Labor Employer Reporting Instructions

Part VI - Reports Related to Service and Compensation 

Chapter 5: Form W-2, Wage and Tax Statement and

 Form W-3, Transmittal of Wage and Tax Statements

1

Where and When to File the W-2/W-3

 

The W-2/W-3 forms are Internal Revenue Service (IRS) forms that are filed with the SSA. The 

IRS receives this information from the SSA for federal tax data purposes. 

Employers must file Forms W-2 and W-3 by the last day of February each year. In addition, Form 

6559, Transmitter Report and Summary of Magnetic Media, is filed for magnetic reports of Forms 

W-2. Instructions for completion are on the back of the form. Instructions for filing magnetic media 

W-2 reports are issued by SSA in its publication “Magnetic Media Reporting” which can be found 

on their web site at www.ssa.gov/employer/pub.htm. If you submit Form W-2 data on magnetic 

media, do not submit the same W-2 data to SSA on paper forms. 

Duplicate Earnings 

Duplicate posted earnings are annual earnings that are erroneously posted as social security wages 

on an employee's record at SSA from the W-2 data and correctly posted on the corresponding 

employee record at the RRB from Form BA-3a, Annual report of Creditable Compensation. 

Duplicate earnings overstate an employee's lifetime earnings record, thus creating the potential for 

a benefit overpayment when a railroad retirement or social security benefit is paid to that 

individual. 

Correct completion of Forms W-2/W-3 is important in preventing duplicate earnings and correctly 

crediting an employee's earnings record. 

How to Avoid Duplicate Earnings 

The key concept in preventing duplicate earnings is to correctly identify the type of employment 

on Form W-3 for the accompanying W-2 data. It is important that employers covered under the 

RRA mark the correct box in the “Kind of Payer” block of the Form W-3. “CT-1” is the only box 

which should be marked. For magnetic media reports, railroad employees should be reported with 

an “X” in the Type Of Employment (TOE) field of the code E record. 

Whether reporting by paper or magnetic media, railroad employees should not have their railroad 

retirement tax reported as social security tax, nor their railroad earnings reported as social security 

wages. Dollar amounts reported on Forms W-2 should balance with those on Form W-3. 

Common Error 

A common error for railroad employers is to enter the Medicare tax amounts withheld in the 

“Medicare tax withheld” block. This Medicare box is for employees covered under the SSA. If the 

Medicare box is completed, SSA looks for corresponding social security taxes. Because railroad 

employers do not make entries for social security wages, this creates a discrepancy which must be 

resolved. 
Labor Employer Reporting Instructions

Part VI - Reports Related to Service and Compensation 

Chapter 5: Form W-2, Wage and Tax Statement and

 Form W-3, Transmittal of Wage and Tax Statements

2

Proper Completion of W-2/W-3 

In accordance with the SSA instructions for completion of Form W-2/W-3, employers covered 

under the RRA must complete the forms as follows:

• Mark "CT-1" under "Kind of Payer" on Form W-3. "CT-1" is the only box that should be 

marked. For magnetic media reports, code an "X" in the Type of Employment (TOE) field 

of the code E record;

• On Form W-2, make no entries in boxes 3, 4, 5, and 6. The corresponding boxes on Form 

W-3 should also be blank for RRA covered employees; and

• RRA covered employers must enter the amount of Tier I and Tier II tax withheld in the 

box marked “Other”. You may also include optional information such as Medicare tax, 

Tier I and Tier II compensation in the same box. 

The Forms W-2/W-3 example at the end of this chapter illustrates the correct completion of the 

forms for employees covered under the RRA. 

Segregating Railroad Retirement Employees and Social Security Employees 

If you have employees covered under the SSA by virtue of the segregation of your rail labor union 

business as set forth in Section 202.3 of the RRB's Regulations, separate forms W-2/W-3 should 

be filed for the employees of your separate non-rail labor unit. Issue separate W-2's for employees 

who work in two positions when one is covered by RRA and the other is covered by SSA. 

If you determine your Forms W-2/W-3 contains an error and railroad earnings may have been 

processed as social security wages, contact the local SSA office for advice. 

SSA Magnetic Media Form W-2 

SSA has created, and is continuously updating, a list of Employer Identification Numbers (EIN) 

that belong to employers covered under the RRA. This list is compared to the EIN in the Employer 

record (code E) of each Form W-2 magnetic media report which SSA receives. If a match is made, 

SSA will check to ensure that the report has a type of employment code “X” for railroad and that 

the Employee records (code W) have zeroes in all the social security and Medicare fields. 

This processing is ideal for employers who either have no employees covered under SSA or have 

segregated their rail labor union business as a separate employer with a separate EIN from their 

non-rail labor business. The processing will help ensure that RRA W-2 reports and SSA W-2 

reports are completed and processed correctly. 

Employers who have the same EIN for their segregated rail labor union business and non-rail labor 

business cannot participate in this enhanced processing. Once an EIN has been included in SSA's 
Labor Employer Reporting Instructions

Part VI - Reports Related to Service and Compensation 

Chapter 5: Form W-2, Wage and Tax Statement and

 Form W-3, Transmittal of Wage and Tax Statements

3

program and specified as RRA earnings, SSA wages cannot be reported under this EIN. Employers 

can request SSA to issue separate EINs for rail labor union business and non-rail labor business. 

How to Participate in the Enhancement Processing

Contact a Railroad Retirement Compensation Specialist at (312) 751-4992 for a certification form. 

If you have questions about how the EIN number will be used in the processing at SSA, contact 

SSA at (410) 965-7068. 

Questions about SSA Forms W-2 and W-3 

Representatives from the RRB have no authority to give definitive answers to Forms W-2/W-3 

questions. Questions concerning the completion of Forms W-2/W-3 may be directed to a 

Compensation Reporting specialist at the RRB. However, it may be necessary for them to refer 

you to an IRS or SSA W-2/W-3 Specialist for answers to some questions.