US Internal Revenue Service: p393--2006

8/14/2019 US Internal Revenue Service: p393--2006

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Federal Employment Tax Forms

Department of the TreasuryInternal Revenue Service

What forms and publications will IRS send automatically?IRS will send you either Pub. 15 (Circular E) or Pub. 51 (CircularA) in December. These publications explain your taxresponsibilities as an employer and will provide federal incometax withholding and advance earned income credit paymenttables for 2007. You will also receive employment tax returns foreach quarterly or annual return period:

Information return questions. If you have questions aboutinformation returns (Forms 1096, 1098, 1099, 1042-S, 5498,W-2, W-2G, and W-3), call 1-866-455-7438 (toll free) Mondaythrough Friday, 8:30 a.m. to 4:30 p.m., Eastern time or304-263-8700 (toll call).

Furnish Copies B, C, and 2 of Form W-2 to your employeesby January 31, 2007.

Use Form W-3 to send CopyA of all Forms W-2 to the SSA byFebruary 28, 2007.

Prepare and file Forms W-2 either alphabetically by

employees last names or numerically by employees socialsecurity numbers.

Recordkeeping. Keep copies of Forms W-2 and W-3 and allother employment tax records for at least 4 years.

Publication 393 W-2

W-3

Order Blank Form 7018

Form 940, Employers Annual Federal Unemployment (FUTA)Tax Return

Form 941, Employers QUARTERLY Federal Tax Return

Form 943, Employers Annual Federal Return for AgriculturalEmployees

Note. Your name, address, and employer identification number(EIN) are imprinted on Form W-3 instead of providing thisinformation on a peel-off label. If any of the imprinted informationis incorrect, make corrections on Form W-3.

Electronic filing option for small businesses. Small businessesand practitioners may be able to file a limited number of FormsW-2 electronically. Electronic filing is free, fast, and secure with alater filing deadline (April 2, 2007 versus February 28, 2007 forother filing methods). To register for electronic filing or to getmore information, visit www.socialsecurity.gov/employerandclick on Electronically File Your W-2s.

Internal Revenue ServiceP.O. Box 3737Ogden, UT 84409

Form W-3 has been imprinted with your name, address, andemployer identification number (EIN). Make any corrections onthe form. If you file additional Forms W-3, fill in your name,address, and EIN.

PRSRT STD

Postage and Fees PaidInternal Revenue Service

Official BusinessPenalty for Private Use, $300 Permit No. G-48

Publication 393Cat. No. 11071P

Having employees secure a corrected social security card willallow the SSA to process the information correctly and properlycredit employees social security earnings. It will also help theemployees to correctly report their wages on their income taxreturns.

2006 Federal Employment Tax Forms

How to get forms and publications. To get forms andpublications, see Quick and Easy Access to IRS Tax Help andTax Products on page 2. To place an order foremployer-related products online, accesswww.irs.gov/businesses where you can order forms andpublications for 2006 and 2007. To order 2006 forms andpublications by mail, see Form 7018, Employers Order Blankfor Forms, in this publication.

Social security wage base for 2006. Do not withhold socialsecurity tax after an employee reaches $94,200 in socialsecurity wages for 2006. (There is no limit on the amount of

wages subject to Medicare tax.)

Form 944, Employers ANNUAL Federal Tax Return

Show the correct social security numbers of all employees onForms W-2 and be sure all copies are legible. If any employeesnames changed during the year, encourage the employees to

How to complete Forms W-2 and W-3. When you completeand file your 2006 Form W-2, Wage and Tax Statement(s), and2006 Form W-3, Transmittal of Wage and Tax Statements:

contact their local Social Security Administration (SSA) office andrequest a corrected card.


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Quick and Easy Access to IRS Tax Help and Tax Products

MailInternet

You can access the IRS website24 hours a day, 7 days a week, atwww.irs.govto:

Send your order for tax products to:

You should receive the products within 10 working daysafter the receipt of your order.

CD

Order IRS Publication 1796, IRS TaxProducts CD, to obtain:

Phone

Tax Forms & Publications1-800-829-3676

Purchase the Tax Products CD via the Internet athttp://www.irs.gov/cdorders from the National TechnicalInformation Service (NTIS) or from the Government PrintingOffice (GPO) at http://bookstore.gpo.gov (search for Pub1796) for $25 (no handling fee). Order the CD by phonefrom NTIS at 1-877-CDFORMS (1-877-233-6767) or fromGPO at 1-866-512-1800 for $25 (plus $5 handling fee). Pricesare subject to change.

2006 Refund 1-800-829-4477 or go to www.irs.gov andclick on Where's My Refund?

Availability:First release early January 2007Final release early March 2007 (*includes Historical DVD)

Walk-in

Minimum System Requirements:

Software is provided to view, search, fill-in, and save

forms using the free Adobe Reader. IRS appliesdocument rights to its fillable PDF forms so the forms canbe filled in and saved locally using the free Adobe Reader.Some forms on the CD are intended as information only.These forms may not be filled in and submitted as anofficial IRS form (e.g. Forms W-2, W-3, 1096, 1099, 1098,5303, 5310, 5498, and 5500). Content and technicalspecifications are subject to change. Additionally, this CDdoes not support electronic filing.

Publication 2053-A (Rev. 8-2006)Cat. No. 23267Z


www.irs.gov

Access commercial tax preparation and e-fileservices available FREE to eligible taxpayersCheck the status of your 2006 refundDownload forms, instructions, and publicationsOrder IRS products onlineSearch publications online by topic or keywordSee answers to frequently asked tax questionsFigure your withholding allowances using ourWithholding CalculatorSign up to receive local and national tax newsby emailSend us comments or request help by email

Tax Help/Questions Individuals 1-800-829-1040Business & Specialty Tax 1-800-829-4933TeleTax - 24 hour tax information 1-800-829-4477

(See Instructions 1040, 1040A or 1040EZ for topicnumbers and details.) or go to www.irs.govand click onFrequently Asked Questions

Call to order current forms, instructions and publications,and prior year forms and instructions. You should receiveyour order within 10 working days.

Pick up certain forms, instructions, andpublications at many post offices.

Some grocery stores, copy centers, city and countygovernment offices, credit unions, and office supply storeshave a collection of reproducible tax forms available tophotocopy or print from a CD.

National Distribution CenterP.O. Box 8903Bloomington, IL 61702-8903

The 2006 IRS Tax Products CD can be used with thefollowing operating systems: Windows 2000 (w/ SP 2), XP;Mac OS X v.10.28-10.3. It requires a minimum of 128 MBRAM recommended; and a minimum of 90 MB availablehard drive space. System requires either an IntelPentium processor or PowerPC G3/4/5 processor or theIntel Core Duo. To access the information on the historicalDVD, your computer must have a DVD drive.

