Annual Wage Reporting and Compliance – W-2 and W-3
Today’s tip is a friendly reminder about annual wage reporting and compliance, which includes both providing a W2 to each employee who worked for your charter in the calendar year 2020 and filing employee wage information with the Social Security Office (SSA) using form W3.
As you close out the calendar year and start to prepare for a new year and a new semester, now is the time to make sure you are ready for W-2 reporting. Read below to find out the steps you should take to complete this reporting requirement.
Who Must Submit These Forms?
According to the IRS website, www.irs.gov/w2, every employer engaged in a trade or business who pays remuneration, including non-cash payments of $600 or more for the year (all amounts if any income, social security, or Medicare tax was withheld) for services performed by an employee must file a Form W-2 for each employee (even if the employee is related to the employer) from whom:
- Income, social security, or Medicare tax was withheld, or for whom
- Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4, Employee’s Withholding Allowance Certificate.
What are the W2 and W3?
Tax Form W-2 is a multi-page form that reports employees’ annual earning and withholdings to both the employee and governmental agencies, including the IRS and Social Security Administration (SSA). Each year, Charter schools must send Copy A of Forms W-2 (Wage and Tax Statement) to Social Security to report the wages and taxes of their employees for the calendar year. In addition, a Form W-2 must be given to each employee. The Charter files the IRS and SSA copies directly with those agencies and provides the employee with sufficient copies to meet the other reporting needs. W-2 Forms may be filed with SSA electronically or on paper, however electronic submission is the strong preference of IRS ad SSA.
Tax Form W-3 is the form showing total earnings, Medicare wages, Social Security wages, and withholding for all employees combined, encompassing the entire year. To ensure accuracy, the totals from Tax Form W-3 should equal the total on all submitted W-2 forms.
When are reports due?
- To your employees: January 31 is the deadline to distribute Forms W-2 to employees.
- To the SSA: Forms W-2 and the associated W-3 form with the SSA is due January 31, 2021, whether you file using paper forms or file electronically.
What is the criteria for reporting FFCRA leave on W-2’s?
If you provided Families First Coronavirus Response Act (FFCR) leave to your staff, you must report these wages on the W-2. FFCR paid leave was available to qualified employees from April 1, 2020 – December 31, 2020.
Wage information is reported the same as their regular wages except that Box 14 of the employee’s Form W-2 will have to be filled out as well. The amount of FFCRA must be listed here as well as a statement stating what type of FFCRA leave was used. An additional statement may also be attached to the W-2 if needed.
Types of FFCRA payments to be reported:
- Sick leave wages subject to the $511 per day limit.
- Sick leave wages subject to the $200 per day limit.
- Family leave wages paid under the Emergency Family Medical Leave Expansion Act (EFMLEA).
What happens if an employee terminates before year-end?
If the employee leaves your Charter, whether voluntarily or involuntarily, you may opt for either option:
- The charter school may wait until next January 31, to submit the W-2 to former employee.
- If a request is submitted by the employee in writing prior to December 31, then the employer must send the W-2 to employee within 30 days of request.
Is an Extension of time available to file?
Extensions of time to file Form W-2 with the SSA are no longer automatic. You may request one 30-day extension to file Form W-2 by submitting a complete application on Form 8809, Application for Extension of Time to File Information Returns, including a detailed explanation of why you need additional time and signed under penalties of perjury. Note: The IRS will only grant the extension in extraordinary circumstances or catastrophe.
Where do I get forms?
For many Texas Charters, your Region Service Center provides these forms directly to you. Contact the Business Services Lead at your ESC for specifics.
You may file Forms W-2 and W-3 electronically on the SSA’s Employer W-2 Filing Instructions and Information web page, which is also accessible at www.socialsecurity.gov/employer. You can create fill-in versions of Forms W-2 and W-3 for filing with SSA. You may also print out copies for filing with state or local governments, distribution to your employees, and for your records.
Note: Copy A of this form is provided for informational purposes only. Copy A appears in red, similar to the official IRS form. The official printed version of this IRS form is scannable, but the online version of it, printed from this website, is not. Do not print and file Copy A downloaded from this website with the SSA; a penalty may be imposed for filing forms that can’t be scanned. See the penalties section in the current General Instructions for Forms W-2 and W-3, available at www.irs.gov/w2, for more information.
Please note that Copy B and other copies of this form, which appear in black, may be downloaded, filled in, and printed and used to satisfy the requirement to provide the information to the recipient. To order official IRS information returns such as Forms W-2 and W-3, which include a scannable Copy A for filing, go to IRS’ Online Ordering for Information Returns and Employer Returns page, or visit www.irs.gov/orderforms and click on Employer and Information returns. They will mail you the scannable forms and any other products you order. See IRS Publications 1141, 1167, and 1179 for more information about printing these tax forms.
As an alternative, you can also check with your software vendor. Sometimes, vendors will provide forms directly for their clients, and they will have a process for filing your forms online through their software. Please check with them for those directions.
Where To File:
If not submitting electronically, all Paper filers must send paper Copies A, and W-3, to the same location
- Social Security Administration, Data Operations Center, Wilkes-Barre, PA 18769-0001
Where Can I Find More Information?
Let Charter School Success walk you through this process. Sign up for our newly updated course — End of Year Processing: 1099 and W2 — here.
More information can be found at the IRS website, located at www.irs.gov/w2