Rev. Proc. 71-18

SECTION 1. PURPOSE.

.01 The purpose of this Revenue Procedure is to provide a unified magnetic tape format for the reporting of wages, earnings and related data to Federal and State agencies. The reports covered by this Revenue Procedure are:

1. Annual Wage and Tax Statements (Form W-2 Copy A).

2. Employer's Quarterly Federal Tax Return (Form 941 Schedule A).

3. Quarterly Reporting to state employment security agencies.

4. Annual Wage and Withholding Tax Reporting to State income tax agencies.

.02 Under the Unified Wage Reporting Plan, an employer would use a single magnetic tape format for the Annual Wage and Tax Statements (Form W-2 Copy A) and Quarterly Earnings Reports (Form 941 Schedule A) to the Federal Government. Optionally, the same format can be used for quarterly reporting to state employment security agencies and annual reports to state income tax agencies.

.03 The Unified Wage Reporting magnetic tape format is intended to provide benefits to the Federal, State, and local governments by the elimination of data conversion, and to employers by enabling a minimization of programming efforts, simplification of payroll procedures, reduction in the number of machine runs, and other advantages. Essentially, a single compilation of data can generate the information needed for all major reporting purposes.

.04 These instructions and requirements pertain only to the reporting of data to the Federal Government.

.05 Although the Unified Wage Reporting magnetic tape format has been approved by the Unemployment Insurance Service of the United States Department of Labor, which is the coordinating agency for the unemployment insurance program, permission to file Unemployment Insurance Wage Reports using this format must be secured individually from each State, since not all States possess the equipment capability to process reports in magnetic tape form. In addition, it should be noted that some States do not require quarterly Unemployment Insurance Wage Reports. Similarly, this format has been reviewed by the National Association of Tax Administrators, but permission to file wage and withholding reports in connection with State or local income taxes utilizing this format must be secured individually from the appropriate state or local income tax authorities.

.06 The attached specifications can be substituted for those contained in Revenue Procedure 69-16 C.B. 1969-2, 288, issued by The Revenue Service and Technical Information Bulletin 3 (TIB 3) issued by the Social Security Administration.

SEC. 2. APPLICATION FOR TAPE REPORTING.

.01 Under the Unified Wage Reporting Program, employers file quarterly earnings reports (Form 941, Schedule A) with the Social Security Administration in the form of magnetic tape. Data relating to Federal Income Tax reporting, which would otherwise be reported on a Form W-2, Copy A, is added to the fourth quarter submission. Upon completion of Social Security Administration processing, a copy of the magnetic tape containing the W-2 data is forwarded to the Internal Revenue Service. Each agency will process tapes in the same manner as tapes submitted separately under Technical Information Bulletin 3, issued by the Social Security Administration or Revenue Procedure 69-16, issued by the Internal Revenue Service.

.02 Magnetic Tape Reporting Applications (Form 4803) for Unified Wage Reporting may be made by employers or by agents acting for single employers or groups of employers. This plan is not restricted to employers with the ability to submit all required reports on magnetic tape. So long as there is no duplication or omission of records, some reports can be on tape and some on paper forms. Employers under an establishment reporting plan approved by the Social Security Administration should submit reports by establishment or groups of establishments rather than consolidating all information into a single report.

.03 Employers or agents desiring to file Unified Wage Reports as outlined herein must send the attached application, or a copy thereof to:

     Social Security Administration

.05 Employers can presume that approval will be granted if the tapes have the following characteristics:

Type of Tape -- 1/2 inch Mylar base, oxide coated.

Recording Density -- 200, 556, 800 or 1600 CPI.

Parity -- Even or Odd.

Recording Code -- 7 channel binary coded decimal, 9 channel ASCII, or 9 channel (EBCDIC) (unpacked mode).

If employers have the capability to prepare several types of tapes, it is preferred that the tapes have these characteristics.

.06 If employers propose to submit tapes not having these characteristics, the Federal Government will attempt to find conversion facilities. Generally, this reporting method will be disapproved only when the Government is unable to obtain facilities to economically convert an employer's tape.

.07 Once authorization to file Unified Wage Reports has been granted, such approval will continue in effect, providing that the requirements of this Revenue Procedure continue to be met. New applications are required, however, if users change to equipment producing tapes requiring conversion, or if they discontinue tape reporting and then decide to resume this method of reporting.

SEC. 3. PROCEDURES.

.01 Instructions for packaging, shipping and mailing of the magnetic tapes to the Federal government will be furnished at the time of authorization.

