Rev. Proc. 78-11

Section 1. Purpose

The purpose of the 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, and Form W-2P, Statement for Recipients of Periodic Annuities, Pensions, Retired Pay or IRA Payments (hereinafter referred to as Forms W-2 and W-2P). The IRS provides two Form W-2 formats, a six part and a four part. The official Form W-2P is provided as a six 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. Request 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. If magnetic media are used, payers can design their own statements to be furnished to employees, pensioners, annuitants, recipients of retired pay, and recipients of disability income who are under retirement age (hereafter and where applicable collectively referred to as payees) (See Section 4).

.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 contacting the Regional SSA Magnetic Media Coordinator.

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

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

.01 Paper substitutes which conform 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: ACTS:T:C, 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 and/or W-2P that will be printed.

.02 Forms W-2 and W-2P are subject to annual review and possible changes, thus it is suggested that payers be 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 carbon interleaves.

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

Sec. 4. Requirements for Substitute Forms Furnished to Payees Copies B, C, and 2

.01 All payers, including those filing Copy A using magnetic media, must furnish employees 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, 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 (16 inches if a detachable stub is provided and payees are instructed to detach the added portion, if added to Copy B).

.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 Carbonized, "Chemical transfer paper" and "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.

.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 employee 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 area pertaining to Federal income tax withheld and total wages, tips and other compensation.

.05 Substitute forms for payees should 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. Payees should be advised that substitute wage and tax statements are acceptable for filing with their Federal income tax returns.

Sec. 5. Requirements for Substitute "Privately Printed" Forms W-2 (Copy A) and Forms W-2P (Copy A) 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). The substitute form must be an exact replica of the official repro-proof with respect to layout and contents. The new official repro-proof of Form W-2 will not contain boxes, 5, 6, 8 and 9 since the law no longer requires the reporting of quarterly FICA wages. The deletion of these boxes does not free up the space for employer data nor does it change the number sequence of the remaining boxes. Repro-proof copies provided before the date of this Revenue Procedure are void. Repro-proofs of the new official Form W-2 will be mailed to those already in receipt of the earlier repro-proofs. The dimensions of a substitute form may differ (see Section .05 below) and the printing of the Government Printing Office (GPO) symbol must be deleted (see Section 10 below). The specifications and allowable tolerances for the Copy A of substitute Forms W-2 and W-2P are provided in Exhibits A, B, D, E, F and G respectively.

.02 Color and quality of paper.

Paper for Copy A, 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 Ink

1. On Copy A, 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 Dimensions--Three official Forms W-2 or W-2P/(Copy A) 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 D, E, F and G. The top and right margins must be 1/4 inch plus or minus .0313 and must be free of all printing and the combination width of the Box 1, "Control Number"; the Form Identifying Numbers, '222' or '555' and box 2, "Employees State Number" must always be 31/2 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 numbers must be shown as 22222 for Form W-2 or 55555 for Form W-2P. This number tells the scan equipment used by SSA which information document it is reading, the width size and the position of individual data fields, Exhibits D and F.

(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 shows as 2222 for Form W-2 or 5555 for Form W-2P. 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, Exhibit E and G.

.06 The depth of the individual image on a page 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.

.07 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.

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

.09 Carbonized. "Chemical transfer paper" and "spot carbons" are not permitted. Interleaved carbon must be of good qualify to assure legibility of information on all parts to preclude smudging, and should be black.

.10 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.

Sec. 6. 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 should 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 the 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 and B, both the face and back of Copy C of the official form must appear on the corresponding copies of substitute Forms W-2 and W-2P.

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

.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).

Sec. 7. Instructions for Payers

.01 Only originals or ribbon copies (Copy A) 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 Form W-3, "Transmittal of Income and Tax Statements" (Exhibit C) will continue to be furnished by the IRS for transmitting completed Copy A of Forms W-2 and Forms W-2P to the SSA. The 1978 Form W-3 will require substantially more filled-in data; see Form W-3 Instructions concerning the data fields to be filled in.

.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 spaces 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. The (EIN) assigned by the Internal Revenue Service for income tax withholding purposes must be shown in the block so labeled.

Sec. 8. Reproduction Proofs

Order blanks for reproduction proofs are mailed annually to requestors of record, and on request to other users. Printers and others wishing to obtain reproduction proofs may send their requests to the Commissioner of IRS, Attention: A: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. 9. Effect on Other Documents

Rev. Proc. 75-15, 1975-1 C.B. 671 is superseded.

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