IRS PUBLISHES GUIDELINES FOR SUBSTITUTE W-2 AND W-3 FORMS.

Rev. Proc. 94-39

PART A. GENERAL

SECTION 1. PURPOSE

.01 The purpose of this revenue procedure is to provide the general rules for filing and to state the requirements of the Internal Revenue Service (IRS) and the Social Security Administration (SSA) for reproducing paper substitutes for Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, for amounts paid during the 1994 calendar year. The information reported on Forms W-2 and W-3 is required to establish tax liability for employees and their eligibility for Social Security and Medicare benefits.

.02 Forms W-2 and W-3 have only minor changes for 1994. Please see "Nature of Changes" (Section 2, below) and the exhibits at the end of this revenue procedure for changes to the Form W-2 and W-3.

.03 For the purpose of this revenue procedure, a substitute form is one that is not printed by IRS. A SUBSTITUTE FORM W-2 OR W-3 MUST CONFORM TO THE SPECIFICATIONS IN THIS REVENUE PROCEDURE TO BE ACCEPTABLE TO THE IRS. Preparers should also refer to the separate instructions for Forms W-2 and the instructions on Form W-3 for details on how to complete these forms. See Part B, Sec. 1.03, for information on ordering the official IRS forms and instructions. See Part B, Sec. 2, for requirements for substitute forms furnished to employees.

.04 IRS has instituted a centralized call site to answer questions related to information returns (Forms W-2, W-3, 1099, etc.). The call-site phone number is 304-263-8700 (not a toll-free number). The number for Telecommunication Device for the Deaf (TDD) is 304-267-3367 (not a toll-free number).

.05 IRS has established a personal computer based Information Reporting Program Bulletin Board System (IRP-BBS) at the Martinsburg Computing Center (IRS/MCC). This system provides access to the forms and publications relating to information returns, news of the latest changes, the ability to receive answers to specific questions, access to shareware, and other features. The IRP-BBS is available for public use and can be reached by dialing 304-263-2749 (not a toll- free number). The IRP-BBS is compatible with most modems. For more information concerning this system, call IRS/MCC at 304-263-8700 (not a toll-free number).

.06 Employers are reminded that under Section 6722 of the Internal Revenue Code (IRC) they can be assessed a penalty of $50 per Form W-2 that is not furnished to an employee on a form acceptable to the IRS (up to $100,000). To be acceptable to IRS, the Form W-2 must be either the "official" form or a substitute form with the core data placed exactly as specified in Part B., Section 2.04 of this Revenue Procedure. No IRS office is authorized to allow deviations from this Revenue Procedure.

.07 This revenue procedure supersedes Rev. Proc. 93-18, 1993-1 C.B. 509. (Reprinted as Publication 1141, Revised 3-93).

SECTION 2. NATURE OF CHANGES

.01 The text and exhibits were updated for tax year 1994.

.02 A change in the IRS address to which a letter should be submitted when uncertain of any specification set forth herein has been added. See Part B, Section 3.01, below, for the new address.

.03 Changes have been added to cover employees who are not subject to Social Security but are subject to Railroad Retirement Tax Tier I and II. See Part B Section 2 for the suggested layout for Railroad employees who fall under this category.

.04 The Catalog Number, shown on the 1994 Form W-2 as "Cat. No. 10134D" is used for IRS distribution purposes and should not be printed on substitute Forms W-3 or W-2 (Copy A or employee copies).

.05 Information has been added recommending that if employment ends before December 31, 1994, that the payee receive a copy of their W-2 any time after employment ends. Also, if the employee requests their Form W-2 it should be given within 30 days of the request or the final wage payment, whichever is later. See Part A, Section 3.06, below for new information. If the business closes, Copy "A" of the Form W-2 may be filed with the Social Security Administration as soon as they are completed. It is not necessary to wait until January 1 of the following year to file them.

Note: There are currently proposed regulations that will require W-2 issuance 30 days after the employer ceases business being considered by the Treasury Department.

.06 The reference to the Department of the Treasury -- Internal Revenue Service should be included on all copies of Form W-2. It is recommended (but not required) that this information be located on the bottom right of Form W-2.

.07 All copies of Forms W-2 must clearly show the form number, the form title, and the TAX YEAR. It is recommended (but not required) that the title of Form W-2 "Wage and Tax Statement" be located on the bottom left of Form W-2, that the designation "Form W- 2" be located on the lower left of Form W-2, and that the tax year be located to the right of the form title on the lower left of the Form W-2.

.08 Labeled Forms W-2 MUST contain the following descriptions: Copy A, for the Social Security Administration (unless Form W-2 reports will be filed on magnetic media), Copy B, to be filed with the employee's Federal tax return, and Copy C, for the employee's records. It is recommended (but not required) that this be located on the lower left of Form W-2, below the Form W-2 designation.

.09 The OMB number has been relocated to the top of the official Form W-2. The placement of this number is now consistent with the other Form W-2 series. It is recommended (but not required) that this information be located on the top right of Form W-2.