.02 The original copy of Form W-3, Reconciliation of Income Tax Withheld and Transmittal of Wage and Tax Statements (Forms W-2), and Form 941 should be filed with the appropriate Internal Revenue Service Center. If some of the Forms 941 (Schedule A) and Forms W-2 (Copy A) are submitted on magnetic tape, the Forms 941 and W-3 should reflect totals from both paper and tape. The paper documents should be submitted with the Form 941 each quarter and Form W-3 for the 4th quarter. These should be accompanied by a statement that remaining returns will be submitted in the form of magnetic tape under the Unified Wage Reporting program. A copy of the statement should also accompany the tape shipment.

.03 Magnetic tapes submitted under the Unified Wage Reporting program will be submitted to the Social Security Administration. The submission of a Unified Wage Reporting tape in the fourth quarter with the Social Security Administration will also satisfy the filing requirement for the Form W-2 (Copy A) with Internal Revenue Service.

.04 The original tapes submitted by employers will normally be returned by the Social Security Administration within 45 days.

.05 The dates prescribed for filing paper Form W-2 (Copy A) and Form 941 (Schedule A) will apply to Unified Wage Reporting. If an extension for filing is required, the transmitter should request permission from the Social Security Administration.

.05 No deviations from these specifications are allowed for Social Security Administration or the Revenue Service data positions. However, positions identified as blank and/or optional may be used as desired. The attention of employers who cannot comply with these specifications is directed to the following related magnetic tape reporting specifications:

a. Rev. Proc. 69-16 Internal Revenue Service

b. TIB 3. Social Security Administration

SEC. 4. CORRECTED RETURNS.

.01 The appropriate paper form should be used if it is necessary to correct employee records originally submitted in the form of magnetic tape. Corrected documents should contain all relevant information so that they completely supersede the data recorded on tape.

.02 Use paper Forms 941C, Statement to Correct Information Previously Reported Under the Federal Insurance Contributions Act, to correct Social Security data submitted on magnetic tape. Use paper Forms W-2 (Copy A) to correct Revenue Service data submitted on magnetic tape. Forward corrected paper documents to the Social Security Administration.

SEC. 5. EFFECT ON PAPER DOCUMENTS.

.01 Employers filing Unified Wage Reports must continue to furnish their employees with the "B" and "C" copies of the government provided W-2 forms or with substitutes which meet the requirements and specifications in Revenue Procedure 68-38, C.B. 1968-2,927.

.02 If only some of the returns are reported to the government on magnetic tape and the remainder are reported on paper forms, "A" copies of the latter must be on the government provided W-2 forms, or on substitutes meeting the requirements and paper specifications in the above cited Revenue Procedure.

.03 The Social Security Administration will provide a listing containing Form 941 (Schedule A) information in the form of a paper copy, 16 mm microfilm, or both, at the request of an employer. Each page heading will contain the Employer's EIN and Establishment Code. Each line entry will contain SSN, Name, Quarterly FICA earnings and the data from the optional Employer Assigned Account Number, if any. Entries will be in the same sequence as on the tape submitted by employers, and will be forwarded to the transmitters.

SEC. 6. DATA ENTRIES.

.01 Employers are expected to make every effort to keep to a minimum records submitted without Social Security numbers, through continued compliance with the requirements set forth in section 31.6109-1 of the Employment Tax Regulations. However, when a number has not been furnished to the employer by the employee, it may be omitted.

.02 An indicator is prescribed to be entered on the tape to denote whether the surname is recorded before or after the given name. The surname can be either first or last but the format must be consistent on the entire reel of tape. A space, period, or comma must separate each segment of a name (a given name, surname, initials, suffixes, etc.).

.03 It is unnecessary for employers to blank out fields containing information required for Federal reporting, in making copies of tapes for submission to states or localities. Similarly it is unnecessary to blank out State or Local information in reporting to the Federal Government. In making reports during the first three quarters, it is unnecessary to blank out information required for annual reporting purposes only, and hence to be incorporated in four quarter tapes. Each agency involved will utilize only the information required for its purposes in connection with the administration of its own tax laws.

.04 Under Unified Wage Reporting, if establishment reporting has been approved, the records should be grouped by "establishment" as defined by the Social Security Administration and/or by Plant or Location Number, as defined under applicable State employment security laws. Thus, there is a possibility that a tape file may contain more than one record relating to an employee from the same employer. Special precautions must be taken by employers to avoid duplication in amounts.

.05 For the first quarter only, employers should provide the Pay Period Employment required by Item 14 (Number of Employees) of Form 941 (Schedule A) either in positions 8-13 of the End of Employer "C" Record on tape or on paper documents to accompany the tape transmittals.

