Step 5: Preparing and Filing Forms W-2 and W-3

By no later than January 30th, you are required to give a Form W-2 ("Wage and Tax Statement") to each household employee you hired the previous year. Form W-2 consists of several lettered and numbered copies. Copies "B", "C" and "2" are for your employee.

Remember, you are required to give each employee to whom you paid wages the previous year a Form W-2, even if they no longer work for you. If your employee leaves during the year, you can give them a W-2 at any time; you do not need to wait until the end of the year. If a former employee asks you for a W-2, give him or her a W-2 within 30 days of the request or within 30 days of your last wage payment, whichever is later.

You are also required to send Copy A of Form W-2 with Form W-3 ("Transmittal of Wage and Tax Statements") to the Social Security Administration by February 28th of the following year. Form W-3 aggregates all wage information from all the W-2s for the relevant tax year. You only file one Form W-3 no matter how many employees you had the previous year. Refer to either IRS Publication 926 or the SSA's website (www.socialsecurity.gov/employer) for more information on filing Form W-3.

You should also check with your state revenue department to determine if you are required to send it a copy of your employee’s W-2. Many states have their own version of federal Form W-3, and require you to submit their form with a copy of your employee’s Form W-2. The state deadline for filing Forms W-2 may not be the same as the federal deadline, so check with your state revenue department for the relevant deadlines.

A W-2 form is used by employers to report to your household employee and the government the amount of cash wages paid to your household employee and deductions withheld. You must file Form W-2 for each household employee to whom you paid this year $1,800 or more of cash wages that are subject to Social Security and Medicare taxes. To find out if the wages are subject to these taxes, you should read the instructions for Schedule H. If the wages are not subject to these taxes but you withheld Federal income tax from the wages of any household employee, you must still file a Form W-2 for that employee.