.10 The "void" box (formerly located at the top of Form W-2 between the OMB number and the control number) has been removed from all copies of Form W-2 except Copy A.

.11 On Form W-3 the brackets for the placement of the name, address, and EIN label have been relocated. Please see Exhibit B for the new location of the label bracket for Form W-3.

.12 On Form W-3 box b, Kind of Payer, the label 941/941E changed to 941. Form 941E is obsolete.

.13 The size of box c, Total number of statements, and box d, Establishment number were changed. Box e, Employer's identification number, was extended to the same size as box f, Employers name.

.14 Recognition Equipment, Inc. has been renamed. The new name is Recognition International, Inc. The phone number for Recognition International, Inc. has changed. The new number is (214) 579-6927. This is a voice mail number. If a message is left, the analyst will return your call.

.15 On Form W-2 the width of Box 20 has been increased one print position to accommodate larger wages. Box 19 has decreased by one print position to accomplish this.

.16 The printer of Forms W-2 and W-3 are required to print their Employer Identification Number (EIN) to the left of the designation "Department of the Treasury" on each type form.

.17 All paper Forms W-2 and W-3 must be sent to SSA's Wilkes- Barre Data Operations Center for processing. Forms sent to any other location will be returned to the filer.

.18 Various editorial changes were made.

SECTION 3. GENERAL RULES FOR FILING FORMS W-2

.01 Employers and payers (hereafter and where applicable collectively referred to as payers) MUST use magnetic media for filing with SSA if the payer will prepare and file 250 or more 1994 Forms W-2 (Copy A). This requirement applies unless:

1 The payer can establish that filing on magnetic media will result in undue hardship, AND

2 The payer is granted a waiver of the requirement by IRS.

To request a waiver of the magnetic media filing requirement, for the current tax year only, submit Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media, to:

     If by Postal Service:

Form 8508 may be obtained by calling 1-800-829-3676. Form 8508 also may be obtained directly from the IRS Martinsburg Computing Center (IRS/MCC) at the above address or by calling 304-263-8700 (not a toll-free number). The number for Telecommunication Device for the Deaf (TDD) is 304-267-3367 (not a toll-free number). It is recommended that completed requests for waivers (Form 8508) be submitted at least 45 days before but no later than the due date of the return (see Sec. 3.06, below). The requestor will receive an approval or denial letter from IRS, but must allow at least 30 days for IRS to respond. If you have any questions concerning Form 8508, contact IRS/MCC at the address or phone number shown above. Payers who do not comply with the magnetic media filing requirements for Form W-2 and who are not granted a waiver may be subject to certain penalties. Since many states and local governments accept Forms W-2 data on magnetic media, savings may be obtained if magnetic media is used for filing with both SSA and state or local governments. You must contact each individual state or local taxing agency to receive approval and make arrangements to file on magnetic media.

PAYERS WHO FILE FORM W-2 INFORMATION ON MAGNETIC MEDIA WITH SSA MUST NOT SEND THE SAME DATA TO SSA ON PAPER FORMS W-2. This would result in duplicate reporting and may subject the filer to penalties imposed by the IRS.

.02 Payers can design their own statements to give to employees. This applies to both payers who file with SSA either on magnetic media or paper Forms W-2, Copy A. Payers who file paper Copy A, Form W-2, with SSA are required to use a substitute Copy A that exactly meets the specifications set forth in this revenue procedure (or use the official IRS printed form) for submission to SSA. Payee statements designed by payers MUST comply with the requirements shown in Parts B and C, below.

NOTE: Copy A must not be filed on paper with SSA when the same Form W-2 information is filed on magnetic media. Therefore, magnetic media filers who use the official IRS printed form or any other pre-printed form are advised not to print Copy A, or to discard a printed Copy A, to prevent duplicate information from being submitted to SSA.

.03 TIB-4, Magnetic Media Reporting, Submitting Annual W-2 Copy A Information to the Social Security Administration, (SSA Pub. No. 42-007, revised Oct., 1993) contains the specifications and procedures for filing Form W-2 information on magnetic media with SSA. Specifications for both tape and diskette reporting for Forms W- 2 are included in this Technical Instructions Bulletin (TIB4).

.04 TIB-4 may be obtained by writing to:

     Social Security Administration

.05 Payers not using magnetic media must file a paper Copy A of Form W-2 with SSA on either the IRS printed official form or a privately printed substitute paper form that exactly meets the specifications shown in Parts B and C.