Current-year tax forms, instructions, and publicationsPrior-year tax forms, instructions, and publicationsFill-in, print, and save features for most tax forms

Bonus: Historical Tax Products DVD*Tax Map: Electronic research tool and finding aidTax Law: Frequently Asked Questions (FAQs)Tax Topics from the IRS telephone response systemInternal Revenue BulletinsToll-free and e-mail technical support


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OMB No. 15451059

7018Employers Order Blank

Form

(Rev. August 2006)


Item

W-2 C

W-2 G

941 SCH B

W-3

W-3 C

941

1099 B

943 A

1096

1099 A

1099 S

1099 DIV

1099 INT

1099 MISC

1099 LTC

1099 PATR

1099 R

5498

Pub 213

Pub 1494

Quantity

1099 C

945

945 A

W-2 Wage and Tax Statement

Corrected Wage and Tax Statement

Certain Gambling Winnings

Transmittal of Wage and Tax Statements

Transmittal of Corrected Wage and TaxStatements

Report of Tax Liability for Semiweekly

Schedule DepositorsSupporting Statement To CorrectInformation

Agricultural Employers Record ofFederal Tax Liability

Annual Return of Withheld FederalIncome Tax

Annual Record of Federal Tax Liability

Annual Summary and Transmittal ofU.S. Information Returns

Acquisition or Abandonment ofSecured Property

Proceeds From Broker and BarterExchange Transactions

Cancellation of Debt

Dividends and Distributions

Interest Income

Miscellaneous Income

1099 OID

5498 SA

1099 SADistributions From an HSA, ArcherMSA, or Medicare Advantage MSA

Long-Term Care and AcceleratedDeath Benefits

Original Issue DiscountTaxable Distributions Received FromCooperatives

Distributions From Pensions, Annuities,Retirement or Profit-Sharing Plans,IRAs, Insurance Contracts

Proceeds From Real EstateTransactions

IRA Contribution Information

HSA, Archer MSA, or MedicareAdvantage MSA Information

Check Your Withholding

Table for Figuring Amount Exemptfrom Levy on Wages, Salary, and otherIncome--Forms 668-W(c),668-W(c)(DO) and 668-W(ICS)

Title

Place your order now at www.irs.gov/businesses and follow the link to Online Ordering for Information Returns and Employer Returns or print yourname and complete address in the space provided below to receive your order by mail. You can use the SSA website atwww.socialsecurity.gov/employerto create and file electronic fill-in versions of Forms W-2 and W-3. Instructions. Enter the quantity next to theproduct(s) you are ordering. Please order the number of forms needed, not the number of sheets. Note: None of the items on the order blankare available from the IRS in a continuous-feed version. All forms that require multiple copies are carbonized. You will automatically receive oneinstruction with any form ordered. Your product(s) will be shipped as they become available and may arrive in multiple shipments.

Employers Annual Federal Tax Returnfor Agricultural Employees

943

Quantity Item Title

941 C

Employers Quarterly Federal TaxReturn

1098 E Student Loan Interest Statement

Use This Portion For2007 Forms Only

Mailing Address

W-4

W-4 P

CityW-4 S

W-5Foreign Country

(2007 Revision)

QUANTITY

Company Name

International Postal Code

State Zip Code

Daytime Telephone Number

USE THIS PORTION FOR 2006 FORMS ONLY

Cat. No. 43708F

1098 T Tuition Statement

1098 Mortgage Interest Statement

1099 G Certain Government Payments

Attention:

Ste/Room

( )

1099 QPayments From Qualified EducationPrograms (Under Sections 529 and 530)

5498 ESA

Coverdell ESA Contribution

Information

1099 CAPChanges in Corporate Control and

Capital Structure

1099 HHealth Coverage Tax Credit (HCTC)Advance Payments

1098-CContributions of Motor Vehicles, Boats,and Airplanes

Order Now at www.irs.gov/businessesand follow the link to Online Ordering for Information Returns and Employer Returns

944 Employers ANNUAL Federal TaxReturn

Pub 15

Pub 15-A

Pub 15-B

(Circular E), Employers Tax Guide

Employers Supplemental Tax Guide

Employers Tax Guide to FringeBenefits


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Send your order to the Internal Revenue Service at theaddress below:

Where To Send Your Order

National Distribution CenterP.O. Box 8908Bloomington, IL 61702-8908

The time needed to complete this form will vary dependingon the individual circumstances. The estimated average timeis 3 minutes. If you have comments concerning the accuracyof this time estimate or suggestions for making this formsimpler, we would be happy to hear from you. You can writeto the Internal Revenue Service, Tax Products CoordinatingCommittee, SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave.NW, Washington, DC 20224.

Please do not send your order Form 7018 to the TaxProducts Coordinating Committee. Send your order to theNational Distribution Center.

or records relating to a form or its instructions must beretained as long as their contents may become material inthe administration of any Internal Revenue law. Generally, taxreturns and return information are confidential, as required byCode section 6103.

Paperwork Reduction Act Notice. We ask for theinformation on this form to carry out the Internal Revenuelaws of the United States. Your response is voluntary.

You are not required to provide the information requestedon a form that is subject to the Paperwork Reduction Actunless the form displays a valid OMB control number. Books


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For Privacy Act and Paperwork ReductionAct Notice, see back of Copy D

1

Control number

Retirementplan

Third-partysick pay

Statutoryemployee

6

2

Employers name, address, and ZIP code

Allocated tips7

Advance EIC payment

8

109

Wages, tips, other compensation Federal income tax withheld

Social security tax withheldSocial security wages

12a11

Employers state ID number

43

Employer identification number (EIN)

Medicare wages and tips

Social security tips

13

5

Employees social security number

Employees first name and initial Nonqualified plans

Medicare tax withheld

15

14

1716

Other

18

Employees address and ZIP code

State income taxState State wages, tips, etc. Locality name

Copy A For Social Security Administration Send this entire page withForm W-3 to the Social Security Administration; photocopies are not acceptable.


Do Not Cut, Fold, or Staple Forms on This Page Do Not Cut, Fold, or Staple Forms on This Page

Form

Dependent care benefits

See instructions for box 12

Cat. No. 10134D

a

b

c

d

e

f

Void

W-2Wage and TaxStatement 2

22222

00 6

OMB No. 1545-0008

For Official Use Only

Last nameCode

12bCode

12cCode

19Local wages, tips, etc. 20Local income tax

12dCode

Suff.


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1

Control number

Retirementplan

Third-partysick pay

Statutoryemployee

6

2


Allocated tips7

Advance EIC payment

8

109



12a11


43




13

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15

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1716

Other

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Copy 1For State, City, or Local Tax Department


Form


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W-2Wage and TaxStatement 2 00 6

OMB No. 1545-0008

Last nameCode

12bCode

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12dCode

22222

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1

Control number

Retirementplan

Third-partysick pay

Statutoryemployee

6

2


Allocated tips7

Advance EIC payment

8

109



12a11


43




13

5




15

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1716

Other

18



Copy BTo Be Filed With Employees FEDERAL Tax Return.This information is being furnished to the Internal Revenue Service.


Form



a

b

c

d

e

f


OMB No. 1545-0008

Last nameCode

12bCode

12cCode


12dCode

Safe, accurate,

FAST! Use

Visit the IRS website

at www.irs.gov/efile.

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Notice to Employee

efund. Even if you do not have to file a tax return, youhould file to get a refund if box 2 shows federal income tax

withheld or if you can take the earned income credit.

arned income credit (EIC). You must file a tax return ifny amount is shown in box 9.

You may be able to take the EIC for 2006 if: (a) you do notave a qualifying child and you earned less than $12,120

$14,120 if married filing jointly), (b) you have one qualifyinghild and you earned less than $32,001 ($34,001 if marrieding jointly), or (c) you have more than one qualifying childnd you earned less than $36,348 ($38,348 if married filingointly). You and any qualifying children must have validocial security numbers (SSNs). You cannot take the EIC ifour investment income is more than $2,800.Any EIC thats more than your tax liability is refunded to you, but only

you file a tax return. If you have at least one qualifyinghild, you may get as much as $1,648 of the EIC in advancey completing Form W-5, Earned Income Credit Advanceayment Certificate, and giving it to your employer.

Corrections. If your name, SSN, or address is incorrect,correct Copies B, C, and 2 and ask your employer to coryour employment record. Be sure to ask the employer to Form W-2c, Corrected Wage and Tax Statement, with theSocial Security Administration (SSA) to correct any name,

SSN, or money amount error reported to the SSA on FormW-2. If your name and SSN are correct but are not the saas shown on your social security card, you should ask fonew card at any SSA office or call 1-800-772-1213.

