according to the business type.
- In Section C, you have to mention the number of W2 Tax forms being submitted.
- Section D asks about the Establishment Number. The box is relevant to companies that have multiple businesses under the same firm. As an HR professional, you have to state the same Establishment Number mentioned in the W2 forms.
- In Section E, fill out the EIN of the respective business.
- Section F needs the the registered name of the company.
- In Section G, enter the valid address of the business.
- Section H is for employers who have used different EINs in the same year. If there is any change in the ownership in the current year, the new and the former owners will have separate EINs.
As an HR professional, you have to enter the full income report from the data given in the W2 forms in Sections 1 to 19.
How to Make Corrections in the IRS W3 Form
If an employer makes mistakes on the W2 forms and realizes this after submitting the W3 form, HR can file the W2c and W3c tax forms with the corrections.
The IRS does not have an official deadline for this type of correction. However, HR should make the corrections as soon as possible after discovering the errors. You are also obliged to give the W2c copy to the affected employees.
How to File the IRS W3 Form
As an HR professional, you can use these three options to file IRS form W3:
- E-filing online
- Mailing the forms
- Hiring an accountant to file
The SSA encourages filing all the forms online because e-filing is more accurate, faster, and more secure. If the total number of W2 forms is greater than 250, HR professionals must file them online along with the W3 forms.
HR professionals must use the Business Services Online (BSO) portal to file the forms online.
As an HR professional, you can use either of these two options to file IRS form W3 under the BSO portal:
- You can build a fill-in form and print the copies to submit
- You can upload the wage files from the businesses tax and payroll software from which the BSO portal will automatically create a similar W3 form online.
The tax payment can be made online using the EFTPS (Electronic Federal Tax Payment System).
The benefits of filing IRS W3 and W2 tax forms online are as follows:
- Electronic tax filing saves HR professionals’ efforts and time and helps ensure correctness and accuracy.
- HRs do not have to calculate and submit an IRS W3 form; the SSA makes a W3 form automatically.
- The due date for submitting an electronic application is at the end of March, which is one month later than submitting these forms by mail.
- HRs can verify employees’ SSN for reporting the wage information at the BSO portal.
- The BSO site offers a tutorial, manuals, a checklist, and other helpful information to file those W2 forms electronically.
- If HR professionals make an error on one or more W2 forms after submission, they can submit W2c forms to correct the mistakes.
Mailing the Forms
While the SSA promotes filing all the forms online, small businesses can also mail the IRS W3 and W2 forms.
As an HR professional, you need to order the paper copies of W3 and W2 forms from the IRS before posting and making a payment. After ordering and filling out the W3 forms, you have to send the document to the address given below:
Social Security Administration
Direct Operations Center
Wilkes-Barre, PA 18769-001
HR professionals can send the W3 forms more rapidly by choosing private carriers. The current address for quick shipment is as follows:
Direct Operations Center
Social Security Administration
ATTN: W2 Process
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997
Hiring an Accountant for Filing
You can also hire an auditor to file the IRS W3 form for all the deposits and outstanding payments. The tax professional will handle all the filing and tax depositing requirements.
Is Filing a W3 Mandatory?
In this article, we have covered all the important points for HR in the US to know before filing IRS W3 forms. Here are some quick points to remember:
- The IRS W3 form contains a full report on the wages, and the total salary companies give their employees
- All the HR professionals who file one or more of the W2 tax forms must also file the IRS W3 form
- You can get copies of forms on the IRS portal and can e-file from the BSO portal of the SSA