.06 1994 Forms W-2, whether filed on magnetic media or paper, must be submitted to SSA on or before February 28, 1995. In addition, the payee copies must be furnished to the employee on or before January 31, 1995. If employment ends before December 31, 1994, the payee may be furnished their copy any time after employment ends. If the payee requests Form W-2, furnish him or her the completed copies within 30 days of the request or the final wage payment, whichever is later. This requirement is met if the form is properly addressed, mailed, and postmarked on or before the due date. If the business closes, Copy A of the Form W-2 may be filed with the Social Security Administration as soon as they are completed. It is not necessary to wait until after January 1st of the following year to file them. Failure to timely file with SSA or to timely provide the employee copies may subject the payer to penalties. Payers needing additional time to file Form W-2 information (paper or magnetic media) with SSA may request an extension of time to file by submitting Form 8809, Request for Extension of Time to File Information Returns, to the IRS Martinsburg Computing Center (IRS/MCC), at the address (or alternative address) listed in Sec. 3.01, above.

The extension request should be filed as early as possible, but must be post-marked no later than the due date of the forms (February 28, 1995). Forms may be FAXED to the IRS/MCC at (304) 264-5196 (not a toll-free number).

NOTE: APPROVAL OF THE EXTENSION IS NOT AUTOMATIC. Approval or denial is based on administrative criteria and guidelines. The requestor will receive an approval or denial letter from IRS and must allow at least 30 days for IRS to respond. Form 8809 may be obtained by calling 1-800-829-3676, or by contacting IRS/MCC (See the address and phone number in Sec. 3.01, above).

.07 If requesting extensions of time for more than 10 payers, IRS encourages filers to submit the request on tape, tape cartridge, 5-1/4 or 3-1/2-inch diskette, or electronically through the Information Reporting Program Bulletin Board System (IRP-BBS). Transmitters who submit requests for multiple payers will receive one approval letter with an attached list of payers covered under that approval. Publication 1220, Specifications for Filing Forms 1098, 1099, 5498 and W-2G Electronically or on Magnetic Media, provides information on how to file requests for extensions of time on tape, diskette, or electronically.

NOTE: Approval of extensions to file (disclosure of return information) will be made only to those third party filers and/or transmitters for whom IRS has received disclosure authorization.

SECTION 4. GENERAL RULES FOR FILING FORM W-3

.01 Employers and payers (hereafter and where applicable collectively referred to as payers) submitting Forms W-2 (Copy A) on PAPER to SSA must transmit Forms W-2 with Form W-3.

.02 Form W-3 must be the same width (i.e., 7 inches, 7.5 inches, or 8 inches) as the Forms W-2 filed.

.03 Form W-3 should only be used to transmit paper Forms W-2 (Copy A). Magnetic media filers do not file Form W-3. Payers using magnetic media must transmit Form W-2 data with Form 6559, Transmitter Report and Summary of Magnetic Media, (and Form 6559-A, Continuation Sheet for Form 6559, if necessary). These forms may also be obtained by calling either your SSA MMC (see listing in Appendix A) or by calling IRS at 1-800-829-3676.

PART B. REQUIREMENTS FOR FILING PAPER SUBSTITUTES

SECTION 1. REQUIREMENTS FOR SUBSTITUTE "PRIVATELY PRINTED" FORMS SUBMITTED TO SSA (FORMS W-2, COPY A, AND FORMS W-3)

.01 Payers may file privately printed substitute Forms W-2 and W-3 with SSA. The substitute form must be an exact replica of the IRS printed form (or official reproduction proof) with respect to layout and contents because it will be read by machine. The dimensions of a substitute form may differ as far as width (see Sec. 1.05, below). The Government Printing Office (GPO) symbol must be deleted (see Sec. 1.16, below). The specifications and allowable tolerances for the Copy A of substitute Forms W-2 are provided later in this Revenue Procedure. See Exhibits A, C, and D for Form W-2 specifications. The specifications and allowable tolerances for Forms W-3 are provided in Exhibits B, E, and F.

NOTE: PRINTERS OF FORMS W-2 THAT ARE WIDER THAN 7 INCHES MUST PROVIDE FORMS W-3 THAT ARE THE SAME WIDTH AS THE FORMS W-2 (I.E., 7-1/2" FORMS W-3 WITH 7-1/2" WIDTH FORMS W-2; 8" WIDTH FORMS W-3 WITH 8" WIDTH FORMS W-2).

.02 Paper for substitute Forms W-2, Copy A, and Form W-3 (cut sheets and continuous pinfeed forms) that are to be filed with SSA must be white 100% bleached chemical wood, 18-20 POUND PAPER ONLY, optical character recognition (OCR) bond produced in accordance with the specifications shown as follows:

 PAPER REQUIREMENTS

.03 All printing for Copy A (of Forms W-2) and Form W-3 will be in red OCR dropout ink, as specified below, except for the form identifying numbers '22222' or '33333' at the top of the form and the descriptive information at the bottom (see Exhibits G and H) that will be printed in non-reflective black ink. All other printing will be in red OCR dropout ink meeting, or comparable to, the specifications in this paragraph. The OCR dropout ink for paper Forms W-2, Copy A, and W-3 is specified as Flint Ink (formerly Sinclair and Valentine) J-6983 red ink or equivalent. This is the same ink that is used for Copy A of the Form 1099 series. The use of this is required for 1994 Forms W-3 and W-2, Copy A.

