Instructions for Forms W-2 and W-3 (2007)

Instructions for Forms W-2 and W-3 - Notices

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Table of Contents

Specific Instructions for Form W-3
- Reconciling Forms W-2, W-3, 941, 943, 944, CT-1, and Schedule H (Form 1040)

Specific Instructions for Form W-3

How to complete Form W-3. The instructions under How to complete Form W-2 on page 9 generally apply to Form W-3. Darkly type all entries, if possible.

Amounts reported on related employment tax forms (for example, Form W-2, Form 941, Form 943, or Form 944) should agree with the amounts reported on Form W-3. If there are differences, you may be contacted by the IRS and SSA. You should retain a reconciliation for future reference. See Reconciling Forms W-2, W-3, 941, 943, 944, CT-1, and Schedule H (Form 1040) on page 15.

Box a—Control number. This is an optional box that you may use for numbering the whole transmittal.

Box b—Kind of Payer. Check the box that applies to you. Check only one box unless the second checked box is “Third-party sick pay.” If you have more than one type of Form W-2, send each type (except “Third-party sick pay”) with a separate Form W-3. (The “Third-party sick pay” indicator box does not designate a separate kind of payer.)

941. Check this box if you file Form 941, Employer's QUARTERLY Federal Tax Return, and no other category (except “Third-party sick pay”) applies. A church or church organization should check this box even if it is not required to file Form 941 or Form 944.

Military. Check this box if you are a military employer sending Forms W-2 for members of the uniformed services.

943. Check this box if you are an agricultural employer and file Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, and you are sending Forms W-2 for agricultural employees. For nonagricultural employees, send their Forms W-2 with a separate Form W-3, checking the appropriate box.

944. Check this box if you file Form 944, Employer's ANNUAL Federal Tax Return (or Forma 944(SP), its Spanish version), and no other category (except “Third-party sick pay”) applies.

CT-1. Check this box if you are a railroad employer sending Forms W-2 for employees covered under the Railroad Retirement Tax Act (RRTA). Do not show employee RRTA tax in boxes 3 through 7. These boxes are only for social security and Medicare information. If you also have employees who are subject to social security and Medicare taxes, send that group's Forms W-2 with a separate Form W-3 and check the “941” box on that
Form W-3.

Hshld. emp. Check this box if you are a household employer sending Forms W-2 for household employees and you did not include the household employee's taxes on
Form 941, Form 944, or Form 943.

Medicare govt. emp. Check this box if you are a U.S., state, or local agency filing Forms W-2 for employees subject only to the 1.45% Medicare tax. See Government employers on page 6.

Third-party sick pay. Check this box and another box such as the “941” box if you are a third-party sick pay payer (or are reporting sick pay payments made by a third party) filing Forms W-2 with the “Third-party sick pay” checkbox in box 13 checked. File a single Form W-3 for the regular and “Third-party sick pay” Forms W-2. See 941 above.

Box c—Total number of Forms W-2. Show the number of completed individual Forms W-2 that you are transmitting with this Form W-3. Do not count “Void” Forms W-2.

Box d—Establishment number. You may use this box to identify separate establishments in your business. You may file a separate Form W-3, with Forms W-2, for each establishment even if they all have the same EIN; or you may use a single Form W-3 for all Forms W-2 of the same type.

Box e—Employer identification number (EIN). If you received a preprinted Form W-3 from the IRS with Pub. 393, Federal Employment Tax Forms, or Pub. 2184, Form W-3 Package (Including Alternative Ways To Get Employment Tax Forms and Instructions), verify that your employer identification number (EIN) is correct. Make any necessary corrections on the form.

If you did not receive a form with a preprinted EIN, enter the nine-digit EIN assigned to you by the IRS. The number should be the same as shown on your Form 941, Form 943, Form 944, Form CT-1, or Schedule H (Form 1040) and in the following format: 00-0000000. Do not use a prior owner's EIN. See Box h—Other EIN used this year below.

If you do not have an EIN when filing your Form W-3, enter “Applied For” in box e, not your social security number (SSN), and see Box b—Employer identification number (EIN) on page 9.

Box f—Employer's name. If you are not using a preprinted Form W-3, enter the same name as shown on your Form 941, Form 943, Form 944, or Form CT-1. Make any necessary corrections on your preprinted Form W-3.

Box g—Employer's address and ZIP code. If you are not using a preprinted Form W-3, enter your address. Make any necessary corrections on your preprinted Form W-3.

Box h—Other EIN used this year. If you have used an EIN (including a prior owner's EIN) on Form 941, Form 943, Form 944, or Form CT-1 submitted for 2007 that is different from the EIN reported on Form W-3 in box e, enter the other EIN used. Agents generally report the employer's EIN in
box h. See Agent reporting on page 4.

