When you hire your first employees, you take on a lot of new responsibilities. You have to set up payroll, calculate payroll taxes, and report this information to the IRS.
You may be familiar with Form W-2 and Form 1099-NEC that you provide to employees and independent contractors. But did you know if you submit any W-2 forms, you also have to submit a W-3?
Keep reading to learn about IRS Form W-3, who has to file a W-3, and how to file it.
What Exactly Is a W-3?
IRS Form W-3 is a tax declaration that employers submit to the Social Security Administration (SSA). It includes the totals of all your employees’ W-2 forms.
Also known as the Transmittal of Wage and Tax Statement, Form W-3 serves as a cover sheet for your W-2s. It verifies your total W-2 information and gives a formal summary of your quarterly employment tax (also known as FICA tax) payments.

W-3 vs. W-2 Form
Both the W-3 and W-2 forms contain information about the total wages you pay employees and the tax withheld from payroll during the year. However, there are some key differences to note between the two forms.
A W-2 form contains wage and tax information for a single employee. So every year, you have to file one W-2 for each employee you have. On the other hand, the W-3 form summarizes all the wages paid and taxes withheld during the year, which means you only file one copy of your W-3.
What’s more, when you file Form W-2, you have to distribute a copy to the Social Security Administration (SSA) and your employee and keep one for your records. With the W-3, there’s one copy submitted to the SSA and one copy for your records.
Do I Need to File a W-3?
Figuring out whether or not you have to file a W-3 is simple. If you file one or more W-2 forms for a given tax year, you must also file a W-3. This includes business owners who pay themselves wages. In other words, if you filed a W-2 for yourself, you still need to file a W-3. On the other hand, if you don’t have a payroll, you don’t need to file a W-3.
Employers that only hire independent contractors during the year distribute 1099-NEC forms instead of W-2s. If you only hired 1099 employees, you have no W-2 information to summarize; therefore, you do not need to file a W-3.
W-3 Form Deadline
W-3 has the same deadline as IRS Form W-2. You have to submit your W-3 form to the SSA by January 31st of the following year. If January 31st falls on a weekend, the deadline becomes the next business day.
Information Needed for W-3 Form
To fill out your W-3 form, you’ll need information on your business, wages paid, and tax withholdings.
Specifically, you should have:
- Business name and mailing address
- EIN (Federal employer identification number)
- Payroll records
- W-2 forms
Filling Out Your W-3 Form
You can find Form W-3 and its instructions on the IRS website. The first section of the form is where you enter information about your business and the types of W-2s you’re sending. The second section has boxes for you to add up the federal and local wage and tax information for all your W-2s. And finally, you’ll enter your contact information at the bottom.
Boxes A-H Employer Contact Information
Box A — Control Number
This is an optional box you can fill in with a number you generate yourself to keep track of your W-3 for internal records.
Box B — Kind of Payer/Kind of Employer
In Box B, you indicate what kind of payer and type of employer you are. You should only check one box in each section.
Kind of payer tells the IRS what type of W-2 forms you’re sending. Most private employers will select 941 (which means you also submit IRS Form 941 Employer’s Quarterly Federal Tax return), but you should check with your accounting or legal team to make sure you check the right box.
The type of employer section is also where you can say if you are a local or federal government employer with tax-exempt status.
Box C — Total Number of Forms W-2
Indicate the total number of W-2 forms you’re sending along with your W-3.
Box D — Establishment Number
If you run multiple businesses in the same location, you can use Box D to indicate that. For example, if you run a bakery that’s also a coffee shop, you can file separate W-3 forms for each business, or you can file their taxes together on one form.
Box E — Employer’s Identification Number (EIN)
Enter your 9-digit EIN. If you’ve applied for an EIN and don’t have one yet, enter “applied” in this box.
Box F — Employer’s Name
Enter the employer name used on Form 941 or Schedule H (Form 1040).
Box G — Employer’s Address and Zip Code
Fill in your business address.
Box H — Other EIN Used This Year
If you used another EIN during the year (such as a previous employer’s EIN), enter it here.
Boxes 1-19 Wage and Tax Information
Boxes 1-11 — Federal Wage and Tax Totals
Boxes 1-11 on your W-3 contain the same categories as boxes 1-11 on each W-2 form. When filling out boxes 1-11 on your W-3, total up the amounts of the corresponding boxes on your W-2s and enter those numbers on your W-3.
For example, Box 1 on your W-3 should be the total of all the Box 1 amounts on the attached W-2 forms.
