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Publication 51

11. Reconciling Wage Reporting Forms(p21)

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 may contact you to resolve the discrepancies.
To help reduce discrepancies:
  1. Report bonuses as wages and as social security and Medicare wages on Forms W-2 and 943;
  2. Report social security and Medicare wages and taxes separately on Forms W-2, W-3, and 943;
  3. Report social security taxes on Form W-2 in the box for social security tax withheld (box 4), not as social security wages;
  4. Report Medicare taxes on Form W-2 in the box for Medicare tax withheld (box 6), not as Medicare wages;
  5. Make sure that social security wages for each employee don't exceed the annual social security wage base; and
  6. Don't report noncash wages that aren't subject to social security or Medicare taxes as social security or Medicare wages.
Take the following steps to reduce the discrepancies between amounts reported on Forms W-2, W-3, and 943.
  1. 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.
  2. Reconcile Form W-3 with your Form 943 by comparing amounts reported for the following items.
    1. Federal income tax withheld.
    2. Social security wages and Medicare wages.
    3. Social security and Medicare taxes. Generally, the amounts shown on Form 943, including current year adjustments, should be approximately twice the amounts shown on Form W-3.
Amounts reported on Forms W-2, W-3, and 943 may not match for valid reasons. For example, if you withheld any Additional Medicare Tax from your employee's wages, the amount of Medicare tax that is reported on Form 943, line 5, won't be twice the amount of the Medicare tax withheld that is reported in box 6 of Form W-3. If they don't match, you should determine that the reasons are valid. Keep your reconciliation so that you will have a record of why amounts didn't match in case there are inquiries from the IRS or the SSA.