NOTE: Printing in any other red OCR dropout ink must be cleared by contacting the Recognition International, Inc., P.O. Box 660204, MS- 77, Attn: Forms Designer & Analyst, Dallas, TX 75266 (214-579-6927 -- This is a voice mail number. Leave a message and your call will be returned).

.04 Type must be substantially identical in size and shape with corresponding type on the official form. The form identifying number MUST be printed in black ink using an OCRA font; 10 characters per inch.

1 On Form W-3 and Copy A of Forms W-2, all the perimeter rules must be 1-point (0.014 inch), while all other rules must be one-half point (0.007 inch).

2 Vertical rules must be parallel to the left edge of the form; horizontal rules parallel to the top edge.

.05 Two official Forms W-2 (Copy A), or one official Form W-3 are contained on a single page that is 7 inches wide (exclusive of any snap-stubs) by 11 inches deep. The form identifying number for the official forms (7 inches wide) is '22222' (5 digits) for Form W-2 and '33333' (5 digits) for Form W-3. Although adherence to the size of the official page is preferred, the width of privately printed substitute pages may be 7 inches, 7-1/2 inches, or 8 inches, exclusive of any left or right snap-stubs, or pin-feed holes. If a 7 inch form is produced, the image must be an exact copy of the IRS printed Form W-2. If the width of the substitute page is increased, the width of specified fields on the substitute page must be increased in accordance with Exhibits C, D, E, and F. The top margin for 1994 Forms W-3 and W-2, Copy A is .375 inch (3/8 inch). The right margin must be .15 inch and the left margin .35 inch (plus or minus .0313 inch). The margins are unchanged from 1993. Margins must be free of all printing. For Forms W-2, Copy A, the combination width of Box 1, "Control number", and the box containing the form identifying number (22222) must always be 2.0 inches, for Form W-3 this must always be 2.2 inches.

1 When the width of Form W-2, Copy A, is increased to 8 inches, exclusive of any left or right snap-stubs or pin-feed holes, the form identifying number must be shown as '222' (3 digits) for Form W-2 and '333' (3 digits) for Form W-3. This number tells the scan equipment used by SSA which information document it is reading, the width, and the position of individual data fields (see Exhibits C and E).

2 When the width of Copy A is increased to 7-1/2 inches, exclusive of any left or right snap-stubs or pin-feed holes, the form identifying must be shown as '2222' (4 digits) for Form W-2 and '3333' (4 digits) for Form W-3. This number tells the scan equipment used by SSA which information document it is reading, the width, and the position of individual data fields (see Exhibits D and F).

NOTE: All form identifying numbers are to be printed in black ink, using OCRA font, printed 10 characters per inch.

.06 The depth of the individual image on a page must be the same as that of the IRS printed forms. For Form W-2, the depth is 5.5 inches (see Exhibit A). The depths of the Form W-3 on a page must be 3.37 inches (see Exhibit B). The depths are the same for the 7 inch, 7-1/2 inch, and 8 inch wide forms.

.07 The words "DO NOT CUT OR SEPARATE FORMS ON THIS PAGE" must be printed in red OCR dropout ink between the two Forms W-2 on Copy A only (see Exhibit A), and must also be present on 7-1/2 inch and 8 inch wide substitute Forms W-2. Perforations are required on all copies (except Copy A) to enable the separation of individual forms.

.08 The words "For Paperwork Reduction Act Notice, see separate instructions." MUST be printed on Forms W-2, Copy A, (see Exhibit A for format and location) and MUST also be present on 7-1/2 inch and 8 inch wide substitute Forms W-2.

.09 The Office of Management and Budget (OMB) Number MUST be printed on EACH ply of Form W-2 and W-3 (see Exhibits A and B for format and location) and MUST also be present on 7-1/2 inch and 8 inch wide substitute Forms W-2 or W-3.

.10 The statement "PLEASE RETURN THIS ENTIRE PAGE WITH THE ACCOMPANYING FORMS W-2 TO THE SOCIAL SECURITY ADMINISTRATION, DATA OPERATIONS CENTER, WILKES-BARRE, PA. 18769. HOUSEHOLD EMPLOYERS FILING FORMS W-2 FOR HOUSEHOLD EMPLOYEES SHOULD SEND THE FORMS TO THE SAME ADDRESS SHOWN ABOVE. THE SSA ADDRESSES MUST be printed on Forms W-3 (see Exhibit B), whether Forms W-3 are 7 inches wide, 7-1/2 inches wide, or 8 inches wide.

Note: Beginning with 1994 tax year, all Forms W-2 and W-3 (including forms for household employees) should be sent to SSA's Wilkes-Barre Data Operations Center. Forms W-2 and/or W-3 that are sent to Albuquerque or Salinas will be returned to the filer.

.11 The Paperwork Reduction Act Notice must be printed on Form W-3 (see Exhibit B for format and location), whether Forms W-3 are 7 inches wide, 7-1/2 inches wide, or 8 inches wide.

