If the PrW2 table has records in it for that Year you'll be asked if you want to generate new W2 data or use that existing W2 data. Choosing to generate new W2 data will generate new data from the Employee YearToDate table for the Year you specify.
Year
Fiscal Year
Employee
All means there is no restriction.
Selected means only Employees in your Employee List. To review or change your Employee List click the Select button.