SEC. 7. ADDITIONAL INFORMATION.

Requests for additional copies of this Revenue Procedure, or requests for additional information on tape reporting should be addressed to:

     Social Security Administration

SEC. 8. EFFECT ON OTHER DOCUMENTS.

This Revenue Procedure supplements Revenue Procedure 68-38, C.B. 1968-2, 927 and Technical Information Bulletin 3 issued by the Social Security Administration. Revenue Procedure 69-16, C.B. 1969-2, 288 is modified; Revenue Procedure 70-7, C.B. 1970-1, 421, is superseded.

ATTACHMENT I -- MAGNETIC TAPE SPECIFICATIONS

SECTION 1. GENERAL.

.01 These specifications prescribe the required format and content of the records to be included in the file, but not the methods or equipment to be used in their preparation.

.02 All records (including headers and trailers, if used) must be written at the same density.

.03 The use of header and trailer labels and record marks is optional, insofar as these specifications are concerned for Option A, but the header label must be present for Option B. (See Attachment 1, Section 4.)

SEC. 2. CODES, CONVENTIONS AND DEFINITIONS.

.01 Definitions

b -- Denotes a blank position (Do not enter the letter "b").

Special Character -- Any character that is not a numeral, letter, or blank.

Transmitter -- Person or organization submitting tape files. May be employer or agent of employer.

Record -- A group of related fields of information, treated as a unit.

Blocked Records -- 2 or more records grouped together between inter-record gaps.

Blocking Factor -- Number of records grouped together to form a block. Should be "01" if records are not blocked (Unblocked).

Reel -- A spool of magnetic tape.

Record Mark -- Special character used either to limit the number of characters in a data transfer, or to separate blocked records on tape.

Short Block -- The last block at the end of a file that is less than a full block's length. This may be written as a short block or filled with 9's to fill a block.

Tape Mark -- Special character that is written on tape to signify the physical end of the recording on tape.

EIN -- Employer Identification Number.

SSN -- Social Security Number.

.02 Since magnetic tape reporting is not restricted to employers who possess specific types of equipment, or who utilize any specific systems approach in the preparation of tape files, the functions normally assigned to header and trailer labels and related conventions are provided for as follows:

1. The Transmitter Record ("T" Record) serves the purpose of a header label and identifies the organization which has submitted the tape.

2. The Employer Record ("A" Record) indicates the organization which has paid the employee.

3. The Employee Record ("B" Record) provides for an individual data record.

4. The Intermediate (or Page) Total Record ("J" Record) provides summary data for each group of approximately 100 employee records.

5. The End of Employer Record ("C" Record) indicates that all employee records for an employer have been written and provides control totals from these records.

6. The Supplemental State Income Tax Record ("S" Record) includes additional state or local wage or withholding data beyond that covered in the Employee Record.

7. The End of Transmission Record ("F" Record) indicates that the end of the file has been reached.

SEC. 3. RECORD LENGTH.

.01 The tape records prescribed in these specifications may be blocked or unblocked, subject to the following:

1. A block may not exceed 10 records.

2. If the use of blocked records would result in a short block, the unused portion may be filled with 9's to provide uniform size.

3. Two forms of blocking are acceptable:

(a) Only Employee "B" Records and Supplementary "S" Records are blocked; all other records are unblocked.

(b) All records, except header and trailer labels, if used, are blocked. If so, and if payments from more than one employer are reported on the same tape, the subsequent Employer "A" Record cannot be in the middle of a block, but must be the first record in a block. In such instances the use of a short block is allowable in the last block for an employer. The Employer "A" Record must be the first record in a block unless preceded by a Transmitter "T" Record at the beginning of a reel.

4. All records are of a fixed length of either 160 characters for Federal government reporting only or of 200 characters when state data is included.

SEC. 4. TRANSMITTER RECORD ("T" RECORD).

Identifies the organization which is submitting the tape. Must appear as the first record on the first reel of tape (second record if header labels are used). There are two optional ways the "T" Transmitter Record may be used.

Option A: The "T" Transmitter Record must appear as the first record (after the Header Label) of every reel. The Reel Sequence Number, positions 3 through 5, will be 001 on the first reel and each succeeding reel in the file will be incremented by 1.

