SEC. 2. REQUIREMENTS FOR — Internal Revenue Bulletin 2000-21

SUBSTITUTE FORMS FURNISHED TO EMPLOYEES (COPIES B, C, AND 2 OF FORMS W-2)

.01 All employers (including those who file on magnetic media or electronically) must furnish employees with at least two copies of the Forms W-2 (three or more for employees required to file a state, city, or local income tax return). The dimensions of these copies (Copies B, C, and 2), but not Copy A, may be expanded from the dimensions of the official form to allow space for conveying additional information, including additional entries required for Boxes 13 or 14, such as withholding from pay for health insurance, union dues, bonds, or charity. 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 the 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, and 2), the size of these boxes may be adjusted. (However, see the minimum sizes for certain boxes, below). This may permit the employer to eliminate other statements or notices that would otherwise be furnished to employees.

.05 Two official Forms W-2 (Copy A) or one official Form W-3 is contained on a single page that is 7 inches wide (exclusive of any snap-stubs) by 11 inches deep. The form identifying control number for the official forms (7 inches wide) is “22222” (5 digits) for Form W-2 and “33333” (5 digits) for Form W-3. The top margin for the 2000 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 1999. Margins must be free of all printing. No printing should appear anywhere near the Form ID control number (33333 or 22222). For Forms W-2, Copy A, the combination width of Box a, “Control number,” and the box containing the form identifying number (22222) must always be 2.0 inches. For Form W-3, the combined width of these boxes must always be 2.2 inches.

NOTE: All form identifying numbers must be printed in non-reflective black ink, using OCR-A font, printed 10 characters per inch.

.06 The depth of the individual scannable image on a page must be the same as that on the IRS printed forms. For Form W-2, the depth is 4.92 inches (see Exhibit A). The scannable image depth of the Form W-3 on a page must be 4.47 inches (see Exhibit B). .07 The words “Do Not Cut, Fold, Staple, or Separate Forms on This Page” must be printed twice in Red OCR dropout Flint Ink between the two Forms W-2 on Copy A only (see Exhibit A). Perfora- tions are required on all copies (except Copy A) to enable the separation of in- dividual forms. Continuous pinfeed Copy A forms must be separated at the page perforation into individual 11” deep pages before submission to the SSA. The pinfeed strips must also be removed. However, the two W-2 docu- ments contained on the 11” deep page must not be separated.

.08 Box 13 Copy A, Form W-2, do not enter more than three codes in this box. If more than three items need to be reported in box 13, use a separate Forms W2 to report the additional items (see Mul- tiple forms in the 2000 Instructions for Forms W-2 and W-3 ). Do not report the same Federal tax data to the SSA on more than one Copy A, Form W-2.

.09 The words “For Privacy Act and Paperwork Reduction Act Notice, see separate instructions,” must be printed in red OCR drop-out Flint Ink on Forms W-2, Copy A (see Exhibit A for format and location). The Forms W-2 and W-3 instructions contain the Pri- vacy Act Notification previously shown on the Form W-3.

.10 The Office of Management and Budget (OMB) Number must be printed on each ply of Forms W-2 and on W-3 (see Exhibits A and B for format and location).

.11 The instructions on the official Form W-3, must be printed in their entirety on all substitute Forms W-3 (see Exhibit B).

Household employers filing Forms W- 2 for household employees should send the forms to the same address listed in the instructions.

Note: Household employers, even those with only one household em- ployee, must file a Form W-3 with Form W-2. On Form W-3 mark the “Hshld Emp.” box in Box b.

.12 Privately printed continuous substitute Form 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. Continuous pinfeed Copy A forms must be separated at the page perforation prior to submitting them to the SSA. Two Copy A forms are contained on one page. The two copies must remain together on the page. Only the pages are to be separated (burst). Perforations are required between all the other individual copies on a page (Copies 1, B, C, 2, and D) included in the set.

.13 The back of a substitute Forms W2, Copy A, and Form W-3 must be free of all printing.

.14 Spot carbons are NOT permitted for Copy A of Forms W-2. 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, only if the following standards are met:

Only chemically backed paper is acceptable for Copy A.
Chemically transferred images must be black in color.

2000–21 I.R.B. 1021 May 22, 2000

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.

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

(a) 2.67 inches deep by 5.0 inches wide.

(b) Horizontal or vertical format is permitted. NOTE: These maximum and minimum size specifications are for the 2000 only and may change in 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 the SSA, is specified in Part B, section 1.05 above. .02 The paper for all copies must be white. The substitute Copy B (or its equal), which employees 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 employee must be at least 9 pound paper (basis 17 x 22-500). .03 Interleaved carbon and chemical transfer paper for employee 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.