Credit for excess taxes. If you had more than oneemployer in 2006 and more than $5,840.40 in social secuand/or Tier I railroad retirement (RRTA) taxes were withheyou may be able to claim a credit for the excess againstyour federal income tax. If you had more than one railroaemployer and more than $3,075.60 in Tier II RRTA tax wawithheld, you also may be able to claim a credit. See youForm 1040 or Form 1040A instructions and Publication 50Tax Withholding and Estimated Tax.

Clergy and religious workers. If you are not subject tosocial security and Medicare taxes, see Publication 517,Social Security and Other Information for Members of theClergy and Religious Workers.

(Also see Instructions for Emploon the back of Copy C.)


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1

Control number

Retirementplan

Third-partysick pay

Statutoryemployee

6

2


Allocated tips7

Advance EIC payment

8

109



12a11


43




13

5




15

14

1716

Other

18



Copy CFor EMPLOYEES RECORDS (see Notice toEmployee on back of Copy B.)


Form



a

b

c

d

e

f


OMB No. 1545-0008

Last nameCode

12bCode

12cCode


12dCode

This information is being furnished to the Internal Revenue Service. If youare required to file a tax return, a negligence penalty or other sanction maybe imposed on you if this income is taxable and you fail to report it.

Safe, accurate,

FAST! Use

Suff.


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However, if you were at least age 50 in 2006, your employmay have allowed an additional deferral of up to $5,000 ($2,5for section 401(k)(11) and 408(p) SIMPLE plans). This additiodeferral amount is not subject to the overall limit on electivedeferrals. For code G, the limit on elective deferrals may behigher for the last three years before you reach retirement agContact your plan administrator for more information. Amounin excess of the overall elective deferral limit must be includein income. See the Wages, Salaries, Tips, etc. line instructiofor Form 1040.

Box 11. This amount is: (a) reported in box 1 if it is aistribution made to you from a nonqualified deferredompensation or nongovernmental section 457(b) plan or (b)

ncluded in box 3 and/or 5 if it is a prior year deferral under aonqualified or section 457(b) plan that became taxable forocial security and Medicare taxes this year because there is noonger a substantial risk of forfeiture of your right to the

eferred amount.

ox 8. This amount is not included in boxes 1, 3, 5, or 7. Forformation on how to report tips on your tax return, see yourorm 1040 instructions.

ox 9. Enter this amount on the advance earned income creditayments line of your Form 1040 or Form 1040A.

ox 2. Enter this amount on the federal income tax withheldne of your tax return.

DElective deferrals to a section 401(k) cash or deferredarrangement. Also includes deferrals under a SIMPLE retiremaccount that is part of a section 401(k) arrangement.

ox 1. Enter this amount on the wages line of your tax return.

ox 10. This amount is the total dependent care benefits thatour employer paid to you or incurred on your behalf (includingmounts from a section 125 (cafeteria) plan). Any amount over5,000 also is included in box 1. You must complete Schedule(Form 1040A) or Form 2441, Child and Dependent Carexpenses, to compute any taxable and nontaxable amounts.

AUncollected social security or RRTA tax on tips. Include ttax on Form 1040. See Total Tax in the Form 1040instructions.

CTaxable cost of group-term life insurance over $50,000(included in boxes 1, 3 (up to social security wage base), and

nstructions for Employee (also see Notice tomployee, on back of Copy B)

BUncollected Medicare tax on tips. Include this tax on For1040. See Total Tax in the Form 1040 instructions.

Note. If a year follows code D, E, F, G, H, or S, you made amake-up pension contribution for a prior year(s) when you wein military service. To figure whether you made excess deferrconsider these amounts for the year shown, not the currentyear. If no year is shown, the contributions are for the currenyear.

ox 12. The following list explains the codes shown inox 12. You may need this information to complete your taxeturn. Elective deferrals (codes D, E, F, and S) and designatedoth contributions (codesAA and BB) under all plans areenerally limited to a total of $15,000 ($10,000 if you only haveIMPLE plans; $18,000 for section 403(b) plans if you qualify

EElective deferrals under a section 403(b) salary reductionagreement

for the 15-year rule explained in Pub. 571). Deferrals undercode G are limited to $15,000. Deferrals under code H arelimited to $7,000.

(continued on back of Cop


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1

Control number

Retirementplan

Third-partysick pay

Statutoryemployee

6

2


Allocated tips7

Advance EIC payment

8

109



12a11


43




13

5




15

14

1716

Other

18



Copy 2To Be Filed With Employees State, City, or LocalIncome Tax Return.


Form


a

b

c

d

e

f


OMB No. 1545-0008

Last nameCode

12bCode

12cCode


12dCode

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Box 13. If the Retirement plan box is checked, speciallimits may apply to the amount of traditional IRAcontributions that you may deduct.

GElective deferrals and employer contributions (includingonelective deferrals) to a section 457(b) deferredompensation plan

Elective deferrals to a section 501(c)(18)(D) tax-exemptrganization plan. See Adjusted Gross Income in the Form040 instructions for how to deduct.Nontaxable sick pay (information only, not included inoxes 1, 3, or 5)

K20% excise tax on excess golden parachute payments.ee Total Tax in the Form 1040 instructions.

Substantiated employee business expenseeimbursements (nontaxable)

MUncollected social security or RRTA tax on taxable costf group-term life insurance over $50,000 (former employeesnly). See Total Tax in the Form 1040 instructions.

Uncollected Medicare tax on taxable cost of group-termfe insurance over $50,000 (former employees only). SeeTotal Tax in the Form 1040 instructions.

Excludable moving expense reimbursements paidirectly to employee (not included in boxes 1, 3, or 5)

Note: Keep Copy C of Form W-2 for at least 3 years aftethe due date for filing your income tax return. However, to

helpprotect your social security benefits,keep Copy Cuntil you begin receiving social security benefits, just in cathere is a question about your work record and/or earning

in a particular year. Review the information shown on youannual (for workers over 25) Social Security Statement.

nstructions for Employee (continued from back ofopy C)

Employer contributions to your Archer MSA. Report onorm 8853, Archer MSAs and Long-Term Care Insuranceontracts.

SEmployee salary reduction contributions under a sect408(p) SIMPLE (not included in box 1)

TAdoption benefits (not included in box 1). You mustcomplete Form 8839, Qualified Adoption Expenses, tocompute any taxable and nontaxable amounts.

VIncome from exercise of nonstatutory stock option(s)(included in boxes 1, 3 (up to social security wage base),and 5)

WEmployer contributions to your Health Savings Accou

Report on Form 8889, Health Savings Accounts (HSAs).

QNontaxable combat pay. See the instructions for Form040 or Form 1040A for details on reporting this amount.

YDeferrals under a section 409A nonqualified deferredcompensation plan.

ZIncome under section 409A on a nonqualified deferredcompensation plan. This amount is also included in box 1is subject to an additional 20% tax plus interest. See ToTax in the Form 1040 instructions.

AADesignated Roth contributions to a section 401(k) p

BBDesignated Roth contributions under a section 403(salary reduction agreement.

Elective deferrals under a section 408(k)(6) salaryeduction SEP


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Control number

Retirementplan

Third-partysick pay

Statutoryemployee

6

2


Allocated tips7

Advance EIC payment

8

109



12a11


43




13

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15

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1716

Other

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Copy DFor Employer.


