Understanding W-2s and W-3s: A School's Guide to Year-End Payroll Reporting

 By the time the calendar flips to January, year-end payroll tasks jump to the top of your to-do list. One of the most important responsibilities? Issuing W-2s—and the W-3 that goes with them.

If this is your first time handling W-2s, don’t worry. Here’s a clear, school-friendly guide to understanding what these forms are, who gets them, and how to file them correctly.

What Is a W-2?

The W-2 is a form that reports how much an employee was paid during the year and how much was withheld for taxes.

You must provide a W-2 to every employee who received wages, salaries, or other taxable compensation through payroll—even if they only worked one pay period.

Each W-2 shows:

• Total wages paid

• Federal, state, and local income tax withheld

• Social Security and Medicare wages and withholding

• Any other applicable benefits (like retirement contributions or dependent care benefits)

💡 If someone was paid through payroll, they get a W-2. If they were paid as a contractor, they get a 1099—not a W-2.

 

What Is a W-3?

The W-3 is the summary form that goes along with your W-2s.

You don’t give it to employees—it’s filed with the Social Security Administration (SSA) to report totals for:

• Wages paid

• Tax withheld

• Number of W-2s submitted

Think of it like the “cover page” for your batch of W-2s.

How It Works in a School Setting

Most schools use a payroll system that automatically generates both W-2s and the W-3. But it’s still your job to:

• Verify the numbers

• Distribute W-2s to staff by January 31

• Submit W-2s and the W-3 to the SSA

Whether you file electronically or by mail, the deadline to send everything is January 31.

🟡 Tip: Electronic filing is required if you're submitting 10 or more W-2s, starting in 2024.

 

Common W-2 Boxes to Review

Here’s a quick breakdown of what some of the most common boxes on a W-2 mean:

Be sure to cross-check your final payroll reports with the W-2 output to ensure accuracy.

How to Distribute W-2s

• Employees must receive their W-2 by January 31

• You can mail a paper copy or deliver it electronically (with proper consent)

• Keep a copy for your records, and store it securely

🔐 Remember: W-2s contain Social Security Numbers and must be treated as confidential.

 

W-2 or 1099? Quick Test:

| Was the person paid through payroll? | ✅ Issue a W-2
| Did you withhold taxes? | ✅ Issue a W-2
| Did they receive a flat check for services and no taxes withheld? | ✅ Issue a 1099

Yes, it’s possible for someone to get both a W-2 and 1099 if, for example, they’re a staff member and also a referee paid separately.

Quick W-2 and W-3 Checklist

• Confirm all employee wages and withholding totals are accurate

• Verify addresses and Social Security Numbers

• Check totals on the W-3 match your W-2s

• Submit forms to the SSA by January 31

• Provide employees with W-2s by January 31

Final Thoughts: W-2s Are About Accuracy and Clarity

W-2s and W-3s aren’t just forms—they’re how your employees report income, file taxes, and verify their retirement credits. Taking time to ensure accuracy now saves time (and amended forms) later.

If you're new to the process, don't hesitate to:

• Ask for a second set of eyes on your totals

• Use your software vendor’s resources or help desk

• Check SSA and IRS websites for updated guidance

You don’t have to know everything—you just have to ask the right questions and double-check your details.