Boxes 1-11 include:
- Box 1 — Wages, tips, and other compensation
- Box 2 — Federal income tax withheld
- Box 3 — Social security wages
- Box 4 — Social security tax withheld
- Box 5 — Medicare wages and tips
- Box 6 — Medicare tax withheld
- Box 7 — Social security tips
- Box 8 — Allocated Tips
- Box 9 — Leave blank
- Box 10 — Dependent care benefits
- Box 11 — Nonqualified plans
Box 12a — Deferred Compensation
Enter the total contributions that employees chose to make to retirement plans or Roth plans. You’ll see a code on their W-2 for whichever retirement they chose, and a dollar amount next to it (their yearly contribution). In case you’re wondering what those codes are, they include:
- D — 401(k)
- E — 403(b)
- EE — Designated Roth contributions under 457(b) plan
- F — 408(k)(6)
- G — 457(b)
- H — 501(c)(18)(D)
- AA — Designated Roth contributions under a 401(k) plan
- BB — Designated Roth contributions under a 403(b) plan
- Y — Deferrals under a section 409A nonqualified deferred compensation plan
There are additional codes used for things like income from exercising stock options or contributions to a health savings account (HSA).
You can find detailed descriptions of each code on the IRS General Instructions for Forms W-2 and W-3. When filling out your W-3, add up the amounts in box 12a on your W-2s, and enter the dollar amount on your W-3, not the codes.
Box 13 — For Third-Party Sick Pay Use Only
Check this box if you’re a third-party sick payer or report third-party sick payments.
This box only applies to you if you have contracted a third party to handle all sick pay, including short-term and long-term disability benefits, and your agreement states that the third party will issue W-2 and W-3 forms for the payment.
Box 14 — Income Tax Withheld by Payer of Third-Party Sick Pay
If you had employees who received third-party sick pay and had federal taxes withheld from those payments, indicate that amount here. This amount is included in your Box 2 total, but it should also be separately noted here.
Box 15 — State/State Employer’s ID Number
Provide the two-letter abbreviation for your state or territory. If you’re filing W-2s with information from more than one state or territory, do not enter an abbreviation here. Instead, enter an “X.”
Boxes 16-19 — State and Local Wage and Tax Totals
Boxes 16-19 are similar to boxes 1-11, but instead of reporting federal wage and tax totals, you’ll report state and local totals. If you have W-2s from multiple states and localities, you don’t need to separate them. Add up all your W-2 state and local totals and list them as one amount here.
Boxes 16-19 are defined as follows:
- Box 16 — State wages, tips, and other compensation
- Box 17 — State income tax
- Box 18 — Local wages, tips, and other compensation
- Box 19 — Local income tax
How To File Your W-3
The SSA recommends e-filing because it improves accuracy and is more secure than mailing your forms. You can use the SSA’s Business Services Online (BSO) portal to file Form W-3.
Employers filing more than 250 W-2 forms must file electronically. If you’ve got less than 250 employees, you can mail paper copies of your W-2s and W-3 to the SSA by sending them to one of the following addresses:
If sending from U.S. Postal Service, send to:
Social Security Administration
Direct Operations Center
Wilkes-Barre, PA 18769-0001
If sending from another carrier (such as UPS or FedEx), send to:
Social Security Administration
Direct Operations Center
Attn: W-2 Process
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997
How To Fix W-3 Form Errors
If you discover an error on your W-3 tax form after you’ve submitted it to the SSA, you can still make changes. To do so, you’ll file Form W-3c, which can be done online or via mail. If the error came from a mistake on a W-2 form, also file a W-2c for any W-2 form that had errors.
Make Your Tax Season Go Well
Hiring employees for the first time is certainly exciting, but it also means you have to brush up on your small business taxes. You need to file W-2 and W-3 forms each year for your employees. The good news is that once your W-2s are complete, you have everything you need to file your W-3. And there’s only one W-3 form.
Now that you know all about a W-3, all that’s left to do? Make sure you’re getting all the info you need when you hire an employee, so it’s easy to fill out come tax time!
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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Hello Jane,
My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
Cheers,
John Doe
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Hi Jane,
Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
Cheers,
John Doe
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Hi Jane,
Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
Cheers,
John Doe
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Dear Jane,
Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
Cheers,
John Doe
5. Introducing a New Product
A happy client may want to expand their business with you.
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Hello Jane,
I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
Cheers,
John Doe
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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Hi Jane,
You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
Cheers,
John Doe
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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Hi Jane,
I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!
Cheers,
John Doe