What is a W-3 form? How to file it

In the United States, federal tax regulations require employers to report an annual payroll breakdown to the Social Security Administration (SSA), provide wage statements to employees, and support reporting to the Internal Revenue Service (IRS). To meet these requirements, employers must submit Form W-2 to both employees and the SSA and file Form W-3 with the SSA—typically by January 31. The SSA then shares this information with the IRS to complete the federal reporting process.

Most U.S. taxpayers are familiar with Form W-2, which employees use to report their wages and applicable tax withholdings when filing their federal income tax and state income tax. But along with issuing W-2s, employers also file a Form W-3. This form summarizes all wages paid and taxes withheld across the workforce, helping the SSA and IRS confirm that employer totals match employee filing.

Like any tax form, accuracy matters—mistakes or missed deadlines can lead to penalties and compliance issues. Filing correctly keeps payroll reporting on track and helps avoid problems with the IRS, SSA, and employees.

In this guide, we’ll explain what a W-3 is, who needs to file it, and why.

What is IRS Form W-3?

IRS Form W-3, officially titled Transmittal of Wage and Tax Statements, is a summary document that employers in the U.S. must file annually with the SSA along with their employees’ W-2 forms. While W-2 forms report individual earnings and tax withholdings to employees, Form W-3 consolidates this information into a single report so that the SSA can match it to what employers submit to employees and the IRS.

Employers submit a W-3 that corresponds with every W-2 they issue for the tax year. W-3 forms list total wages paid to employees, federal income tax withheld, Social Security and Medicare taxes, and other payroll-related tax information. The SSA reviews this form to track earnings and verify Social Security benefits.

Who needs to file Form W-3?

Any employer that issues one or more W-2 forms must file a single Form W-3 with the SSA. This applies to businesses of all sizes, including corporations, partnerships, nonprofits, and sole proprietors with W-2 employees.

Organizations that work exclusively with independent contractors, freelancers, and other self-employed individuals and issue 1099 forms do not need to file a W-3. 

What's included in IRS Form W-3?

The W-3 is an extensive summary of all W-2 forms submitted during a single tax year. It includes:

• Employer identification number (EIN)
• Employer name
• Employer address and ZIP code
• Employer state ID number
• Kind of employer (e.g., 501(c) non-government, state/local non-501(c), state/local 501(c), federal government)
• Employer phone number and email

Employers must also specify the total number of W-2 forms they submitted for the year and report the following information from W-2 forms to the IRS:

• Wages, tips, and other compensation
• Federal income tax withheld
• Social Security wages
• Social Security tax (OASDI) withheld
• Medicare wages and tips
• Medicare tax withheld
• Social Security tips
• Allocated tips
• Dependent care benefits
• Nonqualified plans
• Deferred compensation
• Third-party sick pay
• Income tax withheld for third-party sick pay
• Local wages and tips
• Local income tax

In some cases, an employer may submit more than one W-3 form, such as when it has different legal entities that operate under separate employer identification numbers. To track and organize payroll records, some employers assign a control number in Box A of Form W-3. 

This control number also appears in corresponding W-2s, helping link individual employee W-2s to the appropriate W-3. While not required by the IRS or SSA, control numbers make organizing complex tax information within payroll systems easier.

When to submit a W-3 Form

Employers must file Form W-3 with the SSA by January 31 each year—the same deadline for distributing W-2 forms to employees. This allows the SSA and IRS to cross-check the information for accuracy. 

Extensions for filing Form W-3 aren’t automatic and are only granted in extraordinary circumstances, such as a natural disaster that disrupts business operations. In such cases, employers must submit Form 8809 to request an extension. To avoid penalties, employers should file on time—either electronically through the SSA’s Business Services Online (BSO) or by mail if submitting paper forms. 

How to submit a W-3 tax form

Employers can file Form W-3 using two primary methods: electronic or paper filing by mail. Here are the requirements:

Electronic filing

The SSA’s BSO portal allows employers to submit W-2 forms electronically. Employers that submit more than 10 W-2s must file electronically. This method is faster, more secure, and reduces errors. 

When employers file a W-2 form electronically, the BSO portal automatically generates a W-3, ensuring that the summary form matches the submitted data. The portal also confirms receipt, helping payroll teams track tax submissions more effectively. 

Paper filing by mail

Employers filing fewer than 10 W-2s may submit paper W-3s by mail, along with the corresponding paper W-2s—but paper forms must be typed or machine-printed. It's important to note that paper filings take longer to process and increase the risk of errors or mismatched information. Because of this, many employers consider electronic filing to be the better option for filing taxes. 

What happens if you don't file Form W-3?

Missing the W-2 and W-3 submission deadlines can result in penalties based on how late the forms are filed. According to IRS guidelines, penalties range from $60 to $330 per W-2, depending on how late the IRS receives them. Intentional failure to submit carries a penalty of $660 per form. These penalties also accrue interest, with maximum totals ranging between $1.3 million and $4 million, depending on the type of business. 

Late filing isn’t the only issue that can trigger penalties. The IRS may also charge penalties for any of the following reasons: 

• Failure to include all required information on Form W-2
• Providing incorrect information on Form W-2
• Filing paper forms when electronic filing is required
• Reporting an incorrect TIN
• Failing to report a TIN
• Submitting paper Forms W-2 that are not machine-readable

That said, the IRS allows organizations to dispute penalties to reduce or waive fines. To qualify, employers must demonstrate reasonable cause for the error, such as a natural disaster or payroll software failure beyond the employer’s control. Staying compliant by filing accurately, whether in-house or through a global payroll provider like Oyster, helps organizations avoid unnecessary fines and costly administrative or legal issues. 

Simplify tax reporting across borders with Oyster

Whether in the U.S. or elsewhere, tax season is predictable. With Oyster, tax processes are just as straightforward—whether you're filing IRS forms like W-2s, W-3s, and W-8BENs or managing payroll requirements across international borders. Our expert HR support helps organizations handle reporting and lighten administrative workloads.

Oyster simplifies payroll with up-to-date tax expertise while ensuring compliance in 180+ countries—so employers file accurately wherever they operate.

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