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Electronic W-2s Overview

What Is W-2 Electronic Filing?

W-2 electronic filing (EFW2 format) is a method for submitting W-2 wage information electronically to the Social Security Administration (SSA). This filing option saves time and money compared to paper filing, and is often mandatory for employers with a large number of employees.

Note: SSA renamed the "Magnetic Media" format to "EFW2" (Electronic Filing of W-2s). ProPay's menu still uses the "Magnetic Media" label, but the file format is the same EFW2 specification.

Key Benefits

  • Time savings - Faster than preparing and mailing paper forms
  • Cost savings - Eliminates printing and postage costs
  • Accuracy - File validation catches errors before submission
  • Convenience - File for multiple clients in one submission
  • Compliance - Required for employers exceeding employee thresholds
  • Faster processing - Electronic files are processed more quickly by SSA

How ProPay Supports Electronic Filing

ProPay creates W-2 files in the SSA's MMREF-1 format, which includes:

  • All employee wage information required by SSA
  • Federal tax withholding data
  • State wage and withholding information (RS record)
  • Employer identification and contact information

Filing Requirements

Mandatory Filing Threshold

Electronic filing may be mandatory if you exceed a certain number of employees. Check current SSA requirements for the specific threshold.

Registration Requirements

Before filing electronically, you must:

  1. Register with SSA for Business Services Online access
  2. Obtain a PIN and password
  3. Have a valid Employer Identification Number (EIN)

The Electronic Filing Process

Step 1: Prepare

  • Ensure all employee information is accurate and complete
  • Register with SSA for electronic filing access
  • Download AccuWage validation software

Step 2: Create

  • Use ProPay to generate W-2 files in MMREF-1 format
  • Files are saved to your \PAYSOFT\PROPAY26 folder

Step 3: Validate

  • Test files using SSA's AccuWage software
  • Review error reports and make corrections as needed
  • Regenerate files until validation is clean

Step 4: Submit

  • Log in to SSA Business Services Online
  • Upload the validated wage file
  • Print confirmation receipt for records

Step 5: Verify

  • Monitor for SSA acceptance or rejection notifications
  • Keep confirmation receipts for compliance records

What Information is Filed?

The W-2 electronic file contains:

Employee Information

  • Social Security number
  • Full name and address
  • Wages, tips, and other compensation
  • Federal income tax withheld
  • Social Security and Medicare wages and taxes

State Information (RS Record)

  • State wages subject to withholding
  • State tax withheld
  • State ID numbers for employer
  • Local tax information (if applicable)

Employer Information

  • Employer Identification Number (EIN)
  • Business name and address
  • Contact information
  • Business name control code

State Filing Coordination

Many states have agreements with the federal government to exchange W-2 information. This means filing with SSA may fulfill your state filing requirement. However:

  • Always verify your specific state's requirements
  • Some states may require additional reporting
  • The RS record in the federal file contains state data

Important Dates

  • Filing deadline: January 31st annually
  • Recommended timing: Wait 2-3 weeks after year-end before filing to allow for any last-minute adjustments

File Validation

AccuWage Online is SSA's web-based validation tool: https://www.ssa.gov/employer/accuwage/

AccuWage Online verifies your file format and data integrity before submission to minimize rejections.

Note: SSA discontinued the desktop version of AccuWage. AccuWage Online is now the only supported option.

Common Issues to Avoid

  • Missing or invalid Social Security numbers
  • Incomplete employee addresses (missing zip codes)
  • Incorrect employer identification information
  • Filing too early (before year-end adjustments are complete)
  • Not validating files with AccuWage before submission

Related Topics

Additional Resources

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