Rev. Proc. 79-21

Section 1. Purpose

The purpose of this Revenue Procedure is to state the requirements of the Internal Revenue Service (IRS) and the Social Security Administration (SSA) relating to substitutes for Form W-2, Wage and Tax Statement, Form W-2P, Statement for Recipients of Periodic Annuities, Pensions, Retired Pay or IRA Payments, and Form W-3, Transmittal of Income and Tax Statements, (hereinafter referred to as Forms W-2, W-2P, and W-3). The IRS provides two Form W-2 sets, a six part and a four part. The official Form W-2P is provided as a six part set. The official Form W-3 is provided as a two part set.

Sec. 2. General Rules for Filing Forms W-2 and W-2P

.01 Employers and payers (hereafter and where applicable collectively referred to as payers) with computer capability are encouraged to use magnetic media for filing Forms W-2 (Copy A) and W-2P (Copy A) with the SSA. Requests for additional information concerning magnetic media filing should be directed to either the Regional IRS Magnetic Media Coordinator or to the Regional SSA Magnetic Media Coordinator. Since many states and localities accept Forms W-2 and W-2P on magnetic media, savings may be obtained if a similar medium is used for filing with both the SSA and state or local tax agencies. Magnetic media users can design their own statements to give to employees, pensioners, annuitants, recipients of retired pay, recipients of IRA (Individual Retirement Account) payments, and recipients of disability income (hereafter and where applicable collectively referred to as payees). Statements designed by payers must comply with the requirements of Section 5 below.

.02 The following Technical Information Bulletins (TIB) contain the specifications and procedures for filing Forms W-2 (Copy A) and W-2P (Copy A) data on magnetic media directly with the SSA.

1. TIB-4a -- Magnetic Tape Reporting. "Submitting Wage and Tax Data to Federal and State Agencies" Form W-2 (Copy A);

2. TIB-4b -- Magnetic Tape Reporting, "Submitting Annuity, Pension, Retired Pay or IRA Payments to the Federal Government on Magnetic Tape" Form W-2P (Copy A);

3. TIB-4c -- Diskette and Disk Cartridge Reporting, "Submitting Wage and Tax Data to the Federal Government on Diskette and Disk Cartridge" Form W-2 (Copy A); and

4. TIB-3 -- Magnetic Tape Reporting for State and Local Employing Entities, Form W-2 (Copy A). Copies of these publications are available at any IRS Service Center; IRS District Office; and SSA, (Bureau of Data Processing, P.O. Box 2317, Baltimore, Maryland 21203); or by contracting the Regional SSA Magnetic Media Coordinator.

.03 Payers not using magnetic media must file Copy A of Form W-2 or Copy A of Form W-2P with SSA on either an official form or a privately printed substitute paper form meeting the specifications shown below.

.04 Payers using magnetic media are cautioned to obtain the most recent Technical Information Bulletins due to possible changes in the specifications and procedures.

Sec. 3. General Rules for Filing Form W-3

.01 Employers and payers (hereafter and where applicable collectively referred to as payers) required to file Forms W-2 or W-2P must transmit Forms W-2 or W-2P with Form W-3.

.02 Payers using magnetic media must transmit magnetic media Forms W-2 or W-2P with Form 4804, Annual Summary and Transmittal of Income, Tax, and Information Statements on Magnetic Media, or a facsimile thereof. SSA will provide Form 4804 to all approved magnetic media filers.

Sec. 4. Paper Substitutes for Forms W-2 (Copy A), W-2P (Copy A), and W-3

.01 Paper substitutes conforming to the specifications contained in this procedure may be privately printed without the prior approval of the IRS. Proposed substitutes not conforming totally to these specifications must be submitted by letter to the Commissioner of the IRS, Attention: TX:R:I, 1111 Constitution Ave., N.W., Washington, DC 20224, for consideration. These requests should contain an explanation of the specific need for the deviations and the number of Forms W-2, W-2P, and/or W-3 printed.

.02 Forms W-2, W-2P, 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 official form for the reporting year may be obtained from any IRS office. The IRS provides only cut sheet sets with no car bon interleaves for Forms W-2, W-2P, and W-3.

.04 Substitute Forms W-2, W-2P, and W-3 transmitted to the SSA should generally contain only data provided to payees and summary data as requested by the form's instructions.

