W-3 and 1096 Transmittals are used when you paper file to the IRS/SSA. When paper filing, you need to generate and print a W3/1096 Transmittal form which will be sent along with W2/1099 form(s).
When you are filing electronically these Transmittal forms are sent to the IRS/SSA in an electronic format and will be automatically included with your filing. This is all done in the electronic filing process.