February is another important month for payroll tax reports.  In January, you distributed W-2 forms to employees and 1099-MISC forms to contractors (you did do that, right?).  By the end of February, you must submit a summary report to the Social Security Administration (SSA), along with the forms you gave workers. The summary report for employees is Form W-3, which you send along with all employee W-2 forms.


  For contract workers, the summary report is on Form 1096, which you send along with all 1099-MISC forms.

A couple of things to remember:

• The total on the W-3 or 1096 must agree with the total of all W-2s or 1099-MISC forms.
• If you are submitting more than one type of 1099 (for retirees, it would be 1099-R, for example), you must have a summary 1096 for each different type.

You can submit W-2s to the SSA directly online through their Business Services Online portal.  You will need to set up a user name and password first.  Then the SSA says you can "send forms W-2 and W-2c to Social Security by uploading a specifically formatted electronic file or by directly keying W-2 and W-2c information into an online form."

Be Sure Transmittal Forms are Correct
There is a good chance that you already have the W-3 and 1096 forms, which may have been prepared by your CPA or accountant.  Don't send them out just yet.  Wait to see if any of the employees or contractors has a correction on a W-2 or 1099 first.

  It is much easier to fix mistakes on these forms before you send them to the SSA than after.

For More Information:

How to Prepare Form 1096 (Transmittal for 1099s)

How to Prepare Form W-3 (Transmittal for W-2s)

End of Year Wage and Tax Reports for Employees and Contractors

All February Tax Reports and Payments