.05 Substitute Forms W-2, W-2P, and W-3 may be redesigned as to the spacing for state and local tax data as long as the vertical and horizontal spacing for all federal payment and data boxes are in compliance with the specifications contained herein. The descriptive information at the bottom of each substitute form may be rearranged. See Exhibit K.

.06 The sizes for the ballot boxes on all Forms W-2 (Copy A), W-2P (Copy A), and W-3 are as follows:

(1) For Forms W-2, ballot boxes must be 8-point boxes.

(2) For Forms W-2P, ballot boxes must be 10-point boxes.

(3) For Forms W-3, ballot boxes must be 10-point boxes.

NOTE: More than 50% of the applicable ballot box must be covered by an "X."

Sec. 5. Requirements for Substitute Forms Furnished to Payees (Copies B, C, and 2 of the Official Six Part Set of Forms W-2 and W-2P)

.01 All payers, including those filing Copy A using magnetic media, must furnish payees with two statements. The dimensions of these copies may be expanded from the dimensions of the official form to allow space for conveying additional information such as withholding from pay for health insurance, union dues, bonds, charity (see Exhibit L-1), etc. This may permit the payer to eliminate other statements or notices which would otherwise be furnished to payees. The maximum allowable dimensions are:

(1) depth should be no more than five inches, and (2) width no more than eight inches.

.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 24-pound paper (basis 17 x 22-1000), while the other copies furnished the payee should be at least 18-pound paper (basis 17 x 22-1000).

.03 Chemical transfer paper is permitted; however, quality must be such as to preclude fading and to allow for copying if necessary by the payee. "Spot carbons" are not permitted. Interleaved carbon must be of good quality to assure legibility of information on all parts, to preclude smudging, and should be black.

NOTE: Chemical transfer paper is permitted for additional payee copies.

.04 Substitute forms for payees need contain only the payment boxes and captions that are applicable (in any desired sequence). Other boxes contained on the official form may be omitted, except that in all cases the payee name, address and social security number must be present. Payment boxes and captions that are applicable must be clearly identified, using where possible the same wording as on the official form. If the form contains additional data (e.g., savings bonds withholding, retirement withholding, payroll savings, etc.), there should be a special highlighting of the areas pertaining to (1) Federal income tax withheld, (2) Total wages, tips, and other compensation, and (3) Advance EIC payment.

.05 Substitute forms for payees must contain the applicable description--(1) the form title, "Wage and Tax Statement," "Copy B, to be filed with employee's Federal tax return," "Copy C, for employee's records" and the designation "Form W-2 Department of the Treasury--Internal Revenue Service," or (2) the form title, "Statement for Recipients of Periodic Annuities, Pensions, Retired Pay, or IRA Payments," "Copy B, File with recipient's Federal tax return," "Copy C, For Recipient's Records," and the designation "Form W-2P Department of the Treasury--Internal Revenue Service." The form number and reference to Department of the Treasury--Internal Revenue Service should be omitted from other copies provided in the set. Such substitutes are acceptable to the Service when attached to the payee's income tax return and properly designated as "Copy B". Payees should be advised that substitute wage and tax statements are acceptable for filing with their Federal income tax returns. (This advice can be printed on the front or back of either Copy B or C.)

.06 Examples of acceptable substitute Forms W-2 to be Furnished to Payees--Copies B, C, and 2) are provided in Exhibit L. Other substitutes meeting the requirements of this section may also be acceptable.

Sec. 6. Requirements for Substitute "Privately Printed" Forms W-2 (Copy A), Forms W-2P (Copy A), and Forms W-3 Payers Submit to the SSA

.01 Payers may file privately printed substitute Forms W-2 and W-2P with the SSA (hereafter referred to as a substitute Copy A). Payers may file privately printed substitute Forms W-3 with the SSA (hereafter referred to as a substitute W-3). The substitute form must be an exact replica of the official repro-proof with respect to layout and contents. Chemical transfer paper and "spot carbons" are not permitted for Copy A or for Form W-3 filed with SSA. The dimensions of a substitute form may differ (see Section 6.05 below) and the printing of the Government Printing Office (GPO) symbol must be deleted (see Section 6.12 below). The specifications and allowable tolerances for the Copy A of substitute Forms W-2 and W-2P are provided in Exhibits A, B, C, E, F, G, and H respectively. The specifications and allowable tolerances for W-3 are provided in Exhibits D, I, and J.

NOTE: Payers filing Forms W-2 or W-2P that are narrower than 8 inches wide must file Forms W-3 that are of the same width as the Forms W-2 or W-2P (e.g., 71/2" width Form W-3 with 71/2" width Forms W-2 and W-2P).