Form



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OMB No. 1545-0008

Last nameCode

12bCode

12cCode


12dCode

For Privacy Act and Paperwork ReductionAct Notice, see back of Copy D

Void

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Employers, Please Note

pecific information needed to complete Form W-2 is given inseparate booklet titled 2006 Instructions for Forms W-2 and

W-3. You can order those instructions and additional formsy calling 1-800-TAX-FORM (1-800-829-3676). You can alsoet forms and instructions from the IRS website at

www.irs.gov.

Due dates. Furnish Copies B, C, and 2 to the employeeenerally by January 31, 2007.

File Copy A with the SSA generally by February 28, 2007.end all Copies A with Form W-3, Transmittal of Wage andax Statements. However, if you file electronically, the dueate is April 2, 2007.

Caution. Because the SSA processes paper forms by

machine, you cannot file with the SSA Forms W-2 and W-3hat you print from the IRS website. Instead, you can usehe SSA website at www.socialsecurity.gov/mployer/bsohbnew.htm to create and file electronicallyfill-in versions of Forms W-2 and W-3.

rivacy Act and Paperwork Reduction Act Notice. We ask

or the information on Forms W-2 and W-3 to carry out thenternal Revenue laws of the United States. We need it togure and collect the right amount of tax. Section 6051 ands regulations require you to furnish wage and tax statementso employees and to the Social Security Administration.ection 6109 requires you to provide your employer

dentification number (EIN). If you fail to provide thisnformation in a timely manner, you may be subject toenalties.

You are not required to provide the information requeston a form that is subject to the Paperwork Reduction Actunless the form displays a valid OMB control number. Boor records relating to a form or its instructions must beretained as long as their contents may become material inthe administration of any Internal Revenue law.

Generally, tax returns and return information are

confidential, as required by section 6103. However,section 6103 allows or requires the Internal RevenueService to disclose or give the information shown on yourreturn to others as described in the Code. For example, wmay disclose your tax information to the Department ofJustice for civil and/or criminal litigation, and to cities,states, and the District of Columbia for use in administerintheir tax laws. We may also disclose this information toother countries under a tax treaty, to federal and stateagencies to enforce federal nontax criminal laws, or tofederal law enforcement and intelligence agencies to comterrorism.

The time needed to complete and file these forms will vdepending on individual circumstances. The estimated

average times are: Form W-230 minutes, and FormW-328 minutes. If you have comments concerning theaccuracy of these time estimates or suggestions for makithese forms simpler, we would be happy to hear from youYou can write to the Internal Revenue Service, Tax ProduCoordinating Committee, SE:W:CAR:MP:T:T:SP, 1111Constitution Ave. NW, IR-6406, Washington, DC 20224. Dnot send Forms W-2 and W-3 to this address. Instead, seWhere to file in the Instructions for Forms W-2 and W-3.


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Under penalties of perjury, I declare that I have examined this return and accompanying documents, and, to the best of my knowledge and belief,they are true, correct, and complete.

Date Title Signature


Cat. No. 10159Y

Total number of Forms W-2

943Military941b

KindofPayer

Medicaregovt. emp.

Hshld.emp.CT-1

c d Establishment number

1

6

2

Allocated tips7

Advance EIC payments

8

109



1211


43



13

14

5


Employers name

Nonqualified plans


15

Employers address and ZIP code


Deferred compensation

e

f

g

Other EIN used this yearh

Income tax withheld by payer of third-party sick pay

2 00 6

For Official Use OnlyTelephone number

Fax numberEmail address

( )

( )

Control numbera For Official Use Only

OMB No. 1545-0008

Transmittal of Wage and Tax StatementsW-3Form

33333

Contact person

For third-party sick pay use only

Third-partysick pay

16 State wages, tips, etc.

18 Local wages, tips, etc.

17

19

State income tax

Local income tax

State

Social Security AdministrationData Operations Center

Wilkes-Barre, PA 18769-0001

Note. If you use Certified Mail to file, change the ZIP codeto 18769-0002. If you use an IRS-approved private deliveryservice, add ATTN: W-2 Process, 1150 E. Mountain Dr. tothe address and change the ZIP code to 18702-7997. SeePublication 15 (Circular E), Employers Tax Guide, for a list oIRS-approved private delivery services.

Whats New

Send this entire page with the entire Copy A page of Form(sW-2 to:

Where To File

Send this entire page with the entire Copy A page of Form(s) W-2 to the Social Security Administration.Photocopies are not acceptable.

Do not send any payment (cash, checks, money orders, etc.) with Forms W-2 and W-3.

For Privacy Act and Paperwork Reduction Act Notice, see back of Copy D of Form W-2.

New checkbox for box b on Form W-3. Use the 944checkbox in box b if you file Form 944, Employers AnnualFederal Tax Return. Form 944 for 2006 is a newly developedform.

When To File

Purpose of FormUse Form W-3 to transmit Copy A of Form(s) W-2, Wageand Tax Statement. Make a copy of Form W-3 and keep itwith Copy D (For Employer) of Form(s) W-2 for your records.Use Form W-3 for the correct year. File Form W-3 even ifonly one Form W-2 is being filed. If you are filing Form(s)W-2 electronically, do not file Form W-3.

File Form W-3 with Copy A of Form(s) W-2 byFebruary 28, 2007.

ReminderSeparate instructions. See the 2006 Instructions for FormsW-2 and W-3 for information on completing this form.

Magnetic media filing is discontinued. The Social SecurityAdministration (SSA) will no longer accept any magneticmedia reporting of Forms W-2.

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Department of the TreasuryInternal Revenue Service2006

Instructions for Forms W-2and W-3Wage and Tax Statement andTransmittal of Wage and Tax Statements

Section references are to the Internal Revenue Code unless Nonqualified deferred compensation plans. Sectionotherwise noted. 409A, added by the American Jobs Creation Act of 2004,

provides that all amounts deferred under a nonqualifiedContents Pagedeferred compensation (NQDC) plan for all taxable yearsWhats New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1are currently includible in gross income unless certainReminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1requirements are satisfied. See Nonqualified deferredNeed Help? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2compensation planson page 7.

How To Get Forms and Publications . . . . . . . . . . . . . . . 2Extended due date for electronic filers. If you file yourCommon Errors on Forms W-2 . . . . . . . . . . . . . . . . . . . 22006 Forms W-2 with the Social Security AdministrationGeneral Instructions for Forms W-2 and W-3 . . . . . . . . 2(SSA) electronically, the due date is extended toSpecial Reporting Situations for Form W-2 . . . . . . . . . . 4April 2, 2007. For information on how to file electronically,Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8see Electronic reportingon page 3.Specific Instructions for Form W-2 . . . . . . . . . . . . . . . . 8

Specific Instructions for Form W-3 . . . . . . . . . . . . . . . 14 Online filing of Forms W-2 and W-3. File Forms W-2 andReconciling Forms W-2, W-3, 941, 943, 944, W-3 electronically by visiting SSAs Employer Reporting

Instructions and Information website at www.socialsecurity.CT-1, and Schedule H (Form 1040) . . . . . . . . . . . . . 15gov/employer, selecting Electronically File Your W-2s, andForm W-2 Reference Guide for Box 12 Codes . . . . . . . 16logging into Business Services Online (BSO). SSAsIndex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Create Forms W-2 Online option allows you to createfill-in versions of Forms W-2 for filing with the SSA and toWhats New print out copies of the forms for filing with state or localgovernments, distribution to your employees, and for yourNew code AA, box 12. We added code AA to reportrecords. Form W-3 will be created for you based on yourdesignated Roth contributions to a section 401(k) plan. ForForms W-2. Also see Online wage reportingon page 2.more information, see Designated Roth contributionson

page 5. Substitute forms. If you are not using the official IRS formto furnish Form W-2 to employees or to file with the SSA,New code BB, box 12. We added code BB to report

you may use an acceptable substitute form that compliesdesignated Roth contributions under a section 403(b) salary with the rules in Pub. 1141, General Rules andreduction agreement. For more information, see DesignatedSpecifications for Substitute Forms W-2 and W-3.Roth contributionson page 5.Pub. 1141, which is revised annually, is a revenue

New Form 944. We added a checkbox for Form 944, procedure that explains the requirements for format andEmployers Annual Federal Tax Return, to box b of Form content of substitute Forms W-2 and W-3. Your substituteW-3. Form 944 for 2006 is a newly developed form. forms must comply with the requirements in Pub. 1141.References to Form 944 have been included as appropriate.

