What Is IRS Form W-3?
IRS Form W-3 Explained
IRS Form W-3 is a summary transmittal tax form that must be filed with federal agencies, along with annual wage and tax forms for employees. A separate form is used for independent contractors and other non-employees.
W-3 forms compile into one document all the information on the W-2 forms you give to your employees. You would use the 1096 form to summarize information on any 1099-MISC forms you give to non-employees.
What Is Form W-3?
Form W-3 totals the data from all the W-2 forms provided for all your employees. The IRS and the Social Security Administration use this information to track employees' pay, including salaries, wages, commissions, and tips, as well as federal withholding from their pay.
Who Uses Form W-3?
All businesses who pay employees must file Form W-3, and those who pay independent contractors must file Form 1096.
Where to Get Form W-3
Although the IRS offers many interactive forms on its website, Form W-3 isn't one of them. You can download it at IRS.gov, however, or request that the IRS mail the forms to you.
How to Fill Out Form W-3
The W-3 form mirrors the information on the W-2 form for boxes 1 through 19. Total the information from all W-2 forms and enter it into the correct, corresponding boxes. For example, total box 1 information for wages, tips, other compensation from all your employee W-2 forms, then transfer the number to box 1 of the W-3 form.
You must also include information on the type of payor and type of employer.
Form 1096 for Non-Employees
This form is what the IRS calls a "compilation report" because it totals all information from all of the 1099-MISC forms you've distributed to non-employees. Form 1096 is a bit more complicated than the W-3. Each type of Form 1099 must have its own Form 1096.
Total all the information in boxes 1 through 5 on the 1099-MISC for all non-employees. You must also check the box for the correct type of form, such as Form 1099-MISC.
Can Form W-3 Be E-Filed?
Tax law requires that employers who have 250 or more of the same report, such as Forms W-2 or 1099-MISC forms, must file their information returns online. You can do so through the SSA's Business Services Online. You must first register with the site.
You must file online if you have 100 or more of each type of report beginning in 2021, and you must file online if you have 10 or more of any one type of report beginning in 2022.
The number of forms necessary to require businesses to file online is decreasing.
Where to Mail Form W-3
Submit paper W-2 forms and W-3 forms to the Social Security Administration (SSA) at Social Security Administration, Data Operations Center, Wilkes-Barre, PA 18769-0001.
Submit the 1096 form and 1099-MISC forms to the IRS. The correct mailing address for transmitting this form to the IRS depends on your state. The IRS provides a breakdown of addresses by state on its website.
Make a copy of Form W-3 and keep it with Copy D of all the W-2 forms you send to the Social Security Administration.
How to File Form W-3
The SSA allows for both paper filing and electronic filing, but you only have to complete a W-3 transmittal form if you're filing a paper copy of the forms. Include Copy A of the W-3 with all of the W-2 forms when you file the form.
The SSA has specific requirements for these two options based on the number of W-2s your company is providing.
|Due Dates for W-2, W-3, 1099-MISC, and 1906 Forms|
|W-2||Employees||January 31 of year after tax year|
|W-3||Social Security Admin.||January 31 of year after tax year|
|1099-MISC||Non-employees||January 31 of year after tax year|
|1096||IRS||February 28 of year after tax year|
These reports are due the year after the tax year. For example, the W-3 and W-2s are due January 31, 2020, if you're reporting employee pay for 2019. You can request one 30-day extension if you require more time.
Double-check the date on the form you're using. It should be the date for the tax year you're reporting on, not the date for the year when you complete the form.
Due dates can change year by year if the due date falls on a weekend or a holiday, but only by a day or two.
Errors on W-3 and 1096 Forms
You must file Form W-2c if you make a mistake on an employee's W-2 form. You must also file a W-3c form correcting the totals if the error affects the summary W-3.
You can correct the error by filing a corrected form designated with an X in the appropriate box if you make a mistake on Form 1099 that affects Form 1096.
- IRS Form W-3 summarizes and totals all the information you reported on your employees’ W-2 Forms. It’s a “summary transmittal” form.
- Businesses that pay independent contractors should compile and report payments on Form 1099-MISC on Form 1096 instead.
- Forms W-2 and W-3 are submitted to the Social Security Administration, not the IRS.
- E-filing of these forms is required if you have 100 or more Forms W-2 beginning in 2021, and this number will drop to 10 in 2022.
NOTE: Tax laws change periodically. Consult with a tax professional for the most up-to-date advice. The information contained in this article is not intended as tax advice and it is not a substitute for tax advice.