.02 Color and quality of paper. Paper for Copy A and for Form W-3, (cut sheets and continuous pin-fed forms) to be filed with the SSA, must be: White 100% bleached chemical wood, optical character recognition (OCR) bond produced in accordance with the following specifications:

NOTE: Reclaimed fiber in any percentage is permitted, provided the requirements of this standard are met.

 1. Acidity: pH value, average, not less than _______________ 4.5 Bond

                                Red Iink

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

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

.05 Dimension -- Three official Forms W-2, W-2P/(Copy A) or one official Form W-3 are contained on a single page which is 8 inches wide (exclusive of any snap-stubs) by 11 inches deep.

The width of privately printed substitute pages must be 7 inches, 71/2 inches, or 8 inches exclusive of any left or right snap-stubs, or pin-feed holes, although adherence to the size of the official page is preferred. If an 8 inch form is produced, the image must be an exact copy of the official repro-proof. If the width of the substitute page is reduced, the width of specified fields on the substitute page must be reduced in accordance with Exhibits E, F, G, H, I and J. The top and right margins must be 1/4 (or .25) inch plus or minus .0313 and must be free of all printing. For Forms W-2 and W-2P, the combination width of the Box 1, "Control Number", the Form Identifying Number, and box 2, "Employer's State Number", must always be 31/2 inches; for Forms W-3, the combination must always be 3.35 inches.

(a) When the width of Copy A is reduced to 7 inches, exclusive of any left or right snap-stubs or pin-feed holes, the form identifying number must be shown as 22222 for Form W-2, 55555 for Form W-2P, or 33333 for Form W-3. This number tells the scan equipment used by SSA which information document it is reading, the width size and the position of individual data field (see Exhibits E, G, and I).

(b) When the width of Copy A is reduced to 71/2 inches, exclusive of any left or right snap-stubs or pin-feed holes, the form identifying numbers must be shown as 2222 for Form W-2, 5555 for Form W-2P, or 3333 for Form W-3. This number tells the scan equipment used by the SSA which information document it is reading, the width size and the position of individual data fields (see Exhibits F, H, and J).

.06 The depth of the individual image on a page (for Forms W-2 and W-2P) must be the same (32/3 inches) as that of the official repro-proof. It is permissible to increase the space between the individual forms on a page by 1/2 inch, provided the total depth of a single page does not exceed 12 inches; the depth of the Form W-3 on a page must be 3.44 inches.

.07 The words "Do Not Cut or Separate Forms on This Page" must be printed in red OCR dropout ink between the three Forms W-2 or W-2P (Copy A) (see Exhibits A, B, and C) and must also be present on 7 inch and 71/2 inch wide Substitute Forms W-2 or W-2P. Perforations are required on all copies (except Copy A) to enable the separation of individual forms.

.08 The words "Please return this entire page" must be printed on all Forms W-3 (see Exhibit D) whether Forms W-3 are 8 inches wide or 71/2 inches wide or 7 inches wide.

.09 Privately printed continuous substitute Forms W-2 and W-2P (Copy A) must be perforated at each 11" or 12" (3-on) page depth. No perforations are allowed between the 32/3" forms on a single copy page of Copy A.

NOTE: Perforations are required between all the other individual copies (Copy B, C, and D) included in the set.

.10 The back of a substitute Copy A must be free of all printing.

.11 Carbonized. "Chemical transfer paper" and "spot carbons" are not permitted for Copy A of Forms W-2 or W-2P or for Form W-3. Interleaved carbon must be of good quality to assure legibility of information on all parts to preclude smudging, and should be black.

.12 Printer's symbol--The GPO symbol must not be placed on substitute Copy A of Forms W-2 and W-2P. In the place of the GPO symbol, the Employer Identification Number (EIN) of the forms printer must be printed in the bottom margin on the face of each individual sheet of Copy A. In addition, the EIN of the forms printer must be printed on the face of the Form W-3 which is filed with SSA.

.13 All printers of substitute or privately printed Forms W-2, W-2P, or W-3 are requested to provide 3 copies of each version of each form to the SSA, P.O. Box 2317, Baltimore, Maryland 21235. Paper substitutes conforming to the specifications contained in this procedure may be sent to SSA directly. Paper substitutes requiring IRS consideration and approval should be sent to SSA only after IRS approval has been granted.

