W-2 Reporting Procedure

This topic describes the steps in the W-2 Reporting process.  The W-2 Reporting Procedure encompasses the steps you will take to create, edit, and print employee W-2s.  In addition, you have the options for generating the W-2 Magnetic file containing the employee W-2 information and for uploading the W-2 Magnetic file electronically to the government, if applicable.

Important W-2 Reporting Reminders:

  • Read and review all of the steps in the W-2 Reporting Procedure before beginning.  For questions, please contact NDS Technical Support.

  • NDS recommends that you do a test run that includes going through the steps listed below and printing the W-2s using plain paper before the last payroll of the year so you can make any necessary changes and adjustments before the end of the year.

  • All entries should be in UPPER CASE only.  Do not use punctuation.

  • For more information regarding entries in specific data fields, please refer to the documentation supplied by the IRS and the Social Security Administration.

  • If you are filing employee W-2 information electronically:

  • Both the Social Security Administration (SSA) and NDS encourage you to download and run the Social Security Administration's free AccuWage Software for the current tax year, which reads your files and checks for errors.  It is important to do this before you submit the file to the SSA.  For more information, see W-2 AccuWage Testing.

  • In addition, the submitter must obtain a User ID and Password.  For more information on obtaining a User ID/Password go to http://www.ssa.gov/bso/bsowelcome.htm.
     

 

W-2 Reporting Set Up Steps

Each year before you start the W-2 Reporting process, be sure to check all records for accuracy.

1.  Maintain the W2 Employer Master Record.

2.  Maintain the W2 Box Tables for the deduction and other pay amounts to print in Boxes 10, 11, 12 and 14.

3.  Maintain the Local Tax Code Table if you assess local taxes.

4.  Perform file maintenance for electronic filing, if you submit employee W-2s electronically to the government:

a.  Maintain the W2 Transmitter Record.

b.  Maintain the file name and export location for the W-2 Magnetic file during W2 Destination File Maintenance.

c.  Maintain the appropriate State Supplemental Data Records to maintain additional information required by the state for processing employee W-2s.

d.  Obtain or verify the submitter's User ID and Password for uploading the W-2 Magnetic file to the Social Security Administration.

 

W-2 Reporting Steps

1.  After the last payroll of the year and before you clear the payroll files, print the following reports to be used for reconciliation purposes:

a.  Employee Earnings & Withholding Report for the fourth quarter

b.  Deductions Totals Report for the year end

2.  Build the Employee W-2 Master Records.

3.  Consolidate the W-2 Records, if you have employees with multiple W-2s.
Note:  This routine is optional.  You can choose to run this routine, if you have employees who have multiple W-2s and you want to consolidate them into one employee W-2.

3.  Edit employee W-2 Master Records that need changing during W-2 Master FM.

4.  Print W-2 Forms.
Note:  NDS recommends that you print the W-2s on plain paper to review and verify the accuracy of the employee w-2 information prior to printing them on the actual forms.

Note:  Only use the following steps if you are sending your W-2 Magnetic file electronically to the government.

5.  Run the XML W-2 Magnetic Filing routine to create the W-2 Magnetic file.

6.  Download and run AccuWage to test the W-2 Magnetic file for errors.  
Note:  NDS strongly recommends that you run AccuWage to ensure that the W-2 Magnetic file is error-free.

7.  Submit the W-2 Magnetic file electronically to the Social Security Administration.
Note:  The person who submits the W-2 Magnetic file must have a valid User ID and password from the SSA.