W-2 Processing Prompts

Starting W-2 Processing

Each year before you start the W-2 process, be sure to check all information and the tax year on W-2 Employer for accuracy.  Edit as needed.  Click Settings to display the options.

1.  Maintain the W-2 Employer information.

2.  Maintain the W-2 Box Tables for the deduction and other pay amounts to print in boxes 10, 11, 12 and 14.  Note:  As of 2025 a fourth line is available in box 14 for reporting overtime pay.

3.  Maintain the Local Tax Codes if you assess local taxes.

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

a.  Maintain the W-2 Transmitter information.

b.  Maintain the file name and export location for the electronic W-2 file during W-2 Export Destination Maintenance.

c.  Maintain the appropriate State Supplemental Data 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 file to the Social Security Administration.

Create Employee W-2s

Use the Create Forms function to create the employee W-2s for the current tax year from the current payroll information.  In addition, the W-2s are used to generate the information in the W-2 file if you are filing electronically.  To create employee W-2s, click Create Forms and the following screen displays:

 Important:  

• It is important to run Create Forms AFTER the last payroll run of the year and BEFORE you perform the payroll year end routines.  Once you run the payroll year end routines, the employee earnings and withholding information for W-2s is cleared.

• While you can run Create Forms as many times as necessary until the Payroll totals are cleared, if you make edits to individual employee W-2s using the Edit Forms function the edits are lost each time you run Create Forms.

• All deduction amounts to be reported in boxes 10, 11, 12 and 14 must be set up before running Create Forms.  For information, see W-2 Box Tables.

To begin, click Proceed or press [ENTER].  Keyboard shortcut:  [ALT + p]

Or to escape from the routine, click Cancel .  Keyboard shortcut:  [ALT + c]

After clicking Proceed, the following window displays:

Tax Year last processed ccyy

Displays the tax year of the last create for your reference.

Note:  Confirm that the displayed Tax Year is the correct year before proceeding with the routine.

Create backup of existing data

To maintain a backup file called W2WORK, click to select the box.

To omit maintaining a backup of the data, leave the box blank.

To create W-2s after confirming the tax year is correct, click Proceed or press [ENTER].  Keyboard shortcut:  [ALT + p]

Or, to escape from the routine, click Cancel  Keyboard shortcut:  [ALT + c]

Processing

Displays information pertaining to the various phases of the Create W-2 Forms routine to guide you.

 Important:  The Processing Window displays Process Complete when the process is ended.  

To close the screen when Process Complete displays and the routine is finished, click Close. Keyboard shortcut:  [ALT + d]

Organizing Employee W-2 List

The employee W-2s display in a list, which can be sorted by any of the columns and filtered to narrow the list of w-2s, if needed.

Sort

The w-2 list can be sorted by information in any column employee number. To sort, simply click the desired column heading. To sort in reverse order, click the column heading a second time.

Filter

Filter can be used to find specific information.  For example, to find for an employee, click Filter by Employee # column.  From the Filter choices uncheck All and then select the employee # that you want to view.

Employee # Column Filter Example:  

Adding, Editing and Deleting W-2s

Use the Add and Edit forms functions to view, create, or edit individual employee W-2 information.  Both add and edit use the same screen, which displays in the same format as the employee W-2 form.  Any box amounts that cannot be created through Create Forms function can be maintained using this routine.

• To add a W-2, click Add and the Edit W-2 Form screen opens.

• To edit an employee W-2, double-click the desired employee.  The Edit W-2 form screen opens.

Notes:  

• Please refer to the documentation provided by the IRS for assistance with questions on specific entries within the boxes.

• The letter or number that displays next to a field in this maintenance corresponds to the letter or number for a specific box on the W-2 form.

• For more information, see the W-2 Forms Process.

Edit W-2 Forms Window Example:

Employee Number

If you are editing a W-2 the employee number for the employee W-2 is displayed.

If you are building a new employee W-2 enter the employee number and click Retrieve.  New  displays near the employee number.  Default entries display and the first field is highlighted to let you know you can begin entering information.

Sequence Number

Displays the first sequence number for the employee, if an employee has multiple W-2s.  To change, enter the new sequence number for the appropriate W-2 for the employee.

Federal ID#

Displays the submitter's Federal ID number. (up to 11 characters, xx-xxxxxxx)

Employer Name - Zip Code

The following fields contain the information maintained during W-2 Employer Maintenance and are display-only.

• Employer Name - Displays the employer name.

• Street Address - Displays the employer street address.

• City, State - Displays the employer city name and state.

• Zip Code - Displays the employer zip code.

