Form W-3 is necessary for what purpose?

Form W-3 serves a specific function in the payroll process. It is a summary form that accompanies forms W-2 when they are submitted to the Social Security Administration (SSA). The primary purpose of Form W-3 is to transmit Copy A of the W-2 forms, which report annual wages and withholding information for each employee. By submitting Form W-3 along with the W-2 forms, employers provide a consolidated report of all employee compensation and taxes withheld, ensuring that the SSA has accurate data for processing and for the establishment of employees' Social Security records.

This function is essential for maintaining the integrity of employee wage records and for ensuring compliance with federal reporting requirements. The W-3 acts as the covering document that verifies the total wages reported on the W-2s and serves as a reconciliation tool for the Social Security Administration. This makes option C the correct response regarding the purpose of Form W-3.