.12 PRIVATELY PRINTED CONTINUOUS SUBSTITUTE FORMS W-2, COPY A, MUST BE PERFORATED AT EACH 11" PAGE DEPTH. NO PERFORATIONS ARE ALLOWED BETWEEN THE INDIVIDUAL FORMS (5-1/2 inch Forms W-2) ON A SINGLE COPY PAGE OF COPY A. Perforations are required between all the other INDIVIDUAL copies on a page (Copy 1, B, C, 2, and D) included in the set.

.13 The back of a substitute Form W-2, Copy A, and Form W-3 (page 1) must be free of all printing.

.14 Spot carbons are NOT PERMITTED for Copy A of Forms W-2 or for Form W-3. Interleaved carbon should be black and must be of good quality to assure legibility of information on all copies and to preclude smudging.

.15 Chemical transfer paper is permitted for Form W-2, Copy A, and Form W-3 only if the following standards are met:

1 Only CHEMICALLY BACKED paper is acceptable for Copy A.

2 Carbon coated forms ARE NOT permitted. Front and back chemically treated paper cannot be processed properly by machine.

3 Chemically transferred images must be black in color.

.16 The GPO symbol must not be placed on substitute Copy A of Forms W-2.

.17 The Catalog Number, shown on the 1994 Form W-2 as "Cat. No. 10159Y", is used for IRS distribution purposes and should not be printed on substitute forms.

SECTION 2. REQUIREMENTS FOR SUBSTITUTE FORMS FURNISHED TO PAYEES (EMPLOYEES) (COPIES B, C, AND 2 OF FORMS W-2)

.01 All payers (including payers who file on magnetic media and do not file a paper Copy A) must furnish payees with at least two copies of the Forms W-2 (three or more for payees required to file a state, city, or local income tax return). The dimensions of these copies (Copies B, C, etc.) but not copy A, may be expanded from the dimensions of the official form to allow space for conveying additional information, such as additional entries required for Boxes 13 or 14, withholding from pay for health insurance, union dues, bonds, charity, etc. The requirement that a maximum of three items are permitted in Box 13 of Form W-2 applies only to the paper Copy A that is filed with SSA. As long as sufficient space is provided on the substitute employee copies, as many items as needed may be placed in Box 13 or box 14. Also, on these copies (Copies B, C, etc.), the size of these boxes may be adjusted. (However, see the minimum sizes for certain boxes, below). This may permit the payer to eliminate other statements or notices that would otherwise be furnished to payees.

1 The MAXIMUM allowable dimensions for employee copies of Forms W-2 are:

(a) depth should be no more than 6.5 inches;

(b) width should be no more than 8.5 inches.

2 The MINIMUM allowable dimensions for employee copies of Forms W-2 are:

(a) 2.76 inches by 5.0 inches.

(b) horizontal or vertical format is permitted.

NOTE: These minimum and maximum size specifications are for 1994 only and may change for future years. The maximum width of 8.5 inches is for employee copies of Form W-2 only. The width of the paper Copy A, submitted to SSA, is specified in section 3.1 above.

.02 The paper for all copies should be white. The substitute Copy B (or its equal), that payees are instructed to attach to their Federal income tax return, must be at least 12 pound paper (basis 17 X 22-500), while the other copies furnished the payee should be at least 9-pound paper (basis 17 X 22-500).

.03 Interleaved carbon and chemical transfer paper for payee copies must meet the following standards:

1 All copies must be CLEARLY LEGIBLE;

2 All copies must have the capability to be photocopied; and

3 Fading must not be of such a degree as to preclude legibility and the ability to photocopy.

In general, black chemical transfer inks are preferred; other colors are permitted only if the above standards are met. "Spot carbons" are NOT permitted (See Sec. 1.15, above, for standards for chemical transfer paper for Copy A.)

.04 The following requirements govern the private printing of employee copies of Forms W-2. All substitutes must be a form, which contains boxes, box numbers, and box titles that, where applicable, match the IRS printed form. The placement, numbering, and size of certain boxes (the "core" information) is specified as follows:

1 The items and box numbers that constitute the core data are:

Box 1 -- Wages, tips, other compensation,

Box 2 -- Federal income tax withheld,

Box 3 -- Social Security Wages/Railroad Retirement Compensation,

Box 4 -- Social Security tax withheld/Railroad Retirement Tax Withheld.

Box 5 -- Medicare wages and tips/Railroad Retirement Tips, and

Box 6 -- Medicare tax withheld/Railroad Retirement Tax Withheld.

NOTE: Railroad employees may not be subject to Social Security coverage but are subject to Railroad Retirement Tax Tier I and II coverage. Railroad Compensation payers may make the above modifications to Forms W-2.

The "core" boxes MUST be printed in the exact order as on the IRS printed form (see the Exhibits at the end of this revenue procedure). Boxes 1 and 2 must be next to each other, with Boxes 3 and 4 below on the next line, and Boxes 5 and 6 on the line below Boxes 3 and 4.