Option B: This method is especially intended for users of COBOL. The "T" Transmitter Record must appear as the first record (after the Header Label) of the first reel only and will not be on any other reel. Enter "X" in position 5 of the "T" Transmitter Record to indicate that the reel sequence number is in the Header Label. Enter the high order position of the 3 position reel sequence number on the header label in positions 3 and 4. For example: If the reel sequence number is in positions 20 through 22 on the Header Label, enter 20 in positions 3 and 4 of the "T" Transmitter Record. By using this method, a "T" Transmitter Record is not required as the first record (after the Header Label) of reels subsequent to the first reel, nor is an "A" Employer Record required at the beginning of each reel.

   Tape          Element                Entry or description

Identifies the employer who made the payments on the succeeding Employee Records. A Transmitter may include Employee Records ("B" Records) for more than one employer on a tape reel; however, each group of Employee Records must be preceded by an Employer Record ("A" Record).

A new "A" Record is required for each establishment and each plant or location, when information is to be filed by establishment and/or by plant or location. An "A" Record must be the first record in a block unless preceded by a Transmitter "T" Record at the beginning of a reel. When an employer is filing unemployment insurance reports with more than one State, an "A" Record would also be required preceding the record for each State.

     Tape        Element                Entry or description

SEC. 6. EMPLOYEE RECORD ("B" RECORD).

Contains payment record from individual information returns. All records must be fixed length.

   Tape

1. If state income tax or employment security data is not being reported, the record ends with position 160.

2. When State law requires the reporting of "excess" wages, this will be computed by those states, by subtracting taxable wages (pos. 168-174) from total (or benefit) wages (pos. 160-167).

SEC. 7. SUPPLEMENTAL STATE INCOME TAX RECORD ("S" RECORD)

Contains payment record from individual returns for additional states for one employee. The "S" Record will follow the corresponding "B" Record for this employee or another "S" Record for this employee.

As many Supplementary "S" Records may follow an Employee "B" Record as there are states for the employee in which state income tax data is present.

This record is required only when it is necessary to report to more than one state with respect to one employee.

   Tape

If there are more than one hundred Employee "B" Records following an "A" Record, write this record after each 100 Employee "B" Records and associated "S" Records and after the last "B" Record and associated "S" Record. The Intermediate Record must be followed by a "B" Employee Record; or a "C" End of Employer Record. The "B" or "C" record may be written in the same block as the "J" Intermediate Record, if all records are blocked.

   Tape          Element name           Entry or description

SEC. 9. END OF EMPLOYER RECORD ("C" RECORD).

Write this record after the last Intermediate "J" Record for an employer has been written. A tape reel may contain more than one End of Employer Record if the last Employee Record for more than one employer is written on that reel. Each End of Employer Record must contain a count of employees and totals of each payment amount reported for all Employee "B" Records.

The End of Employer Record must be followed by a new Employer "A" Record or End of Transmission "F" Record. The new Employer Record, however, cannot be written in the same block as the End of Employer Record. A new block must be started with the new Employer Record as the first record. When Employee "B" records for one employer are written on multiple reels, the End of Employer "C" record must contain the count of employees and totals of each payment amount for all Employee "B" Records following the prior Employer "A" Record for this reel and the prior reel(s). For these purposes, each establishment, plant and/or location will be considered a separate employer.

   Tape          Element name           Entry or description

SEC. 10. END OF TRANSMISSION RECORD ("F" RECORD).

Write this record after the last End of Employer ("C" Record) in the file. This record can be followed only by a Tape Mark or Tape Mark and Trailer Label (see Section 2.01).

   Tape        Element name             Entry or description

The following chart shows, by type of file, the record types to be used in the first three, the last three records, and the positions of the "J" and "S" records on a tape reel.

The Intermediate "J" Record contains the "Number of Employees" and "Control Totals" for approximately the previous 100 Employee "B" Records. Do not include Supplementary "S" Records in these totals.

          Option A ("T" Record is First Record on each Reel)

² An Intermediate "J" Record must contain "Number of Employees" and "Control Totals" summarizing approximately the previous 100 Employee "B" Records.

³ The Intermediate "J" Record must contain "Number of Employees" and "Control Totals" for the remainder of the Employee "B" Records before the End of Employer "C" Record is written.

⁴ Must contain "Number of Employees" and "Control Totals" summarizing all Employee "B" Records for this Employer "A" Record on this reel.

             Option B (Reel Number is in the Header Label)

² An Intermediate "J" Record must contain "Number of Employees" and "Control Totals" summarizing approximately the previous 100 Employee "B" Record.

³ The Intermediate "J" Record must contain "Number of Employees" and "Control Totals" for the remainder of the Employee "B" Records before the End of Employer "C" Record is written for the last reel of a file only.

⁴ Must contain "Number of Employees" and "Control Totals" summarizing all Employee "B" Records for the Employer "A" Record previous to these "B" Records.