Earned income credit (EIC) notice. You must notifySuffix entry, box e. We added a separate entry field to employees who have no income tax withheld that they maybox e (employees name) on Form W-2 for employee suffix be able to claim an income tax refund because of the EIC.names such as Jr. or Sr. For more information, see You can do this by using the official IRS Form W-2 with theBoxes e and fEmployees name and addresson page 9. EIC notice on the back of Copy B or a substitute Form W-2

with the same statement. You must give your employeeEmployee instructions added to Copy 2. We made theNotice 797, Possible Federal Tax Refund Due to the Earnedemployee instructions on the back of Copy C easier to readIncome Credit (EIC), or your own statement that containsby increasing their type size and continuing the instructions

the same wording if (a) you use a substitute Form W-2 thaton the back of Copy 2. does not contain the EIC notice, (b) you are not required tofurnish Form W-2, or (c) you do not furnish a timely FormRemindersW-2 to your employee. For more information, see section 10

Electronic payee statements. If your employees give their in Pub. 15 (Circular E).consent, you may be able to furnish Copies B, C, and 2 of

Distributions from governmental section 457(b) plans ofForms W-2 to your employees electronically. See Pub. 15-A, state and local agencies. Generally, report distributionsEmployers Supplemental Tax Guide, for additional

after December 31, 2001 from section 457(b) plans of stateinformation. and local agencies on Form 1099-R, Distributions FromElimination of magnetic media as a filing method. The Pensions, Annuities, Retirement or Profit-Sharing Plans,last year for filing Forms W-2 on tapes and cartridges was IRAs, Insurance Contracts, etc. See Notice 2003-20 fortax year 2004 (forms timely filed with the SSA in 2005). The details. You can find Notice 2003-20 on page 894 of Internallast year for filing Forms W-2 on diskette was tax year 2005 Revenue Bulletin 2003-19 at www.irs.gov/pub/irs-irbs/(forms timely filed with the SSA in 2006). irb03-19.pdf.

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By phone and in person. You can order forms andNeed Help?publications by calling 1-800-TAX-FORM (1-800-829-3676).

Information reporting customer service site. The IRS You can also get most forms and publications at your localoperates a centralized customer service site to answer IRS office.questions about reporting on Forms W-2, W-3, 1099, andother information returns. If you have questions about Common Errors on Forms W-2reporting on these forms, call 1-866-455-7438 (toll free),

Forms W-2 provide information to your employees, the SSA,Monday through Friday, 8:30 a.m. to 4:30 p.m. Eastern time.the IRS, and state and local governments. Avoid making theIf you have questions about electronic filing of Forms W-2,following errors, which cause processing delays.contact the SSA at 1-800-772-6270 or visit the SSA website

at www.socialsecurity.gov/employer.Do not:

Help for people with disabilities. Telephone help is Use ink that is too light to make entries. Use only blackavailable using TTY/TDD equipment. If you have questions ink.about reporting on information returnsForms 1096, 1098,

Make entries that are too small or too large. Use 12-point1099, 5498, W-2, W-2G, and W-3, you may call Courier font, if possible.304-267-3367. For any other tax information, call

Add dollar signs to the money-amount boxes. They have1-800-829-4059. been removed from Copy A and are not required.Online wage reporting. Using a personal computer and a Inappropriately check the Retirement plan checkbox inmodem, you can access SSAs Business Services Online box 13. See Retirement planon page 13.(BSO) to electronically report wage data. To obtain Misformat the employees name in box e. Enter theinformation regarding filing wage data electronically with employees first name and middle initial in the first box, hisSSA or to access BSO, visit the SSAs Employer Reporting or her surname in the second box, and his or her suffix inInstructions and Information website at www.socialsecurity. the third box.gov/employer. Call the SSA at 1-888-772-2970 if youexperience problems using any of the services within BSO. General Instructions for Forms

The website includes information on electronic filing,

some IRS and SSA publications, and general topics of W-2 and W-3interest about annual wage reporting. You can also use Who must file Form W-2. Employers must file Form W-2BSO to ask questions about wage reporting.for wages paid to each employee from whom:

Employers can also electronically file MMREF-1 wage Income, social security, or Medicare tax was withheld orreports. See Electronic reportingon page 3. Income tax would have been withheld if the employee had

claimed no more than one withholding allowance or had notEmployment tax information. Detailed employment taxclaimed exemption from withholding on Form W-4,information is given in:Employees Withholding Allowance Certificate. Pub. 15 (Circular E), Employers Tax Guide,

Pub. 15-A, Employers Supplemental Tax Guide, Also, every employer engaged in a trade or business who Pub. 15-B, Employers Tax Guide to Fringe Benefits, and pays remuneration for services performed by an employee, Pub. 51 (Circular A), Agricultural Employers Tax Guide. including noncash payments, must furnish a Form W-2 to

You can also call the IRS with your employment tax each employee even if the employee is related to thequestions at 1-800-829-4933 (hours of operation are employer.Monday through Friday 8:00 a.m to 8:00 p.m. local time) or If you are required to file 250 or more Forms W-2, seevisit the IRS website at www.irs.govand type Employment

Electronic reportingon page 3.Taxes in the Keyword/Search Termsbox.Who must file Form W-3. Anyone required to file FormW-2 must file Form W-3 to transmit Copy A of Forms W-2.How To Get Forms and PublicationsMake a copy of Form W-3; keep it and Copy D (For

Personal computer. You can access the IRS website 24 Employer) of Forms W-2 with your records for 4 years. Behours a day, 7 days a week at www.irs.govto: sure to use Form W-3 for the correct year. If you are filing Download forms, instructions, and publications. Forms W-2 electronically, see Electronic reportingon See answers to frequently asked tax questions. page 3. Search publications on-line by topic or keyword. Household employers, even those with only one Send us comments or request help by email. household employee, must file Form W-3 if filing a paper Sign up to receive local and national tax news by email. Form W-2. On Form W-3 check the Hshld. emp. checkbox

in box b. For more information, see Schedule H (FormDo not file Copy A of Forms W-2, W-3, W-2c, and1040), Household Employment Taxes, and its separateW-3c downloaded from the IRS website with theinstructions. You must have an EIN. See Box bEmployerSSA. They are provided for informational purposesCAUTION

!identification number (EIN)on page 9.only. A penalty of $50 per information return may be

imposed for filing such forms that cannot be scanned. Who may sign Form W-3. A transmitter or sender(including a service bureau, reporting agent, paying agent,CD. Order Pub. 1796, IRS Tax Products on CD, and get:or disbursing agent) may sign Form W-3 (or use its PIN on Current year forms, instructions, and publications;electronic filings) for the employer or payer only if the Prior year forms, instructions, and publications;sender: Popular tax forms that can be filled in electronically, Is authorized to sign by an agency agreement (either oral,printed out for submission, and saved for recordkeeping;written, or implied) that is valid under state law andand Writes For (name of payer) next to the signature (paper The Internal Revenue Bulletin.Form W-3 only).Purchase the CD on the Internet at www.irs.gov/cdorders

from the National Technical Information Service (NTIS) or If an authorized sender signs for the payer, the payer isfrom the Government Printing Office (GPO) at www. still responsible for filing, when due, a correct and completebookstore.gpo.gov/irs. You can also purchase the CD by Form W-3 and related Forms W-2, and is subject to anycalling 1-877-CDFORMS (1-877-233-6767) toll free. penalties that result from not complying with these

