Rev. Rul. 54-226

SECTION 1. PURPOSE.

The purpose of this Revenue Ruling is to prescribe certain requirements governing the private printing of substitutes for Form W-2, for 1954 for the use of State and local Governments, and the use of official Forms W-2 for 1954.

SEC. 2. BACKGROUND.

If the official Form W-2 for 1954, or a substitute therefor which meets the requirements and specifications set forth in Revenue Ruling 54-43, page 225, this Bulletin, is used by an employer to show Federal income tax withholding information in the case of an employee with wages and employee contributions under a State-Federal agreement pursuant to section 218 of the Social Security Act, added by section 106 of the Social Security Act Amendments of 1950, no objection will be interposed by the Internal Revenue Service to the employer entering the amounts of such wages and contributions in the spaces provided for Federal Insurance Contributions Act wages and Federal Insurance Contributions Act employee tax. Before making these entries, however, the employer should determine whether or not such action will be satisfactory to the particular State involved. Objection thereto may be raised in those States which permit an employee to deduct Federal Insurance Contributions Act employee tax in computing his State income tax, but which do not permit a similar deduction for Old-Age and Survivors' Insurance contributions made pursuant to section 218.

SEC. 3. USE OF SUBSTITUTE FORMS.

.01 Employers, with employees covered for Old-Age and Survivors' Insurance purposes by agreement under section 218, who desire to report on Form W-2 not only the required Federal income tax information, but also information concerning employee contributions withheld and wages paid within the meaning of a State-Federal agreement under section 218, may use substitutes for Form W-2 for 1954 without obtaining specific approval of the Internal Revenue Service provided such substitutes meet the requirements stated in Revenue Ruling 54-32, supra , and provided further that the following changes are made:

(1) Substitute `OLD-AGE AND SURVIVORS' INSURANCE UNDER STATE-FEDERAL AGREEMENTS' for the heading, `SOCIAL SECURITY INFORMATION (Federal Insurance Contributions Act)'.

(2) Substitute `Total O.A.S.I. Wages (before payroll deductions) paid in 1954' and `O.A.S.I. employee contributions withheld, if any' for the captions, `Total F.I.C.A. Wages (before payroll deductions) paid in 1954' and `F.I.C.A. employee tax withheld, if any'.

(3) Change the first sentence of the Notice to Employee, on Copy B, to read, `(1) Social Security Wages-If your wages were subject to O.A.S.I. contributions, but are not shown, your O.A.S.I. wages are the same as wages shown under `INCOME TAX INFORMATION', but not more than $3,600.'

(4) Change the first and second sentences of the Notice to Employee, on Copy C, to read, `If your wages were subject to O.A.S.I. contributions, but are not shown, your O.A.S.I. wages are the same as wages shown under `INCOME TAX INFORMATION', but not more than $3,600. Your O.A.S.I. account is credited with wages subject to O.A.S.I. contributions.'

(5) The instructions appearing on `Old-Age and Survivors' omitted. If not omitted, the phrase `Old-Age and Survivors Insurance' shall be substituted for `the Federal Insurance Contributions Act'; `O.A.S.I.' shall be substituted for `F.I.C.A.'; and `employee contribution' shall be substituted for `employee tax' wherever they appear in the instructions.

.02 In cases where State and local Government employees are not covered under the social security program and the taxes under the Federal Insurance Contributions Act do not apply to their wages, the employer may use substitutes for Form W-2 for 1954 without obtaining specific approval of the Internal Revenue Service, provided such substitutes meet the requirements stated in Revenue Ruling 54-32, supra , and provided further that the following changes are made:

(1) The entire block headed `SOCIAL SECURITY INFORMATION (Federal Insurance Contributions Act)' should be deleted.

(2) The first sentence of the Notice to Employee on Copy B, and the first two sentences of such notice on Copy C, should be deleted.

(3) The instructions appearing on the back of Copy A may be omitted. If not omitted, subparagraphs (b) and (c) of paragraph 2 shall be deleted, and subparagraphs (d), (e), and (f) shall be redesignated as (b), (c) and (d).

SEC. 4. EFFECT ON OTHER DOCUMENTS.

This ruling amends Circular 2299, C.B. 1951-2, 194, and Revenue Ruling 54-32, page 225, this Bulletin.