Contact person, telephone number, fax number, and email address. Please enter this information for use by the SSA if any questions arise during processing.

The amounts to enter in boxes 1 through 19, described below, are totals from only the Forms W-2 that you are sending with this Form W-3.

Boxes 1 through 10. Enter the totals reported in boxes 1 through 10 on the Forms W-2.

Box 11—Nonqualified plans. Enter the total reported in box 11 on Forms W-2.

Box 12—Deferred compensation. Enter one total of all amounts reported with codes D-H, S, Y, AA, and BB in box 12 on Forms W-2. Do not enter a code.

Box 13—For third-party sick pay use only. Third-party payers of sick pay (or employers using the optional rule for Form W-2 described in section 6 of Pub. 15-A) filing third-party sick pay recap Forms W-2 and W-3 must enter “Third-Party Sick Pay Recap” in this box.

Box 14—Income tax withheld by payer of third-party sick pay. Complete this box only if you are the employer and have employees who had federal income tax withheld on third-party payments of sick pay. Show the total income tax withheld by third-party payers on payments to all of your employees. Although this tax is included in the box 2 total, it must be separately shown here.

Box 15—State/Employer's state ID number. Enter the two-letter abbreviation for the name of the state being reported on Form(s) W-2. Also enter your state-assigned ID number. If the Forms W-2 being submitted with this Form W-3 contain wage and income tax information from more than one state, enter an “X” under “State” and do not enter any state ID number.

Boxes 16-19. Enter the total of state/local wages and income tax shown in their corresponding boxes on the Forms W-2 included with this Form W-3. If the Forms W-2 show amounts from more than one state or locality, report them as one sum in the appropriate box on Form W-3. Please verify that the amount reported in each box is an accurate total of the Forms W-2.

Reconciling Forms W-2, W-3, 941, 943, 944, CT-1, and Schedule H (Form 1040)

Reconcile the amounts shown in boxes 2, 3, 5, 7, and 9 from all 2007 Forms W-3 with their respective amounts from the 2007 yearly totals from the quarterly Forms 941, or annual Form 943, Form 944, Form CT-1 (box 2 only), and Schedule H (Form 1040). When there are discrepancies between amounts reported on Forms W-2 and W-3 filed with the SSA and on Form 941, Form 943, Form 944, Form CT-1, or Schedule H (Form 1040) filed with the IRS, we must contact you to resolve the discrepancies. To help reduce discrepancies on Forms W-2:

Report bonuses as wages and as social security and Medicare wages on Forms W-2 and Form 941/943/944/Schedule H (Form 1040).
Report both social security and Medicare wages and taxes separately on Forms W-2, W-3, and 941/943/944/Schedule H (Form 1040).
Report social security taxes withheld on Form W-2 in
box 4, not in box 3.
Report Medicare taxes withheld on Form W-2 in box 6, not in box 5.
Make sure that the social security wage amount for each employee does not exceed the annual social security wage base limit ($97,500 for 2007).
Do not report noncash wages that are not subject to social security or Medicare taxes as social security or Medicare wages.
If you use an EIN on any quarterly Form 941 for the year (or annual Form 943/944/CT-1/Schedule H (Form 1040)) that is different from the EIN reported in box e on Form W-3, enter the other EIN in box h on Form W-3.

To reduce the discrepancies between amounts reported on Forms W-2, W-3, and Form 941/943/944/CT-1/Schedule H (Form 1040):

Be sure that the amounts on Form W-3 are the total amounts from Forms W-2.
Reconcile Form W-3 with your four quarterly Forms 941 (or annual Form 943/944/CT-1/Schedule H (Form 1040)) by comparing amounts reported for:

Income tax withholding (box 2).
Social security wages, Medicare wages and tips, and social security tips (boxes 3, 5, and 7). Form W-3 should include Form 941 or Form 943/Form 944/Schedule H (Form 1040) adjustments only for the current year. If the Form 941, Form 943, or Form 944 adjustments include amounts for a prior year, do not report those prior year adjustments on the current year Forms W-2 and W-3.
Social security and Medicare taxes (boxes 4 and 6). The amounts shown on the four quarterly Forms 941 (or annual Form 943/Form 944/Schedule H (Form 1040)), including current year adjustments, should be approximately twice the amounts shown on Form W-3.
Advance EIC payment (box 9).

Amounts reported on Forms W-2, W-3, and 941/943/944/CT-1/Schedule H (Form 1040) may not match for valid reasons. If they do not match, you should determine that the reasons are valid. Keep your reconciliation in case there are inquiries from the IRS or the SSA.