2 The block of core data (Boxes 1 through 6) must be placed in the upper right of the form. Substitute employee copies of Form W-2, which are printed using a vertical format with dimensions smaller than the IRS printed form, may have the core data entirely on the top of the form (see Exhibit J). In no instance will boxes or other information be permitted to the right of the core data. Standard margins or a small amount of other blank space may appear to the top or right of this data. The form title, number, or copy (Copy B, C, etc.) may be at the top of the form. Also, a reversed or blocked-out area to accommodate a postal permit number or other postal considerations is permitted at the upper right of the form.

3 Boxes 1 through 6 must each be a minimum of 1-3/8 inches wide and 1/4 inch deep.

4 Other required boxes:

o Employer identification number (EIN),

o Employer's name, address, and ZIP code,

o Employee's Social Security number, and

o Employee's name, address, and ZIP code.

These items are required to be present on the form and must be in boxes similar to those on the IRS printed form. However, they may be placed in any location, other than the top or upper right. The lettering system used on the IRS printed form ("a" through "f") need not be used. The employer's EIN may be included in the box for the employer's name and address. If this is done, a separate box for the EIN is not required. The Control number box (Box "a" on the IRS printed form) is not required.

5 The Tax Year (1994) MUST be clearly printed on all copies of substitute Forms W-2. It is recommended (but not required) that this information be located to the right of the form title on the lower left of the Form W-2.

6 If applicable, Social Security tips MUST be shown separately from Social Security wages. A separate box is not required unless Social Security tips are to be reported.

Boxes 1 and 2 on Copy B are required to be outlined in bold 2- point rule (see Exhibit I) or highlighted in some manner to distinguish these boxes.

7 If a box for Advance EIC (Earned Income Credit) payments (Box 9) is present, the box must be outlined in bold 2-point rule or highlighted in some manner to distinguish this box. However, if no amounts are paid for Advance EIC, this box is not required and may be omitted by printers. Do not use Box 9 for any other purpose than reporting Advance EIC payments.

8 If Allocated tips (Box 8) are being reported for the individual employee (or class of employees that are being provided Forms W-2), it is recommended (but not required) that this box also be outlined in bold 2-point rule or highlighted on Copy B. However, if allocated tips are not being reported, this box may be omitted by printers.

9 If Form W-2 contains additional data concerning payroll deductions (e.g., saving bonds withholding, retirement withholding, or payroll savings), there should be a special highlighting of the areas pertaining to Federal income tax withheld; wages, tips, and other compensation; or Advance EIC (Earned Income Credit) payments that are related to those items.

10 Payers who are required to report or withhold state income tax information are required to include the following boxes on substitute Forms W-2:

Box 16 -- State and Employer's state identification (I.D.) number,

Box 17 -- State wages, tips, etc., and

Box 18 -- State income tax withheld.

11 Payers who are required to report or withhold local income tax information are required to include the following boxes on substitute Forms W-2:

Box 19 -- Locality name (this box has been reduced one print position)

Box 20 -- Local wages, tips, etc., (this box has been increased one print position) and

Box 21 -- Local income tax.

12 If state or local tax information is required, this information is also considered "core data." The state and local information MUST be placed at the bottom of the form. See the exhibits at the end of this revenue procedure.

13 Other boxes on the IRS printed form (Boxes 7 through 15) need not appear on substitute Forms W-2 provided to employees UNLESS a payer has that item of information to report to an employee. For example, if an employee did not have Social Security tips (Box 7), Allocated tips (Box 8), or Advance EIC payments (Box 9), the form could be printed without these boxes. However, if the payer had provided amounts for dependent care benefits, those amounts would be required to be reported separately and shown in a box labeled "Box 10, Dependent care benefits," as on the IRS printed form and the exhibits in this revenue procedure.

14 Payers may use other headings for Boxes 13 and 14 as needed. For example, if a payer will only be reporting amounts for a 401(k) type retirement plan in Box 13, the employee copies of Form W-2 may be printed labeling Box 13 as "401(k) Plan." Also, if a payer had two items that may be reported in Box 13, they may divide the box into "Box 13a" and "Box 13b," labeling the boxes as appropriate. This applies only to Boxes 13 and 14."

.05 Substitute forms for payees (Copies B, C, and 2 of Forms W- 2) must meet the following requirements:

1 All copies of Forms W-2 must clearly show the form number, the form title, and the tax year. The title of Form W-2 is "Wage and Tax Statement." It is recommended (but not required) that this be located on the bottom left of Form W-2. The reference to the Department of the Treasury -- Internal Revenue Service must be on all copies of Form W-2 provided to the employee. It is recommended (but not required) that this be located on the bottom right of Form W-2.

2 If the substitute forms are NOT LABELED as to the disposition of the copies, then written notification must be provided to each payee as specified below:

(a) The first copy of the form (Copy B) is filed with the employee's Federal tax return.

