When there are discrepancies between amounts reported on Form 943 filed with the IRS and Forms W-2 and W-3 filed with the SSA, the IRS must contact you to resolve the discrepancies.
To help reduce discrepancies:
- Report bonuses as wages and as social security and Medicare wages on Forms W-2 and 943;
- Report social security and Medicare wages and taxes separately on Forms W-2, W-3, and 943;
- Report social security taxes on Form W-2 in the box for social security tax withheld (box 4), not as social security wages;
- Report Medicare taxes on Form W-2 in the box for Medicare tax withheld (box 6), not as Medicare wages;
- Make sure that social security wages for each employee do not exceed the annual social security wage base; and
- Do not report noncash wages that are not subject to social security or Medicare taxes as social security or Medicare wages.
To reduce the discrepancies between amounts reported on Forms W-2, W-3, and 943:
- Be sure that the amounts on Form W-3 are the total amounts from Forms W-2, excluding any amounts from Forms W-2 that were marked void, and
- Reconcile Form W-3 with your Form 943 by comparing amounts reported for the following items.
- Federal income tax withholding, social security wages, and Medicare wages.
- Social security and Medicare taxes. The amounts shown on Form 943, including current year adjustments, should be approximately twice the amounts shown on Form W-3.
- Advance earned income credit (EIC).
Amounts reported on Forms W-2, W-3, and 943 may not match for valid reasons. If they do not match, you should determine that the reasons are valid. Keep your reconciliation so that you will have a record of why amounts did not match in case there are inquiries from the IRS or the SSA.