Where and When to File the W-2/W-3
The W-2
/W-3
forms are Internal Revenue Service (IRS) forms that are filed with
the Social Security Administration (SSA). The IRS receives this information from
the SSA for federal tax data purposes.
Employers must file Forms W-2 and W-3 by the last day of February each year. In
addition, Form 6559, Transmitter Report and Summary of Magnetic Media, is filed
for magnetic reports of Forms W-2. Instructions for completion are on the back
of the form. Instructions for filing magnetic media W-2 reports are issued by
SSA in its publication “Magnetic Media Reporting” which can be found on their
web site at
www.ssa.gov/employer/pub.htm. If you submit Form W-2 data on magnetic media, do not submit the same W-2 data
to SSA on paper forms.
Duplicate Earnings
Duplicate posted earnings are annual earnings that are erroneously posted as
social security wages on an employee’s record at SSA from the W-2 data and
correctly posted on the corresponding employee record at the RRB from
Form Ba-3
,
"Annual
Report of Creditable Compensation". Duplicate earnings overstate an employee’s
lifetime earning record, thus creating the potential for a benefit overpayment
when a railroad retirement or social security benefit is paid to that
individual.
Correct completion of Forms W-2/W-3 is important in preventing duplicate
earnings and correctly crediting an employee’s earnings record.
How to Avoid Duplicate Earnings
The key concept in preventing duplicate earnings is to correctly identify the
type of employment on Form W-3 for the accompanying W-2 data. It is important
that employers covered under the RRA mark the correct box in the “Kind of Payer”
block of the Form W-3. “CT-1” is the only box which should be marked. For
magnetic media reports, railroad employees should be reported with an “X” in the
Type Of Employment (TOE) field of the code E record.
Whether reporting by paper or magnetic media, railroad employees should not
have their railroad retirement tax reported as social security tax, nor their
railroad earnings reported as social security wages. Dollar amounts reported on
Forms W-2 should balance with those on Form W-3.
Common Error
A common error for railroad employers is to enter the Medicare tax amounts
withheld in the “Medicare tax withheld” block. This Medicare box is for
employees covered under the SSA. If the Medicare box is completed, SSA looks for
corresponding social security taxes. Because railroad employers do not make
entries for social security wages, this creates a discrepancy which must be
resolved.
Proper Completion of W-2/W-3
In accordance with the SSA instructions for completion of Form W-2/W-3,
employers covered under the RRA must complete the forms as follows:
• Mark "CT-1" under "Kind of Payer" on Form W-3. "CT-1" is the only box that
should be marked. For magnetic media reports, code an "X" in the Type of
Employment (TOE) field of the code E record;
• On Form W-2, make no entries in boxes 3, 4, 5, and 6. The corresponding
boxes on Form W-3 should also be blank for RRA covered employees; and
• RRA covered employers must enter the amount of Tier I and Tier II tax
withheld in the box marked “Other”. You may also include optional information
such as Medicare tax, Tier I and Tier II compensation in the same box.
The Forms W-2/W-3 example at the end of this chapter illustrates the correct
completion of the forms for employees covered under the RRA.
Segregating Railroad Retirement Employees
and Social Security Employeest
If you have employees covered under the SSA by virtue of the segregation of
your rail labor union business as set forth in Section 202.3 of the RRB’s
Regulations, separate forms W-2/W-3 should be filed for the employees of your
separate non-rail labor unit. Issue separate W-2’s for employees who work in two
positions when one is covered by RRA and the other is covered by SSA.
If you determine your Forms W-2/W-3 contains an error and railroad earnings
may have been processed as social security wages, contact the local SSA office
for advice.
SSA magnetic media Form W-2
SSA has created, and is continuously updating, a list of Employer
Identification Numbers (EIN) that belong to employers covered under the RRA.
This list is compared to the EIN in the Employer record (code E) of each Form
W-2 magnetic media report which SSA receives. If a match is made, SSA will check
to ensure that the report has a type of employment code “X” for railroad and
that the Employee records (code W) have zeroes in all the social security and
Medicare fields.
This processing is ideal for employers who either have no employees covered
under SSA or have segregated their rail labor union business as a separate
employer with a separate EIN from their non-rail labor business. The processing
will help ensure that RRA W-2 reports and SSA W-2 reports are completed and
processed correctly.
Employers who have the same EIN for their segregated rail labor union
business and non-rail labor business cannot participate in this enhanced
processing. Once an EIN has been included in SSA’s program and specified as RRA
earnings, SSA wages cannot be reported under this EIN. Employers can request SSA
to issue separate EINs for rail labor union business and non-rail labor
business.
How to participate in enhancement processing
Contact a Compensation Specialist in the Quality Reporting Service Center
Quality Reporting Service Center
Railroad Retirement Board
844 North Rush Street
Chicago, Illinois 60611-2092
Phone: |
(312) 751-4992 |
Fax: |
(312) 751-7190 |
E-mail: |
QRSC@rrb.gov |
Experience Rating
Specialist: |
(312) 751-4550 |
for a
certification form. If you have questions about how the EIN's will be used in
the processing at SSA, contact SSA at (410) 965-7068.
Questions about SSA forms W-2 and W-3
Representatives from the RRB have no authority to give definitive answers to
Forms W-2/W-3 questions. Questions concerning the completion of Forms W-2/W-3
may be directed to a Compensation Reporting specialist at the RRB. However, it
may be necessary for them to refer you to an IRS or SSA W-2/W-3 Specialist for
answers to some questions.
Who files Form W-2/W-3
All employers who pay compensation subject to income tax or payroll tax must
file Forms W-2
and
W-3
annually. In addition,
Form 6559
,
Transmitter Report and Summary of Magnetic Media, is filed for magnetic tape
reports of Forms W-2.
Instructions for filing W-2 reports are issued by SSA annually and are found on
their web site at
www.ssa.gov/employer/pub.htm.
How to complete Form W-2/W-3 for railroad
compensation
It is important that employers covered under the Railroad Retirement Act (RRA)
mark "CT-1" under "Kind of Payer" on Form W-3. "CT-1" is the only box that
should be marked. For magnetic media reports, code an "X" in the Type Of
Employment (TOE) field of the code E record.
Railroad employers should make no entries in boxes 3, 4, 5, and 6 of
Form W-2
or
in the corresponding boxes on Form
Form W-3
. A common error is to enter Medicare tax
withheld in the Medicare tax block - an understandable error since Medicare
taxes have been paid. The Medicare box is for employees covered under the Social
Security Act (SSA).
Show Tier I and Tier II taxes on Form W-2
In accordance with the Social Security Administration's instructions for
completion of Form W-2
, employers covered under the Railroad Retirement Tax Act
must show, in the 'Other' box , the amount of Tier I and Tier II tax withheld.
Be sure that the Tier I tax entered does not include Medicare tax. In addition
to the Tier I and Tier II tax withheld, you may include optional information in
the 'Other' box, such as Medicare tax withheld.
IRS/SSA jurisdiction
Representatives from the RRB have no authority to give definitive answers to
Forms W-2/W-3 questions. Questions concerning the completion of Forms W-2/W-3
may be directed to:
Quality Reporting Service Center
Railroad Retirement Board
844 North Rush Street
Chicago, Illinois 60611-2092
Phone: |
(312) 751-4992 |
Fax: |
(312) 751-7190 |
E-mail: |
QRSC@rrb.gov |
Experience Rating
Specialist: |
(312) 751-4550 |
However, it
may be necessary for them to refer you to an IRS or SSA W-2/W-3 Specialist for
answers to some questions.
|