.04 The following requirements govern the private printing of employee copies of Forms W-2. All substitutes must be a form, that contains boxes, box numbers, and box titles that, when applicable, match the IRS printed form. The employee copy of Forms W-2 (Copy C) must contain the note “This information is being fur- nished to the Internal Revenue Service. If you are required to file a tax return, a negligence penalty or other sanction may be imposed on you if this income is tax- able and you fail to report it. ” The placement, numbering, and size of certain boxes (the “core” information) is specified as follows:

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, Box 4 - Social security tax withheld, Box 5 - Medicare wages and tips, and Box 6 - Medicare tax withheld. NOTE: Railroad employees may not be subject to social security coverage but are subject to Railroad Retirement Tax Act (RRTA) Tier 1 and Tier 2 coverage. Railroad employers covered by RRTA Tier 1 and Tier 2 must report taxes withheld in box 14 of Form(s) W-2 and mark checkbox “CT-1” within box b of Form W-3. The “core” boxes must be printed in the exact order shown 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.

The block of core data (boxes 1 through 6) must be placed in the upper right of the form. Substitute employee copies of Form(s) W-2 that 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 F). 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, or 2) 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.
Boxes 1 through 6 each must be a minimum of 1 3/8 inches wide and 1/4 inch deep.

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 identification number may be in

Other required boxes:

Employer identification number (EIN),
Employer’s name, address, and ZIP

code,

Employee’s social security number, and
Employee’s name, address, and ZIP

cluded 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.

The Tax Year (2000) must be clearly printed (in non-reflective black ink) 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 W2. The use of 24 pt. OCR-A font is rec- ommended but not required.
If applicable, box 7, “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 2point rule (see Exhibit E) or highlighted in some manner to distinguish these boxes.
If box 9 for “Advance EIC” payment (Advance Earned Income Credit) 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.
If box 8 “Allocated tips” are being reported for an employee (or class of employees that are being provided Forms W2), it is recommended (but not required) that this box also be outlined in bold 2point rule or highlighted on Copy B. However, if allocated tips are not being reported, this box may be omitted by printers.
Employers who are required to withhold and report state income tax information are required to include the following boxes on substitute Forms W-2:

I.D. no. Box 17 - State wages, tips, etc. Box 18 - State income tax. 10. Employers who are required to withhold and report local income tax information are required to include the following boxes on substitute Forms W-2:

Box 19 - Locality name Box 20 - Local wages, tips, etc. Box 21 - Local income tax. 11. If state or local tax information is required, this information is also consid

Box 16 - State and Employer’s state

May 22, 2000 1022 2000–21 I.R.B.

ered “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.

Other boxes on the IRS printed form (boxes 7 through 15) need not appear on substitute Forms W-2 provided to employees unless an employer 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 payment (box 9), the form could be printed without those boxes. However, if the employer provided amounts for (box 10) dependent care benefits those amounts would be required to be reported separately and shown in a box labeled “Dependent care benefits” as on the IRS printed form and the exhibits in this revenue procedure.
Employers may provide multiple entries in box 13, but each entry must use the same code as assigned by the IRS for that type of item. (See the “Reference Guide for Box 13 Codes” in the 2000 Instructions for Forms W-2 and W-3.) For example, employers reporting elective deferrals to a section 401(k) plan must enter in box 13 “D” and not “A”, even though it is the first or only item to go in this box. Use the codes shown with the dollar amount. Employers may enter more than three codes in box 13 of Copies 1, 2, B, C, and D of Forms W-2. Do not report in box 13 any items that are not listed as Codes A-T in the 2000 Instructions for Forms W-2.
For codes D,E,F,G,H, and S, if any elective deferrals, salary reduction amounts, or non-elective contributions to a section 457(b) plan during the year are make-up amounts under the Uniformed Services Employment and Reemploy- ment Rights Act of 1994 (USERRA) for a prior year, you must enter the prior year contributions separately. You must enter the code, the year, and the amount. For example, elective deferrals under USERRA to a section 401(k) plan are reported in box 13 as follows: D 1999 2250.00, D 1998 1250.00. The 2000 contribution does not require a year designation; enter it as D 7000.00.
If you are a military employer and provide your employee with basic housing, subsistence allowances, and combat zone compensation, report the amount in box 13, Form W-2, using code Q .
Employer contributions to an employee’s Medical Savings Accounts (MSA), must be reported in box 13, Form W-2, using code R .
An employee elective contribution to a salary reduction SIMPLE retirement account must be included in box 13, Form W-2, using code S . However, if the amount is contributed to a SIMPLE retirement that is part of a section 401(k) arrangement, that amount must be reported in box 13, Form W-2, using code D .
Amounts paid or expenses incurred on behalf of an employee for qualified adoption expenses must be reported in box 13, Form W-2, using code T .
Employers may use box 14 for any other information they wish to give their employee. Each item must be labeled. Examples are union dues, health insurance premiums deducted, nontaxable income, voluntary after-tax contributions, or educational assistance payments.
If you are reporting prior year payments contributions under USERRA (see item 13 above), you may report box 14 makeup amounts for non elective employer contributions, voluntary after-tax contributions, required employee contributions, and employer matching contributions. Report such amounts separately for each year.
If the employer has employees who are subject to any of the five categories/check boxes within box 15, the entire box 15 (ballot box) is required to be reported with the proper check mark designation. For example, if an employer provides a pension plan, box 15 must be reported and check marked for pension plan designation.