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requirements. Be sure that the payers name and employer for filing on diskette was tax year 2005 (forms timely filedidentification number (EIN) on Forms W-2 and W-3 are the with the SSA in 2006).same as those used on the Form 941, Employers Quarterly

You are encouraged to file electronically even ifFederal Tax Return, Form 943, Employers Annual Federalyou are filing fewer than 250 Forms W-2. SmallTax Return for Agricultural Employees, Form 944,submitters may be able to file Forms W-2 online. For

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Employers Annual Federal Tax Return, Form CT-1,more information, visit SSAs Employer ReportingEmployers Annual Railroad Retirement Tax Return, orInstructions and Information website atwww.socialsecurity.Schedule H (Form 1040) filed by or for the payer.gov/employerand select Business Services Online Tutorial.

When to file. File Copy A of Form W-2 with the entire pageYou may request a waiver on Form 8508, Requestof Form W-3 by February 28, 2007. However, if you file

for Waiver From Filing Information Returns Electronically/electronically, the due date is April 2, 2007. You may owe aMagnetically. Submit Form 8508 to the IRS at least 45 days

penalty for each Form W-2 that you file late. See Penalties before the due date of Form W-2. See Form 8508 for filingon page 8. If you terminate your business, see Terminatinginformation.a businesson page 7.

Extension to file. You may request an automatic If you file electronically, do not file the same returnsextension of time to file Form W-2 with the SSA by sending on paper.Form 8809, Application for Extension of Time To File CAUTION

!Information Returns, to the address shown on Form 8809.

Electronic reporting specifications for Form W-2 are in theYou must request the extension before the due date ofSSAs MMREF-1, a publication that can be downloaded byForms W-2. You will have an additional 30 days to file. Seeaccessing SSAs Employer Reporting Instructions andForm 8809 for details.Information website at www.socialsecurity.gov/employerand

Even if you request an extension to file Form W-2, selecting Forms and publications. You can also getyou must still furnish Form W-2 to your employees electronic specifications by calling SSAs Employerby January 31, 2007. But seeExtension to furnish Reporting Branch at 1-800-772-6270.CAUTION

!Forms W-2 to employees below.

Reporting instructions for electronic filing differ in a few

Where to file. File the entire Copy A page of Form W-2 with situations from paper reporting instructions. For example,the entire page of Form W-3 at the following address: electronic filers may enter more than four items in box 12 inone individuals wage report, but paper filers are limited tofour entries in box 12 on Copy A of each Form W-2.Social Security Administration

Data Operations Center Furnishing Copies B, C, and 2 to employees. FurnishWilkes-Barre, PA 18769-0001 Copies B, C, and 2 of Form W-2 to your employees,

generally, by January 31, 2007. You will meet the furnishIf you use Certified Mail to file, change the ZIPrequirement if the form is properly addressed and mailed oncode to 18769-0002. If you use an IRS-approvedor before the due date.private delivery service, add ATTN: W-2 Process,

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1150 E. Mountain Dr. to the address and change the ZIP If employment ends before December 31, 2006, you maycode to 18702-7997. See Pub. 15 (Circular E) for a list of furnish copies to the employee at any time after employmentIRS-approved private delivery services. ends, but no later than January 31, 2007. If an employee

asks for Form W-2, give him or her the completed copiesDo not send cash, checks, money orders, etc. with within 30 days of the request or within 30 days of the finalthe Forms W-2 and W-3 that you submit to the SSA. wage payment, whichever is later. However, if you terminateDo not use the address above to file electronically.CAUTION

!your business, see Terminating a businesson page 7.See SSAs MMREF-1, Magnetic Media Reporting and

You may furnish Forms W-2 to employees on IRS officialElectronic Filing, for the electronic filing address.forms or on acceptable substitute forms. See SubstituteEmployment tax forms (for example, Form 941 or Formformson page 1. Be sure that the Forms W-2 you provide943), remittances, and Forms 1099 must be sent to the IRS.to employees are clear and legible and comply with theSend Copy 1 of Form W-2 to your state, city, or local taxrequirements in Pub. 1141.

department. For more information concerning Copy 1Extension to furnish Forms W-2 to employees. You(including how to complete boxes 15-20), contact your state,

may request an extension of time to furnish Forms W-2 tocity, or local tax department.employees by sending a letter to:Shipping and mailing. If you file more than one type of

employment tax form, please group Forms W-2 of the sametype with a separate Form W-3 for each type, and send IRS Enterprise Computing CenterMartinsburgthem in separate groups. See the specific instructions for Information Reporting Programbox b of Form W-3 on page 14. Attn: Extension of Time Coordinator

240 Murall DrivePrepare and file Forms W-2 either alphabetically byKearneysville, WV 25430employees last names or numerically by employees social

security numbers. Please do not staple or tape Form W-3 Mail your letter on or before the due date for furnishingto the related Forms W-2 or Forms W-2 to each other. Forms W-2 to employees. It must include:These forms are machine read. Staple holes or tears Your name and address,interfere with machine reading. Also, do not fold Forms Your employer identification number (EIN),W-2 and W-3. Send the forms to the SSA in a flat mailing. A statement that you are requesting an extension to

furnish Forms W-2 to employees,Electronic reporting. If you are required to file 250 or Reason for delay, andmore Forms W-2, you must file them electronically unless Your signature or that of your authorized agent.the IRS granted you a waiver. You may be charged a

penalty if you fail to file electronically when required. Undeliverable Forms W-2. Keep for four years anyElimination of magnetic media as a filing method. employee copies of Forms W-2 that you tried to deliver but

The last year for filing on tapes and cartridges was tax year could not. Do not send undeliverable Forms W-2 to the2004 (forms timely filed with the SSA in 2005). The last year SSA.

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Taxpayer identification numbers (TINs). Employers use Archer MSA. An employers contribution to an employeesan employer identification number (EIN) (00-0000000). Archer MSA is not subject to income tax withholding, orEmployees use a social security number (SSN) social security, Medicare, or railroad retirement taxes if it is(000-00-0000). When you list a number, please separate the reasonable to believe at the time of the payment that thenine digits properly to show the kind of number. Do not contribution will be excludable from the employees income.accept an individual taxpayer identification number (ITIN) for However, if it is not reasonable to believe at the time ofemployment purposes. For more information, see section 4 payment that the contribution will be excludable from theof Pub. 15 (Circular E). employees income, employer contributions are subject to

income tax withholding and social security and MedicareThe IRS uses SSNs to check the payments that youtaxes (or railroad retirement taxes, if applicable) and mustreport against the amounts shown on the employees taxbe reported in boxes 1, 3, and 5.returns. The SSA uses SSNs to record employees earnings

You must report all employer contributions to an Archerfor future social security and Medicare benefits. When you MSA in box 12 of Form W-2 with code R. Employerprepare Form W-2, be sure to show the correct SSN forcontributions to an Archer MSA that are not excludable fromeach employee. For information on verification of SSNs,the income of the employee also must be reported in box 1.see section 4 of Pub. 15 (Circular E).

