General Instructions for Forms W-2 and W-3 - Introductory Material


What's New

Forms W-3, W-3SS, and W-3c.   The title of the Contact name, Telephone number, Email address, and Fax number boxes on Forms W-3, W-3SS, and W-3c (Rev. 8-2013) has been changed to the Employer's contact person, Employer's telephone number, Employer's email address, and Employer's fax number, respectively. On Forms W-3, W-3SS, and W-3c (Rev. 8-2013), the Employer's fax number box has been replaced with the Employer's email address box to allow for a longer employer's email address.

Future developments.   Information about any future developments affecting Forms W-2 and W-3 and their instructions (such as legislation enacted after we release them) will be posted at www.irs.gov/w2.

Returned wage reports from the Social Security Administration (SSA).   Effective January 2015, the SSA will return Form W-2 electronic and paper wage reports under the following conditions:
  • Medicare wages and tips are less than the sum of social security wages and social security tips,

  • Social security tax is greater than zero; social security wages and social security tips are equal to zero, and

  • Medicare tax is greater than zero; Medicare wages and tips are equal to zero.

  Additionally, Forms W-2 and W-2c electronic and paper wage reports for household employers will be returned under the following conditions:
  • The sum of social security wages and social security tips is less than the minimum yearly earnings subject to social security and Medicare tax withholding for a household employee, and

  • The Medicare wages and tips are less than the minimum yearly earnings subject to social security and Medicare tax withholding for a household employee.

  If the above conditions occur in an electronic wage report, the SSA will notify the submitter by email or postal mail to correct the report and resubmit it to the SSA. If the above conditions occur in a paper wage report, the SSA will notify the employer by email or postal mail to correct the report and resubmit it to the SSA.

  Household employers, see Pub. 926, Household Employer's Tax Guide.

Third-party sick pay recap reporting.   The IRS expects to change the third-party sick pay recap reporting and filing requirements for wages paid in 2014. Information about this change will be included in the 2014 Publication 15-A, Employer's Supplemental Tax Guide (Supplement to Circular E, Employer's Tax Guide, Publication 15) and other relevant tax products.

Reminders

Get it done faster...  
E-file your Forms W-2 and W-2c with the SSA. 
See E-filing.

$2,500 limit on health flexible spending arrangement (FSA).   For plan years beginning after December 31, 2012, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,500. For more information, see Health flexible spending arrangement (FSA).

Additional Medicare Tax.   Beginning January 1, 2013, an employer is required to withhold a 0.9% Additional Medicare Tax on any Federal Insurance Contributions Act (FICA) wages or Railroad Retirement Act (RRTA) compensation it pays to an employee in excess of $200,000 in a calendar year. An employer is required to begin withholding Additional Medicare Tax in the pay period in which it pays wages or compensation in excess of $200,000 to an employee and continue to withhold it until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages and compensation that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold.

  For more information on Additional Medicare Tax, go to IRS.gov and enter “Additional Medicare Tax” in the search box.

  Unless otherwise noted, references to Medicare tax include Additional Medicare Tax.

Business Services Online (BSO).    The SSA has enhanced its secure BSO website to make it easier to register and navigate. Use BSO’s online fill-in forms to create, save, and submit Forms W-2 and W-2c to the SSA electronically. BSO lets you print copies of these forms to file with state or local governments, distribute to your employees, and keep for your records. BSO generates Form W-3 automatically based on your Forms W-2. You also can use BSO to upload wage files to the SSA, check on the status of previously submitted wage reports, and take advantage of other convenient services for employers and businesses. Visit the SSA’s Employer W-2 Filing Instructions & Information website at www.socialsecurity.gov/employer for more information about using BSO to save time for your organization. Here you also will find forms and publications used for wage reporting, information about verifying employee social security numbers online, how to reach an SSA employer services representative for your region, and more.

Preview BSO by viewing a brief online tutorial. Go to www.socialsecurity.gov/employer, select “Handbooks, Tutorials & Videos” and click on “Business Services Online Tutorial.