Employee Name

Displays the employee first name and middle initial in the first box.  You can enter another employee first name and middle initial, if needed.  The employee last name displays in the second box.  You enter another employee last name if needed. (up to 15 characters per box)

Employee Address

The employee address information includes:

• Address 1, 2, 3 - The 3 lines for the employee mailing address displays.  You can enter the new mailing address lines, if needed. (up to 20 characters, per line)

• City, State - The city name and state for the employee mailing address displays.  You can enter another city and state, if needed.

• Zip Code - The zip code or the Zip+4 code for the employee mailing address displays.  Enter another zip code, if needed. (up to 11 characters)

Department

The department number for the employee displays, but can be changed if needed. (up to 8 characters)

W-2 Fields

The W-2 amounts:

• Wages, Tips, Other - The dollar amount for the employee's accumulated wages, tips and other compensation displays, but can be changed if needed. (7.2 numeric)

• Federal Income Tax WH - The accumulated dollar amount for the federal income tax withheld for the employee displays, but can be edited if needed. (7.2 numeric)

• Social Security Wages - The accumulated dollar amount for the employee's social security wages displays, but can be edited if needed. (7.2 numeric)

• Social Security Tax WH - The accumulated dollar amount withheld for social security taxes for the employee displays, but can be edited if needed. (7.2 numeric)

• Medicare Wages - The dollar amount accumulated for the employee's Medicare wages displays, but can be edited if needed. (7.2 numeric)

• Medicare Tax WH - The accumulated dollar amount withheld for the employee's Medicare tax displays, but can be edited if needed. (7.2 numeric)

• Social Security Tips - The accumulated dollar amount for the employee's social security tips displays, but can be edited if needed. (7.2 numeric)

• Allocated Tips - The dollar amount allocated for employee tips, if you are a food and beverage establishment displays, but can be edited if needed. (7.2 numeric)

• Advance EIC Payment - The dollar amount paid to the employee as advance earned income credit displays, but can be edited if needed. (7.2 numeric)

• Dependent Care Benefits - The dollar amount for dependent care benefits under a dependent care assistance program paid or incurred by the employer for the employee displays, but can be edited if needed. (7.2 numeric)

• Nonqual Plan Dsb - Enter the amounts from box, 1, 3 or 5 that was earned in a prior year, if applicable. (7.2 numeric)

• Type - Displays the IRS type code that pertains to the amount in box 12.
  Tip:  The IRS type code is the box 12 type setting maintained during W 2 Box Table Maintenance.

• Amount - Enter the dollar amount that pertains to the code in box 12. (7.2 numeric)

• S/E - If the employee is a statutory employee whose earnings are subject to social security and Medicare taxes but not subject to federal income tax withholding, enter Yes.  Otherwise, enter No.

• PP - If the employee actively participated in a retirement plan for part of the year, enter Yes. Otherwise, enter No.

• 3PY - To specify a sick pay indicator, enter 1.  Otherwise, please leave blank. (1.0 numeric)
  Note:  You can maintain up to three types and amounts for box 14.

• Desc - Displays the description associated with the amount in box 14.
  Tip:  This description is maintained during W-2 Box Tables.

• Amount - Enter the amount associated with box 14. (7.2 numeric)

• - To display state 1 information, click State 1.
  Or, to display state 2 information, click State 2.

• State Abbrev - Displays the state abbreviation associated with the state assigned to the employee.

• State 1 Tax ID - Enter the state tax identification number. (up to 11 characters)

• St Wages - The accumulated dollar amount for the employee's state wages displays, but can be edited if needed. (7.2 Numeric)

• St Tax WH - The accumulated dollar amount withheld for the employee's state taxes displays, but can be edited if needed. (7.2 numeric)

• LOC Wages - The accumulated dollar amount for the employee's local wages displays, but can be edited if needed. (7.2 numeric)

• LOC Tax W/H - The accumulated dollar amount withheld for the employee's local taxes displays, but can be edited if needed. (7.2 numeric)

• Locality - The name of the locality for local withholding tax displays, but can be edited if needed. (up to 7 characters)

To update the new or changed information, click Save or press [ENTER].  Keyboard shortcut:  [ALT + s]

CAUTION:  To avoid losing data, you must save new or changed information.