Sec. 7. Additional Instructions

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

1 Copy D for Employer or Payer. It is not required that privately printed substitute forms contain a copy to be retained by payers although payers must be prepared to verify or duplicate this information if it is requested by the IRS or SSA.

2 Additional Copies. Except as provided in the arrangement of the official assemblies, additional copies which may be prepared by payers shall not be placed ahead of the copy "For employee's records," Copy C (Forms W-2) or "For Recipient's Records," Copy C (Form W-2P). All copies of the form must be clearly labeled to indicate the purpose for which intended.

.02 Instructions on Forms W-2 and W-2P--Instructions similar to those contained on the face of Copies A, B, and Copy C of the official form must appear on the corresponding copies of substitute Forms W-2 and W-2P. The social security (FICA) rates applicable for the current tax year must appear either on the front or the back of the copy (Copy C) retained by the employee. The IRS recommends that the other text on the back of the official form Copy C be provided to the employee.

.03 All privately printed Forms W-2 and W-2P (Copy A) must have the tax year printed on the bottom face of each, using identical type as that of the official format.

.04 The substitute Copy B (or its equal), which the payee is instructed to attach to his Federal income tax return, must be at least 24-pound paper (basis 17 x 22-1000), while the other copies furnished the payee should be at least 18-pound paper (basis 17 x 22-1000).

.05 The OCR bond Form W-3 that is filed with SSA must have no printing on the reverse side.

.06 Instructions for Form W-3--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 printed on the bottom face of each Form W-3, using identical type as that of the official format.

.08 The copy of the substitute Form W-3 which contains the instructions and is to be retained by the employer should be at least 18-pound paper (basis 17 x 22-1000).

Sec. 8. Instructions for Payers

.01 Only originals or ribbon copies of Copy A of Forms W-2 and W-2P and of Form W-3 may be filed. Carbon copies and photocopies are not acceptable.

.02 The Service requests the cooperation of the payers in typing or machine printing whenever possible and in providing good quality data entries on the forms, i.e., using black ribbon, inserting data in the middle of blocks, well separated from other printing and guidelines, and taking any other measures that will guarantee clear, sharp images. However, payers are not required to acquire equipment solely for the purpose of preparing these forms.

.03 The Employer Identification Number (EIN) may be entered anywhere in Box 3 along with the Payer's name and address of Copy A of Forms W-2 and W-2P. (If this is done, the EIN need not be entered in Box 5 of either Form W-2 or W-2P.) For Form W-3, the EIN must be entered where prescribed by the Form W-3 Instructions.

.04 State agencies--The amounts of wages paid and employee contributions withheld under a State-Federal Agreement, entered into pursuant to Section 218 of the Social Security Act, may be shown in the space on Form W-2 for Federal Insurance Contribution Act Wages and Employee Tax. In such cases, the identification number assigned by the Social Security Administration to the state (prefixed by 69) should be shown in the employer name and address area block.

.05 The preparation and filing instructions for Forms W-2 and W-2P are contained in the 1979 Instructions for Forms W-2 and W-2P. The preparation and filing instructions for Form W-3 are contained as part of the 1979 Form W-3 snap set assembly.

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

(1) Form identifying number (e.g., 222, 555);

(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.

.07 Payers are encouraged to use IRS-supplied labels for affixing to all Forms W-3 filed with SSA.

Sec. 9. Reproduction Proofs

Order blanks for reproduction proofs are mailed annually to requestors of record, and on request to other users. Reproduction copies of Forms W-2, W-2P, and W-3 each consists of two parts. Part 1 is line art, i.e., type and ink. Part 2 is a black solid which should be photographically screened by the user to allow a 10%-20% dot pattern when printed in red OCR dropout ink. In some cases where the production method requires the use of something other than a standard dot pattern, the printed value of part 2 must still be 10%-20%. Printers and others wishing to obtain reproduction proofs may send their requests to the Commissioner of IRS, Attention: RM:FM:P, 1111 Constitution Avenue, N.W., Washington, D.C. 20224. A charge of $1 per page will be made for each reproduction proof regardless of page size. Invoices will be mailed after orders have been filled.

Sec. 10. Effect on Other Documents

Rev. Proc. 78-11, 1978-1 C.B. 579, is superseded. Announcement 78-167, 1978-46 I.R.B. 24, is incorporated.

[Editor's note: Exhibits A through P illustrate physical specifications of the forms discussed. These illustrations are not suitable for electronic reproduction.]