Correcting wage reports.   You can use BSO to create, save, print, and submit Forms W-2c, Corrected Wage and Tax Statement, online for the current year as well as for prior years. After logging in to BSO, navigate to the Electronic Wage Reporting home page and click on the “Forms W-2c/W-3c Online” tab. See E-filing and E-filing Forms W-2c and W-3c.

Distributions from governmental section 457(b) plans of state and local agencies.    Generally, report distributions from section 457(b) plans of state and local agencies on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. See Notice 2003-20 for details. You can find Notice 2003-20 on page 894 of Internal Revenue Bulletin 2003-19 at www.irs.gov/pub/irs-irbs/irb03-19.pdf.

Earned income credit (EIC) notice (not applicable to Forms W-2AS, W-2CM, W-2GU, and W-2VI).    You must notify employees who have no income tax withheld that they may be able to claim an income tax refund because of the EIC. You can do this by using the official Internal Revenue Service (IRS) Form W-2 with the EIC notice on the back of Copy B or a substitute Form W-2 with the same statement. You must give your employee Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC), or your own statement that contains the same wording if (a) you use a substitute Form W-2 that does not contain the EIC notice, (b) you are not required to furnish Form W-2, or (c) you do not furnish a timely Form W-2 to your employee. For more information, see section 10 in Pub. 15 (Circular E), Employer's Tax Guide.

Electronic statements for employees.    Furnishing Copies B, C, and 2 of Forms W-2 to your employees electronically may save you time and effort. See Pub. 15-A, Employer's Supplemental Tax Guide, for additional information.

E-filing.    The SSA encourages all employers to e-file. E-filing can save you time and effort and helps ensure accuracy. You must e-file if you are required to file 250 or more Forms W-2 or W-2c. If you are required to e-file but fail to do so, you may incur a penalty.

March 31 due date for e-filers.

The due date for e-filing 2014 Form W-2 with the SSA is March 31, 2015.

Waiver from e-filing.

You can request a waiver from this requirement by filing Form 8508, Request for Waiver From Filing Information Returns Electronically. Submit Form 8508 to the IRS at least 45 days before the due date of Form W-2, or 45 days before you file your first Form W-2c. See Form 8508 for information about filing this form.

   The SSA’s BSO website makes e-filing easy by providing two ways to submit your Forms W-2 or W-2c Copy A and Forms W-3 or W-3c information.
  • If you need to file 50 or fewer Forms W-2 or 25 or fewer Forms W-2c at a time, you can use BSO to create them online. BSO guides you through the process of creating Forms W-2 or W-2c, saving and printing them, and submitting them to the SSA when you are ready. You do not have to wait until you have submitted Forms W-2 or W-2c to the SSA before printing copies for your employees. BSO generates Form W-3 or W-3c automatically based on your Forms W-2 or W-2c.

  • If you need to file more than 50 Forms W-2 or more than 25 Forms W-2c, BSO’s “file upload” feature might be the best e-filing method for your business or organization. To obtain file format specifications, visit the SSA’s Employer W-2 Filing Instructions & Information website at www.socialsecurity.gov/employer, select “Publications & Forms” and click on “Specifications for Filing Forms W-2 and W-2c Electronically (EFW2/EFW2C)” and select the appropriate document. This information is also available by calling the SSA’s Employer Reporting Service Center at 1-800-772-6270 (toll free).

If you e-file, do not file the same returns using paper forms.

For more information about e-filing Forms W-2 or W-2c and a link to the BSO website, visit the SSA’s Employer W-2 Filing Instructions & Information website at www.socialsecurity.gov/employer.

In a few situations, reporting instructions vary depending on the filing method you choose. For example, you can include every type of box 12 amount in one employee wage record if you upload an electronic file. If you file on paper or create Forms W-2 online, you can include only four box 12 amounts per Form W-2. See the TIP for Copy A in Box 12—Codes.

Foreign agricultural workers.   You must report on Form W-2 compensation of $600 or more that you pay to H-2A visa agricultural workers. See Foreign agricultural workers.