Deleting a W-2

1.  Click highlight the desired employee W-2 or to select multiple W-2s check the select box for the desired employees.

2.  Press [Delete] or click Delete .  Delete becomes active when employees are selected.

3.  At the Delete confirmation, click Yes to delete or click No to cancel deleting.

Employee Overtime Wages Report

The Overtime report shows overtime pay for employees, which is now reported in box 14 on W-2s. The report shows total, base and extra overtime amounts for each employee. The base is calculated by multiplying overtime hours by regular pay rate. The extra overtime is calculated by subtracting base from total.  The report can be set to page break on employee number so each employee may be given the report showing how the amount on the W-2 was calculated.

Note:  This report can also be found at Reporting --> Employee --> Overtime Report.

To run the Overtime report, click Overtime Report  and the following screen displays.

The report is set to sort by employee number, but it can be changed using the report writer tools. 

After selecting Print or Print View the following options display.

Confirm the year and check Totals Only if you only want to report totals and not the details.

Overtime Report Example:

Printing W-2s

To print the employee W-2 forms, click Print .  You can print the employee W-2s as many times as necessary and you have the option of printing an individual employee W-2, if needed.

Notes:  

• NDS recommends that you print the W-2s on plain paper to review and verify the accuracy of the w-2 information before printing them on the actual forms.

• To reprint an individual W-2, select the employee W-2 in the grid and click Print.  Then follow the printing directions here.

Print W-2 Forms Window Example:

Sort By

To specify the first sort sequence, click a choice in the drop-down list.

Notes:  

• To print copy A of W-2 forms for submitting paper copies to the IRS, select Federal copy A forms as the 1st Sort Sequence and employee name as the Sort by sort.

• If sort by is blank, the W-2s print in random order.

Then Sort By

To specify the second sort option, click a choice in the drop-down list.

If restart, last good control #

If your W-2s stopped printing unexpectedly, perhaps because of a printer jam, you can restart it.

• If this is not a restart, then leave this box blank.

• If this is a restart, enter the last good employee number that printed.

Only new or edited W-2s

To only print the employee W-2s that are new or edited since the last print, click to check this box.

To print all employee W-2s, leave this box blank.

Form A (red copy for IRS)

To print copies of form A, which is the red copy for the IRS, check this box.  Social security numbers are fully printed on form A.

Mask SS (XXX-XX-1234)

To truncate the display of the employee social security number on the W-2s, check this box.

To display the full employee social security number on all copies of the W-2s, leave this box unchecked.

To begin printing, click Print , or press [ENTER].  Keyboard shortcut:  [ALT + p]

Or, to print to the screen, click Print View .

Or, to escape from the print routine, click Cancel .

Keyboard shortcut:  [ALT + c]

Print W-3

Use W-3 Print to print the summary totals for your W-2s.  You can use this function if you are submitting paper W-2s.  To start, click Print W-3 and the following screen displays.

Note:  You only need to print W-3 if you submit paper W-2s to the IRS.

Creating a W-2 Export File

To create the employee W-2 file for electronic submission to the Social Security Administration use the W-2 Export function.  While all employers are eligible to submit W-2s electronically, filers with 10 or more information returns in a calendar year are required to file electronically.  To create the export file, click Export .

 Important:

• For reconciliation purposes, it is important that you print the W-2 File Report that is available at the end.  The totals on the W-2 File report should match the W-2 totals accumulated during W-2 printing.  To see a report sample, click here.

• If the W-2 file is returned by the government because of errors, you must make the necessary corrections using the Edit function, run the Export again and re-send the file.  If you re-submit the file, you must check Resubmit and maintain the Wage File Identifier provided by the Social Security Administration.  For more information, please contact NDS Support at 800-649-7754.

• The W-2 Export file does not include employees with no earnings or withholdings to report.

• Employers are required by law to maintain at least the previous four years electronic W-2 files.  After sending your W-2 file, it is important that you rename your file to include the year.  Make sure to save copies of each applicable year on some type of removable media such as, a tape, disk or save copies at a location that is backed up regularly.

W-2 Electronic Filing Window Example:

Destination ID

Enter the defined destination ID that was created during W-2 Export Destination.  The destination ID specifies the characteristics of the file and the location of the W-2 Export file.

Note:  To search for a destination ID, click Search or press [CTRL + f].

Destination File

The Destination file associated with the destination ID displays.  (up to 80 characters)

Note:  To look for another destination file, click Browse or press [CTRL + b].

To run the routine, click Export, or press [ENTER].

Keyboard shortcut:  [ALT + e]

After you click, Export the W-2 Export File window displays:

Resubmit

Leave this box unchecked if this is the first time the W-2 Magnetic file is being submitted for the year

If you are re-submitting the file, check Resubmit and then enter the wage file identifier provided by the Social Security Administration.