(b) The second copy of the form (Copy C) is for the employee's records.

(c) If applicable, the third copy (Copy 2) of the form is filed with the employee's state, city, or local income tax return.

3 If the substitute forms are LABELED, the forms must contain the applicable description:

"Copy B, to be filed with employee's Federal tax return," AND "Copy C, for employee's records," it is recommended (but not required) that this be located on the lower left of Form W-2. The designation "Form W-2, it is recommended (but not required) that this be located on the lower left of Form W-2 and Department of the Treasury -- Internal Revenue Service." it is recommended (but not required) that this be located on lower right of Form W-2.

4 Instructions similar to those contained on the back of Copy C of the official form MUST be provided to each employee. While payers may modify or delete certain information in these instructions, (such as modification for employees of railroad to cover Railroad Retirement Tier I and II Compensation and Taxes) the instructions MUST include the exact language concerning the Earned Income Credit (EIC) as is contained on the official form. Payers are allowed to delete information in these instructions (except the EIC explanation) that do not apply to the employee. For example, if none of the employees of a payer have dependent care benefits (Box 10), the payer may delete the instructions for that item. Also, if an employer will only be reporting amounts for a 401(k) plan in Box 13, those instructions may be modified to cover only Section 401(k) contributions.

NOTE: Printers are cautioned that the rules set forth here (Part B. Sec. 2) apply to employee copies (Copies B, C, etc.) only. Paper filers who send Copy A of Form W-2 to SSA MUST follow the requirements in Part B. Sec. 3.1 above for those paper submissions.

SECTION 3. GENERAL RULES FOR FILING "PAPER SUBSTITUTES" FOR FORMS W-2 AND W-3

.01 Paper substitutes that conform totally to the specifications contained in this revenue procedure may be privately printed without the prior approval of the IRS. SUBSTITUTE FORMS THAT DO NOT CONFORM TOTALLY TO THESE SPECIFICATIONS ARE NOT ACCEPTABLE. This applies to both paper substitutes that are filed with SSA and those that are given to employees. FORMS SHOULD NOT BE SUBMITTED TO IRS OR SSA FOR SPECIFIC APPROVAL. However, if you are uncertain of any specification set forth herein and want that specification clarified, you may submit a letter citing the specification in question, your interpretation of that specification, and an example of how the form would appear if produced using your understanding of the specification to:

     Internal Revenue Service

.02 Forms W-2 and W-3 are subject to annual review and possible change. Payers are cautioned against overstocking supplies of privately printed substitutes.

.03 Copies of the current year, IRS printed Forms W-2 and W-3 and the instructions for these forms may be obtained from most IRS offices or by calling 1-800-829-3676. The IRS provides only cut sheet sets. Reproduction proofs of the official Forms W-2 and W-3 are also available. See Part C, Sec. 4, below, for information on ordering reproduction proofs.

.04 Substitute Forms W-2 and W-3 transmitted to SSA should generally contain only data that is required by the Form W-2, the Form W-2 instructions, and this Revenue Procedure.

.05 Substitute Forms W-2, Copy A, and W-3 are being scanned by Social Security, therefore these boxes must meet the specifications for boxes on Forms W-2 produced by IRS. They must be uniform, as are the federal payment and data boxes. The vertical and horizontal spacing for all federal payment and data boxes on Form W-2 must be in compliance with the specifications contained herein.

.06 All ballot boxes on Forms W-2, Copy A (Box 15), and W-3 (Box "b") must be 8-point boxes.

NOTE: If a box is marked, more than 50% of the applicable ballot box must be covered by an "X." (i.e., 7-1/2" Forms W-3 with 7-1/2" width Forms W-2:8" width Forms W-3 with 8" width Forms W-2).

.07 Copy A of Form W-2 and Form W-3 must have the form producers EIN entered to the left of "Department of Treasury".

PART C. ADDITIONAL INSTRUCTIONS

SECTION 1. INSTRUCTIONS FOR FORMS PRINTERS

.01 Except as provided below, if magnetic media is not used for filing with SSA, the substitute copies of Forms W-2 assembly should be arranged in the same order as the IRS printed Forms W-2. Copy A should be first, followed sequentially by perforated sets (Copies 1, B, C, 2, and D). The substitute form to be filed by the payer with SSA must carry the designation "Copy A."

NOTE: Magnetic media filers do not submit Copy A of Form W-2 or Form W-3. Form 6559 is the transmittal for magnetic media filed Form W-2 data.

1 It is not a requirement that privately printed substitute forms contain a copy to be retained by payers (Copy D). However, payers must be prepared to verify or duplicate this information if it is requested by the IRS or SSA. Paper filers that do not keep Copy D should be able to generate a facsimile of Copy A in case of loss.

2 Except as provided in the arrangement of the official assemblies, additional copies that may be prepared by payers shall not be placed ahead of the copy "For EMPLOYEE'S RECORDS," Form W-2 (Copy C).