Form 944.    Use the “944” checkbox in box b of Form W-3 or Form W-3SS if you filed Form 944, Employer's ANNUAL Federal Tax Return. Also use the “944” checkbox if you filed Formulario 944(SP), the Spanish-language version of Form 944.

Forms W-2 for U.S. possessions.    In these instructions, reference to Forms W-2 and W-3 includes Forms W-2AS, W-2CM, W-2GU, W-2VI, and W-3SS, unless otherwise noted. These instructions are not applicable to wage and tax statements for Puerto Rico. Form W-2AS is used to report American Samoa wages paid by American Samoa employers, Form W-2CM is used to report the Commonwealth of the Northern Mariana Islands (CNMI) wages paid by CNMI employers, Form W-2GU is used to report Guam wages paid by Guam employers, and Form W-2VI is used to report U.S. Virgin Islands (USVI) wages paid by USVI employers. Do not use these forms to report wages subject to U.S. income tax withholding. Instead, use Form W-2 to show U.S. income tax withheld.

Military differential pay.    Employers paying their employees while they are on active duty in the United States uniformed services should treat these payments as wages subject to income tax withholding. See Military differential pay. http://Rev. Rul.2009-11

Military Spouses Residency Relief Act (MSRRA).   You may be required to report wages and taxes on a form different from the form you generally use if an employee claims residence or domicile under MSRRA in a different jurisdiction in one of the 50 states, the District of Columbia, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or the U.S. Virgin Islands.

  Under MSRRA, the spouse of an active duty servicemember (civilian spouse) may keep his or her prior residence or domicile for tax purposes (tax residence) when accompanying the servicemember spouse, who is relocating under military orders, to a new military duty station in one of the 50 states, the District of Columbia, or a U.S. possession. Before relocating, both spouses must have had the same tax residence.

   For example, if a civilian spouse is working in Guam but properly claims tax residence in one of the 50 states under MSRRA, his or her income from services would not be taxable income for Guam tax purposes. Federal income taxes should be withheld and remitted to the IRS. State and local income taxes may need to be withheld and remitted to state and local tax authorities. You should consult with state, local, or U.S. possession tax authorities regarding your withholding obligations under MSRRA.http://P.L.111-97, sec. 3

Nonqualified deferred compensation plans.   You are not required to complete box 12 with code Y (Deferrals under a section 409A nonqualified deferred compensation plan). Section 409A provides that all amounts deferred under a nonqualified deferred compensation (NQDC) plan for all tax years are includible in gross income unless certain requirements are satisfied. See Nonqualified deferred compensation plans and the Nonqualified Deferred Compensation Plan Reporting Examples Chart.

  

Reporting aide charts.   To aide in reporting, a Form W-2 Box 13 Retirement Plan Checkbox Decision Chart and a Nonqualified Deferred Compensation Reporting Examples Chart have been added to these instructions. See pages 27 and 28.

Reporting the cost of group health insurance coverage.    You must report the cost of employer-sponsored health coverage in box 12 using code DD. However, transitional relief applies to certain employers and certain types of plans. For more information, see Box 12—Codes for Code DD—Cost of employer-sponsored health coverage.

Substitute forms.   You may use an acceptable substitute form instead of an official IRS form.

Form W-2.

If you are not using the official IRS form to furnish Form W-2 to employees or to file with the SSA, you may use an acceptable substitute form that complies with the rules in Pub. 1141, General Rules and Specifications for Substitute Forms W-2 and W-3. Pub. 1141 is a revenue procedure that explains the requirements for format and content of substitute Forms W-2 and W-3. Your substitute forms must comply with the requirements in Pub. 1141.

Form W-2c.

If you are not using the official IRS form to furnish Form W-2c to employees or to file with the SSA, you may use an acceptable substitute form that complies with the rules in Pub. 1223, General Rules and Specifications for Substitute Forms W-2c and W-3c. Pub. 1223 is a revenue procedure that explains the requirements for format and content of substitute Forms W-2c and W-3c. Your substitute forms must comply with the requirements in Pub. 1223.

