Vision Payroll

The Internal Revenue Service (IRS) recently released revised 2010 Form W-2, Wage and Tax Statement, and revised 2010 Form W-3, Transmittal of Wage and Tax Statements. The revised 2010 Instructions for Forms W-2 and W-3 indicate that employers should:

Report the amount of wages and tips paid to the qualified employee for which you claimed the payroll tax exemption in Box 12, using code CC. This will include wages and tips paid to the qualified employee from April 1, 2010, through December 31, 2010, for which you claimed the payroll tax exemption, plus wages and tips paid to the qualified employee from March 19, 2010, through March 31, 2010, for which you claimed a credit in the second quarter of 2010. The amount may not exceed $106,800 (2010 maximum social security wage base).

The box on the Form W-3 to report deferred compensation was moved from box 12 to box 12a. In addition, a new box 12b was added to report HIRE exempt wages and tips. Contact Vision Payroll if you have any questions on the 2010 Form W-2 and revised 2010 Form W-3.

The third and final deadline applicable to federal filing of Forms W-2 is approaching. The first deadline, January 31, 2009, was the deadline for providing copies of Form W-2 to employees. The second deadline, February 28, 2009 (extended to March 2, 2009 because of the weekend), was the deadline for filing paper copies of Forms W-3 and Forms W-2 with the Social Security Administration. The final deadline, March 31, 2009, is the deadline for electronic filing of Forms W-3 and Forms W-2 with the Social Security Administration. In addition to the later deadline, electronic filing offers the following benefits to employers:

1. It is free, fast and secure.
2. It saves time and reduces filing burden.
3. It provides an immediate receipt for proof of filing.

Vision Payroll uses electronic filing for all filing of Forms W-3 and Forms W-2 with the Social Security Administration. Contact Vision Payroll if you have further questions on these forms.

This week’s question comes from Kelly, a business owner. I already gave my employees their W-2s. Do I still need to file Form W-3? Answer: Anyone required to provide a Form W-2 to an employee must file Form W-3, Transmittal of Wage and Tax Statements. Employers may file Form W-3 on paper if transmitting fewer than 250 Forms W-2. Transmit Copy A of Form W-2 with Form W-3 to the Social Security Administration (SSA). Employers transmitting 250 or more Forms W-2 must file them electronically. All employers are encouraged by the SSA to file electronically, even if not otherwise required, to reduce costs and increase accuracy. Vision Payroll files Forms W-3 for all clients electronically with the SSA.

Employers must file the 2008 Form W-3, Transmittal of Wage and Tax Statements, on or before March 2, 2009 if filing by paper or March 31, 2009 if filing by an approved electronic means.

Employers should check only one box in section b, Kind of Payer. The only exception is for Third-party sick pay, which should be checked along with one other box if third-party sick pay is reported on the Form W-3.

Box c should include only the total number of valid Forms W-2 filed, not including voids.

Box h should contain other EINs (employer identification numbers) used on Form 941, Form 943, Form 944, or Form CT-1 during the year. An example is a prior owner for whom the filer is a successor.

Boxes 1 through 11 should contain a simple arithmetic sum of all the Forms W-2 filed with this Form W-3 for the respective box.

Box 12 should also contain a sum of all the Forms W-2 filed with this Form W-3, but should be totaled irrespective of and without reference to any code.

Box 14 should contain the “federal income tax withheld on third-party payments of sick pay” even though the amount was already reported in box 2.

Box 15 should contain the two-character abbreviation for the state being reported, but if more than one state is reported, only an X should be entered. Likewise, boxes 16-19 should include the total for all such boxes, regardless of how many are reported.

Employers should reconcile Forms W-3 not only to the individual Forms W-2, but also to the sum of Forms 941, Forms 943, Forms 944, or Forms CT-1 filed for the year.

Vision Payroll files Forms W-3 for all clients electronically with the Social Security Administration. Contact Vision Payroll if you have any questions on Form W-3.