3 Instructions similar to those contained on the back of Copy C of the official form MUST be provided to each employee. These instructions may be printed on the back of the substitute Copy C or may be provided to employees on a separate statement. Do not print these instructions on the back of Copy B (filed with the employee's Federal income tax return) or the copy that is to be filed with the employee's state or local returns.

.02 All privately printed Forms W-2 (Copy A) must have the tax year, form number, and form title printed on the bottom face of each form using identical type to that of the official format.

.03 The substitute Form W-2, Copy B, which employees attach to their Federal income tax return, must be at least 12-pound paper (basis 17 X 22-500) while the other copies furnished to payees should be at least 9-pound paper (basis 17 X 22-500).

.04 Employee copies of Forms W-2 (Copies B, C, etc.), including those that are printed on a single sheet of paper, MUST be produced so as to be easily separated by the employee. Perforations between the individual copies that are printed on a single sheet of paper satisfy this requirement.

.05 The Form W-2, Copy A, and the OCR bond Form W-3 that are filed with SSA must have no printing on the reverse side.

.06 Instructions similar to those provided as part of the official form must be provided as part of any substitute Form W-3.

.07 All privately printed Forms W-3 must have the tax year, form number, and form title printed on the bottom face of each substitute Form W-3, using identical type to that of the official format.

.08 The copy of the substitute Form W-3 that contains the instructions and is to be retained by the employer should be at least 18-pound paper (basis 17 X 22-500).

SECTION 2. INSTRUCTIONS FOR PAYERS

.01 Only originals or ribbon copies of Copy A (Forms W-2) and Form W-3 may be filed with SSA. CARBON COPIES AND PHOTOCOPIES ARE NOT ACCEPTABLE.

.02 Payers should type or machine print entries on forms whenever possible and provide good quality data entries by using a high quality type face, inserting data in the middle of blocks that are well separated from other printing and guidelines, and taking any other measures that will guarantee clear, sharp images. The payer must provide a machine scannable form for Copy A. The payer must also provide payee copies (Copies B, C, and 2) that are legible and capable of being photocopied (by the employee).

.03 The Employer Identification Number (EIN) may be entered in the Employer's (payer's) name and address box on Copy A of Forms W-2 (Box "c" on the IRS printed Form W-2). If this is done, the EIN need not be entered in the box provided for the EIN (Box "b" on the IRS printed Form W-2). The EIN must be entered in Box "e", Form W-3.

.04 The payer's name, address, and EIN may be pre-printed.

.05 The optional employer's state number may be pre-printed in the employer's (payer's) name, address, and ZIP code box. If this is done, the Employer's state I.D. Number section in Box 16 of Forms W-2 need not be completed, as long as the applicable state taxing authority does not object. PLEASE CHECK WITH THE APPROPRIATE STATE TAXING AUTHORITY BEFORE DOING THIS.

.06 The preparation and filing instructions for Forms W-2 are contained in the 1994 Instructions for Form W-2. The preparation and filing instructions for Form W-3 are contained as part of the 1994 Form W-3 snap set assembly.

.07 To avoid confusion and questions by payees, payers are encouraged to delete the following items from the employee copies of Forms W-2 that are provided to payees:

1 Form identifying number (e.g., 22222);

2 The words "subtotal" and "void" and their boxes;

3 Any other captions or box number that would not be of any informational use to payees (unless otherwise required).

.08 Payers should use the IRS supplied labels on all Forms W-3 filed with SSA.

SECTION 3. OFFICE OF MANAGEMENT AND BUDGET (OMB) REQUIREMENTS FOR SUBSTITUTE FORMS

.01 Public Law 96-511 requires: (1) OMB approval of IRS tax forms, (2) that each form (all copies) show the OMB approval number and, when appropriate, the form's expiration date, and (3) that the form (or its instructions) state why IRS is collecting the information, how we will use it and whether it must be given to us. The official IRS form (or instructions) will contain this information.

.02 As it applies to substitute IRS forms, this means:

1. All substitute forms (all copies) MUST show the OMB number as it appears on the official IRS printed form (see Exhibits A and B).

2. The OMB number must be in one of the following formats:

                    OMB No. 1545-0008 (preferred),

SECTION 4. REPRODUCTION PROOFS

.01 Order blanks for reproductions proofs (repro-proofs) are mailed annually to requestors of record, and on request to other users. Printers and others wishing to obtain reproduction proofs should call the toll-free number for ordering IRS forms and publications (1-800-829-3676) and ask for Publication 1192, Catalog of Reproducible Forms, Instructions, and Publications, which has order blanks for obtaining reproduction proofs. Written requests for Publication 1192 may be sent to:

     Internal Revenue Service

.03 List of Social Security Administrations Magnetic Media Coordinators is included as Appendix A.

SECTION 5. EFFECT ON OTHER REVENUE PROCEDURES

.01 Rev. Proc. 93-18, 1993-1 C.B. 509 (Reprinted as Publication 1141, Revised 3-93), is superseded.

[Exhibits omitted]