Need Help?

Help with e-filing.    If you have questions about how to register or use BSO, call 1-800-772-6270 (toll free) to speak with an employer reporting specialist at the SSA. The hours of operation are Monday through Friday from 7:00 a.m. to 7:00 p.m. Eastern time. If you experience problems using any of the services within BSO, call 1-888-772-2970 (toll free). To speak with the SSA's Employer Services Liaison Officer (ESLO) for the U.S. Virgin Islands, call 1-212-264-1117 (not a toll-free number). For Guam or American Samoa, call 1-510-970-8247 (not a toll-free number). For all other employers, contact the ESLO that services your region. For a complete telephone listing, visit the SSA’s Employer W-2 Filing Instructions & Information website at www.socialsecurity.gov/employer.

Information reporting customer service site.    The IRS operates a centralized customer service site to answer questions about reporting on Forms W-2, W-3, 1099, and other information returns. If you have questions about reporting on these forms, call 1-866-455-7438 (toll free). The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 p.m. Eastern time.

TTY/TDD equipment.    Telephone help is available using TTY/TDD equipment for persons who are deaf, hard of hearing, or have a speech disability. If you have questions about reporting on information returns (Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, W-2, W-2G, and W-3), call 1-304-579-4827. For any other tax information, call 1-800-829-4059.

Employment tax information.    Detailed employment tax information is given in:
  • Pub. 15 (Circular E), Employer's Tax Guide,

  • Pub. 15-A, Employer's Supplemental Tax Guide,

  • Pub. 15-B, Employer's Tax Guide to Fringe Benefits,

  • Pub. 51 (Circular A), Agricultural Employer's Tax Guide, and

  • Pub. 80 (Circular SS), Federal Tax Guide for Employers in the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.

  You also can call the IRS with your employment tax questions at 1-800-829-4933 or visit IRS.gov and type “Employment Taxes” in the search box.

How To Get Forms and Publications

Internet.   You can access IRS.gov 24 hours a day, 7 days a week to:
  • Download, view, and order tax forms, instructions, and publications.

  • Access commercial tax preparation and e-file services.

  • Research your tax questions online.

  • See answers to frequently asked tax questions.

  • Search publications online by topic or keyword.

  • View Internal Revenue Bulletins published in the last few years.

  • Sign up to receive local and national tax news by email.

  
Do not download Copy A of Forms W-2, W-3, W-2c, or W-3c from IRS.gov and then file them with the SSA. The SSA accepts only e-filed reports and the official red-ink versions (or approved substitute versions) of these forms. For more information about acceptable substitute versions, see Substitute forms. For information about e-filing, see E-filing.

Free tax services.    To find out what services are available, get Pub. 910, IRS Guide to Free Tax Services. It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. It also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on your telephone. Accessible versions of IRS published products are available on request in a variety of alternative formats.

Mail.    You can send your order for forms, instructions, and publications to the following address. You should receive a response within 10 days after your request is received.

  

Internal Revenue Service 
1201 N. Mitsubishi Motorway 
Bloomington, IL 61705-6613

Phone.    Many services are available by phone.
  • Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. You should receive your order within 7 to 15 days.

  • TTY/TDD equipment. If you have access to TTY/TDD equipment for persons who are deaf, hard of hearing, or have a speech disability, call 1-800-829-4059 to order forms and publications.

Common Errors on Forms W-2

Forms W-2 provide information to your employees, the SSA, the IRS, and state and local governments. Avoid making the following errors, which cause processing delays. 
 
Do not:

  • Omit the decimal point and cents from entries.

  • Make entries using ink that is too light. Use only black ink.

  • Make entries that are too small or too large. Use 12-point Courier font, if possible.

  • Add dollar signs to the money-amount boxes. They have been removed from Copy A and are not required.

  • Inappropriately check the “Retirement plan” checkbox in box 13. See Retirement plan.

  • Misformat the employee's name in box e. Enter the employee's first name and middle initial in the first box, his or her surname in the second box, and his or her suffix (such as “Jr.”) in the third box (optional).


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