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

All copies of Form W-2 must clearly show the form number, the form title, and the tax year prominently displayed together in one area of the form. 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.
If the substitute forms are not labled as to the disposition of the copies, then written notification must be provided to each employee 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.

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 EMPLOYEES RECORDS.” It is recommended (but not required) that this be located on the lower left of Form W-2. “Copy 2 To Be Filed with Employee’s State, City, or Local Income Tax Return”.

Instructions similar to those contained on the back of Copies B and C of the official Form W-2 must be provided to each employee. Employers may modify or delete certain information in these instructions (such as modification for employees of railroads to cover Railroad Retirement Tier 1 and Tier 2 compensation and taxes). Employers are allowed to delete instructions that do not apply to the employee. For example, if none of the employees have dependent care benefits (box 10), the employer 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 Code D and its instructions.
You must notify employees who have no income tax withheld that they may be able to claim a tax refund because of the earned income credit (EIC). You will meet this notification requirement if you issue the official IRS Form W-2 with the EIC notice on the back of the copy (Copy B), or a substitute Form W-2 with the same statement. You may also meet the requirement by providing a substitute Form W-2 without the EIC notice and No- tice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC), or your own statement that contains the same wording. You also may change the font on Copy C (back page only) so that

2000–21 I.R.B. 1023 May 22, 2000

.01 Except as provided below, if magnetic or electronic mediais not used for filing with the 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 employer with the SSA must carry the designation “Copy A.” NOTE : Magnetic media/electronic filers do not submit paper Copy A ofForms W-2 or Form W-3 to SSA. TIB-4 specifications (and MMREF-1 specifications (if not filed electronically)) require a Form 6559 transmittal for magnetic media filers of Forms W-2. MMREF-1 specifications do not require Form 6559 if filed electronically and the PIN registration process is completed annually.

Privately printed substitute forms are not required to contain a copy to be retained by employers (Copy D). However, employers must be prepared to verify or duplicate this information if it is requested by the IRS or the SSA. Paper filers that do not keep Copy D should be able to generate a Facsimile of Copy A in case of loss.
Except as provided in the arrangement of the official assemblies, additional copies that may be prepared by employersshall not be placed ahead of the copy “FOR EMPLOYEE’S RECORDS,” on Form W-2 (Copy C).
Instructions similar to those contained on the back of Copies B and C of the official form must be provided to each employee. These instructions may be printed on the back of the substitute Copies B and C or may be provided to employees on a separate statement. Do not print these instructions on the back of Copy 1 or 2 that is to be filed with the employee’s state or local income tax return.

.02 All privately printed Forms W-2 (Copy A) and W-3 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. The tax year must be printed in non-reflective black ink using 24-point OCR-A font on (Copy A), of Forms W-2, and Form W-3. The form titles for Forms W-2 (Copy A) and W-3 respectively, e.g., “Wage and Tax Statements” and “Transmittal of Wage and Tax Statements” must be

the EIC notification and W-2 instructions may fit entirely on the back of Copy C. For more information about notification requirements, see Notice 1015 (formerly Pub. 1325), Have You Told Your Employees About the Earned Income Credit (EIC)?.

NOTE: Printers are cautioned that the rules set forth here (Part B., Sec. 2) apply to employee copies (Copies B, C, and 2) only. Paper filers who send Copy A of Form W-2 to the SSA must follow the requirements in Parts B, Sec. 1 and Sec. 3, for those paper submissions.