An employees contributions to an Archer MSA areSpecial Reporting Situations for includible in income as wages and are subject to income tax

withholding and social security and Medicare taxes (orForm W-2railroad retirement taxes, if applicable). Employee

Adoption benefits. Amounts paid or expenses incurred by contributions are deductible, within limits, on the employeesan employer for qualified adoption expenses under an Form 1040.adoption assistance program are not subject to income tax See Notice 96-53, 1996-2 C.B. 219 and Pub. 969, Healthwithholding and are not reportable in box 1. However, these Savings Accounts and Other Tax-Favored Health Plans, foramounts (including adoption benefits paid from a section more information. You can find Notice 96-53 on page 5 of125 (cafeteria) plan, but not including adoption benefits Internal Revenue Bulletin 1996-51 at www.irs.gov/pub/forfeited from a cafeteria plan) are subject to social security, irs-irbs/irb96-51.pdf.

Medicare, and railroad retirement taxes and must be Clergy and religious workers. For certain members of thereported in boxes 3 and 5. Also, the total amount must beclergy and religious workers who are not subject to social

reported in box 12 with code T.security and Medicare taxes as employees, boxes 3 and 5

See Notice 97-9, 1997-1 C.B. 365, for more information of Form W-2 should be left blank. You may include aon adoption benefits. You can find Notice 97-9 on page 35 ministers parsonage and/or utilities allowance in box 14. Forof Internal Revenue Bulletin 1997-2 at www.irs.gov/pub/ information on the rules that apply to ministers and certainirs-irbs/irb97-02.pdf. Advise your employees to get Pub. other religious workers, see Pub. 517, Social Security and968, Tax Benefits for Adoption. Other Information for Members of the Clergy and ReligiousAgent reporting. Generally, an agent who has an Workers, and Section 4Religious Exemptionsinapproved Form 2678, Employer Appointment of Agent, Pub. 15-A.should enter the agents name as the employer in box c of Corrections. Use the current version of Form W-2c,Form W-2, and file only one Form W-2 for each employee. Corrected Wage and Tax Statement, to correct errors (suchHowever, if the agent (a) is acting as an agent for two or as incorrect name, SSN, or amount) on a previously filedmore employers or is an employer and is acting as an agent Form W-2.for another employer and (b) pays social security wages for

If the SSA issues your employee a replacement cardmore than one employer in excess of the wage base to an after a name change, or a new card with a different socialindividual, special reporting for payments to that employee is

security number after a change in alien work status, file aneeded.

Form W-2c to correct the name/SSN reported on the mostIf both (a) and (b) above apply, the agent must file recently filed Form W-2. It is not necessary to correct the

separate Forms W-2 for the affected employee reflecting the prior years if the previous name and number were used forwages paid by each employer. On each Form W-2, the the years prior to the most recently filed Form W-2.agent should enter the following in box c of Form W-2:

File Form W-3c, Transmittal of Corrected Wage and Tax(Name of agent) Statements, whenever you file a Form W-2c with the SSA,Agent for (name of employer) even if you are only filing a Form W-2c to correct anAddress of agent employees name or SSN. However, see Incorrect address

on employees Form W-2on page 5 for information oncorrecting an employees address. See the Instructions forEach Form W-2 should reflect the EIN of the agent inForms W-2c and W-3c if an error was made on a previouslybox b. An agent files one Form W-3 for all of the Forms W-2filed Form W-3.and enters its own information in boxes e, f, and g of Form

W-3 as it appears on the agents related employment taxIf you discover an error on Form W-2 after you issue it toreturns (for example, Form 941). Enter the client-employers your employee but before you send it to the SSA, check the

EIN in box h of Form W-3 if the Forms W-2 relate to only Void box at the top of the incorrect Form W-2 on Copy A.one employer (other than the agent); if not, leave box h Prepare a new Form W-2 with the correct information, andblank. See Rev. Proc. 70-6, 1970-1 C.B. 420, for procedures send Copy A to the SSA. Write CORRECTED on theto be followed in applying to be an agent. employees new copies (B, C, and 2), and furnish them to

the employee. If the Void Form W-2 is on a page with aGenerally, an agent is not responsible for refundingcorrect Form W-2, send the entire page to the SSA. Theexcess social security or railroad retirement (RRTA)Void form will not be processed. Do not writetax on employees. If an employee worked for more

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CORRECTED on Copy A of Form W-2.than one employer during 2006 and had more than$5,840.40 in social security and Tier I RRTA tax withheld (or If you are making an adjustment in 2006 to correct socialmore than $3,075.60 in Tier II RRTA tax withheld), he or she security and Medicare taxes for a prior year, you must fileshould claim the excess on the appropriate line of Form 941c, Supporting Statement To Correct Information,Form 1040 or Form 1040A. with your Form 941, Form 943, or Form 944 in the return

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period that you find the error, and issue the employee a Employer X also must complete Form 1099-MISC asForm W-2c for the prior year. If you are correcting social follows:security or Medicare wages or tips, also file the entire CAUTION

!Copy A page of Form W-2c and Form W-3c with the SSA to

Boxes for: Recipients name, address, and TINThecorrect the social security records and any other items on

estates name, address, and TINthe original Form W-2 (or previously filed Form W-2c) that

Box 3: 3000.00 (Even though amounts were withheld forwere in error.

social security and Medicare taxes, the gross amount isIncorrect address on employees Form W-2. If you reported here.)

filed a Form W-2 with the SSA showing an incorrect addressIf Employer X made the payment after the year of

for the employee but all other information on Form W-2 isdeath, the $3,000 would not be subject to social security

correct, do not file Form W-2c with the SSA merely toand Medicare taxes and would not be shown on Form W-2.

correct the address. However, the employer would still file Form 1099-MISC.However, if the address was incorrect on the Form W-2 Designated Roth contributions. New section 402A, added

furnished to the employee, you must do one of the by the Economic Growth and Tax Reconciliation Act offollowing: 2001, provides that a participant in a section 401(k) plan or Issue a new, corrected Form W-2 to the employee, under a 403(b) salary reduction agreement that includes aincluding the new address. Indicate REISSUED qualified Roth contribution program may elect to makeSTATEMENT on the new copies. Do not send Copy A to designated Roth contributions to the plan or program in lieuthe SSA. of elective deferrals. Designated Roth contributions are Issue a Form W-2c to the employee showing the correct subject to income tax withholding and social security andaddress in box f and all other correct information. Do not Medicare taxes (and railroad retirement taxes, if applicable)send Copy A to the SSA. and must be reported in boxes 1, 3, and 5. Mail the Form W-2 with the incorrect address to the

The Act requires separate reporting of the yearlyemployee in an envelope showing the correct address ordesignated Roth contributions. Designated Rothotherwise deliver it to the employee.contributions to 401(k) plans will be reported using code AA

Deceased employees wages. If an employee dies during in box 12; designated Roth contributions under 403(b) salarythe year, you must report the accrued wages, vacation pay, reduction agreements will be reported using code BB inand other compensation paid after the date of death. box 12. For reporting instructions, see Code AA and Code

If you made the payment in the same year that the BBon page 13.employee died, you must withhold social security and Educational assistance programs. A $5,250 exclusion forMedicare taxes on the payment and report the payment on employer-provided educational assistance applies tothe employees Form W-2 only as social security and benefits provided to your employees under an educationalMedicare wages to ensure proper social security and assistance program. See Pub. 970, Tax Benefits forMedicare credit is received. Education, and section 2 of Pub. 15-B for more information.