Note:  Generally, if the W-2 Magnetic file was returned because of errors, you must make the necessary corrections using Edit Forms.  Then, you can run the Magnetic File routine again and re-send the file.

Resub Wage File Identifier (WFID)

If you are re-submitting the Magnetic file and you checked Resubmit,enter the wage file identifier that you received from the SSA when the previous W-2 Magnetic file was returned unprocessed by the SSA.

Note:  This field is only active, if you selected Resubmit above.

Income Tax WH by Third Party Payer

If income tax was withheld for a third party payer, enter the amount.  

Otherwise, leave blank.(7.2 numeric)

Tip:  This amount is submitted with the totals.

Fed
Fed and State
Single State Abbr

To specify the information to include in the file, click a choice:

• Federal Only  - Creates the file for the federal government only

• Federal and State - Creates the file for the federal government and all applicable states

• Single State Abbreviation - Creates the file for the federal government and the specified state

Notes:  

• If all of your employees are from the same state, select Fed & State.  

• If you are reporting employees in multiple states and a state requires filing separately, select Single State Abbreviation.  For example, Maine requires that no other state information be included in the file sent to them.  If there are employees from both Maine and New Hampshire, you will create a file for ME and export it, then create a file for New Hampshire and export it.  The employee state is determined by the state code maintained during Employee Maintenance.

• To maintain a copy of the federal file without any state information, select Federal Only.

Single State Abbr

If you selected Single State Abbreviation, enter the 2-character postal service state abbreviation for the state information to include in the Magnetic file. (2 characters)

Note:  This field is only active, if Single State Abbreviation is selected.

To run the routine, click Proceed or press [ENTER].  Keyboard shortcut:  [ALT + p]

W-2 Export File Processing Window

Displays information pertaining to the W-2 Export process to guide you.  When the export is finished, print the W-2 Magnetic File report by choosing the options below.  

 Important: The status displays Process Ended when complete.  

You can print, view to screen or save the W-2 Magnetic file report by choosing one of these options:

• To print the report, click Print .

• To view the report to the screen, click View Report .

• Or, to save a copy of the report and Export processing messages, click Save as Text File

• Note:  NDS recommends that you print the report and compare the totals with the W-2 totals.  If the totals do not match, please contact NDS Support at 1-800-649-7754 for assistance.

• To close the routine when the routine is finished, click Close .  Keyboard shortcut:  [ALT + c]

AccuWage Testing

The Social Security Administration (SSA) offers a free software call AccuWage that you can use to test the employee W-2 information for errors that may cause the W-2 Electronic file to be returned unprocessed.  You can download the software and then run the program.  It will read the W-2 Magnetic file and list any errors that it detects.

Notes:  

• If the AccuWage program finds errors with your W-2 information you can make the necessary corrections using the Edit Forms. Then, you can re-run the Export function to recreate the W-2 File and then retest the file using AccuWage.

• Check with the Social Security Administration each year to see if you need to download the latest version of the software.

To test your W-2 file, do:

1.  Go to https://www.ssa.gov/employer/.

2.  Click Business Services Online.

3.  Login with your user name and password.

4.  Then, follow the AccuWage directions found at this address:
https://www.ssa.gov/employer/accuwage/helpGuideAccuWageOnline.pdf

5.  AccuWage checks the W-2 file and lists any errors it detects.

6.  If AccuWage lists errors, make the necessary corrections using Edit Forms.  Then, re-run the Export function and retest the file using AccuWage.

7.  Repeat the step above until the AccuWage test runs without finding errors with the W-2 information.  Then, the W-2 file is ready to be submitted electronically to the Social Security Administration!

Submitting W-2 Electronically to SSA

The Social Security Administration (SSA) encourages employers to file the employee W-2 information electronically on the SSA website.  To submit your W-2 file electronically, please read the following information and refer to the information supplied by the SSA or visit their website at https://www.ssa.gov/employer.

Important:  

• To access the SSA Business Services Online (BSO) and upload your W-2 file electronically, you must first obtain a user ID and password.  To obtain a user ID and password:

• Access the website at https://ssa.gov/bso.  Under the employers section click Create an Account and follow the steps for registering.

• Or, call 1-800-772-6270 to register and get a user ID and password.

• You must change your password at least once every 365 days to keep your user ID from expiring.  If you obtained a user ID to file electronically you must change your password this year to keep your user ID active.

To transmit the electronic employee W-2 file that is created during W-2 Processing Export, do:

1.  Connect to the BSO using this address:  https://ssa.gov/bso.

2.  Click Sign In.

3.  Enter your User ID and Password.

4.  Follow their steps to upload your file.