Also see Box 1Wages, tips, other compensationonOn the employees Form W-2, show the payment aspage 9.social security wages (box 3) and Medicare wages and tips

(box 5) and the social security and Medicare taxes withheld Election workers. Report on Form W-2 payments of $600in boxes 4 and 6. Do not show the payment in box 1. or more to election workers for services performed in state,

county, and municipal elections. File Form W-2 forIf you made the payment after the year of death, dopayments of less than $600 paid to election workers if socialnot report it on Form W-2, and do not withhold social

security and Medicare taxes were withheld under a sectionsecurity and Medicare taxes. 218 (Social Security Act) agreement. Do not report electionWhether the payment is made in the year of death or

worker payments on Form 1099-MISC.after the year of death, you also must report it in box 3

If the election worker is employed in another capacityof Form 1099-MISC, Miscellaneous Income, for thewith the same government entity, see Rev. Rul. 2000-06 onpayment to the estate or beneficiary. Use the name andpage 512 of Internal Revenue Bulletin 2000-06 at www.irs.taxpayer identification number (TIN) of the paymentgov/pub/irs-irbs/irb00-06.pdf.recipient on Form 1099-MISC.Employee business expense reimbursements.Example. Before Employee As death on June 15, 2006,Reimbursements to employees for business expenses mustA was employed by Employer X and received $10,000 inbe reported as follows:wages on which federal income tax of $1,500 was withheld. Generally, payments made under an accountable planWhen A died, X owed A $2,000 in wages and $1,000 inare excluded from the employees gross income and are notaccrued vacation pay. The total of $3,000 (less the socialreported on Form W-2. However, if you pay a per diem orsecurity and Medicare taxes withheld) was paid to As estatemileage allowance and the amount paid exceeds theon July 20, 2006. Because X made the payment during theamount treated as substantiated under IRS rules, you mustyear of death, X must withhold social security and Medicare

report as wages on Form W-2 the amount in excess of thetaxes on the $3,000 payment and must complete Form W-2 amount treated as substantiated. The excess amount isas follows:subject to income tax withholding and social security and Box d Employee As SSNMedicare taxes. Report the amount treated as substantiated Box e Employee As name(that is, the nontaxable portion) in box 12 using code L. See Box f Employee As addressCode LSubstantiated employee business expense Box 1 10000.00 (does not include the $3,000 accruedreimbursementson page 12.wages and vacation pay) Payments made under a nonaccountable plan are Box 2 1500.00reported as wages on Form W-2 and are subject to income Box 3 13000.00 (includes the $3,000 accrued wagestax withholding and social security and Medicare taxes.and vacation pay)

Box 4 806.00 (6.2% of the amount in box 3) For more information on accountable plans, Box 5 13000.00 (includes the $3,000 accrued wages nonaccountable plans, amounts treated as substantiatedand vacation pay) under a per diem or mileage allowance, the standard Box 6 188.50 (1.45% of the amount in box 5) mileage rate, the per diem substantiation method, and the

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high-low substantiation method, see Pub. 463, Travel, Form W-3. File the second Form W-2 for wages subject toEntertainment, Gift, and Car Expenses; Pub. 1542, Per both social security and Medicare taxes with the 941 boxDiem Rates; and section 5 of Pub. 15 (Circular E). checked in box b of Form W-3. The wages in box 5 on each

Form W-2 must be equal to or greater than the wages inEmployees taxes paid by employer. If you paid yourbox 3 on that same Form W-2.employees share of social security and Medicare taxes

rather than deducting them from the employees wages, you Group-term life insurance. If you paid for group-term lifemust include these payments as wages subject to income insurance over $50,000 for an employee or a formertax withholding and social security, Medicare, and federal employee, you must report the taxable cost of excessunemployment (FUTA) taxes. Generally, this increase in coverage, determined by using the table in section 2 of Pub.your employees wages for your payment of the employees 15-B, in boxes 1, 3, and 5 of Form W-2. Also, show thesocial security and Medicare taxes is also subject to amount in box 12 with code C. For employees, you must

employee social security and Medicare taxes. The amount withhold social security and Medicare taxes, but not incometo include as wages is determined by using the formula tax. Former employees must pay the employee part of socialcontained in the discussion of Employees Portion of Taxes security and Medicare taxes on the taxable cost ofPaid by Employerin section 7 of Pub. 15 (Circular E). group-term life insurance over $50,000 on Form 1040. You

are not required to collect those taxes. However, you mustThis does not apply to household and agricultural report the uncollected social security tax with code M and

employers. If you pay a household or agricultural the uncollected Medicare tax with code N in box 12 ofemployees social security and Medicare taxes, youCAUTION

!Form W-2.

must include these payments in the employees wages.Health Savings Account (HSA). An employersHowever, the wage increase due to the tax payments is notcontribution to an employees Health Savings Accountsubject to social security, Medicare, or FUTA taxes. For(HSA) is not subject to income tax withholding, or socialinformation on completing Forms W-2 and W-3 in thissecurity, Medicare, or railroad retirement taxes (or FUTAsituation, see the Instructions for Schedule H (Form 1040),tax) if it is reasonable to believe at the time of the paymentHousehold Employers and section 4 of Pub. 51 (Circular A).that the contribution will be excludable from the employees

Fringe benefits. Include all taxable fringe benefits in box 1 income. However, if it is not reasonable to believe at theof Form W-2 as wages, tips, and other compensation and, if

time of payment that the contribution will be excludable fromapplicable, in boxes 3 and 5 as social security and Medicare the employees income, employer contributions are subjectwages. Although not required, you may include the total to income tax withholding and social security and Medicarevalue of fringe benefits in box 14 (or on a separate taxes (or railroad retirement taxes, if applicable) and muststatement). However, if you provided your employee a be reported in boxes 1, 3, and 5 (and on Form 940,vehicle and included 100% of its annual lease value in the Employers Annual Federal Unemployment (FUTA) Taxemployees income, you must separately report this value to Return).the employee in box 14 (or on a separate statement). The

You must report all employer contributions to an HSA inemployee can then figure the value of any business use ofbox 12 of Form W-2 with code W. Employer contributions tothe vehicle and report it on Form 2106, Employee Businessan HSA that are not excludable from the income of theExpenses. Also see Pub. 15-B for more information.employee also must be reported in box 1.

If you used the commuting rule or the vehicleAn employees contributions to an HSA are includible incents-per-mile rule to value the personal use of the

income as wages and are subject to income tax withholdingvehicle, you cannot include 100% of the value of theCAUTION!

and social security and Medicare taxes (or railroaduse of the vehicle in the employees income. See Pub. 15-B.

retirement taxes, if applicable). Employee contributions areGolden parachute payments. Include any golden deductible, within limits, on the employees Form 1040. Forparachute payments in boxes 1, 3, and 5 of Form W-2. more information about HSAs, see Notice 2004-2 andWithhold income, social security, and Medicare taxes as Notice 2004-50. You can find Notice 2004-2 on page 269 ofusual and report them in boxes 2, 4, and 6, respectively. Internal Revenue Bulletin 2004-2 at www.irs.gov/pub/Excess parachute payments are also subject to a 20% irs-irbs/irb04-02.pdf. You can find Notice 2004-50 on pageexcise tax. If the excess payments are considered wages, 196 of Internal Revenue Bulletin 2004-33 at www.irs.gov/withhold the 20% excise tax and include it in box 2 as pub/irs-irbs/irb04-33.pdf. Also see Form 8889, Healthincome tax withheld. Also report the excise tax in box 12 Savings Accounts (HSAs), and Pub. 969.with code K. For definitions and additional information, see

Lost Form W-2reissued statement. If an employeeRegulations section 1.280G-1 and Rev. Proc. 2003-68. Youloses a Form W-2, write REISSUED STATEMENT on thecan find Rev. Proc. 2003-68 on page 398 of Internalnew copy and furnish it to the employee. You do not have toRevenue Bulletin 2003-34 at www.irs.gov/pub/irs-irbs/add Reissued Statement on Forms W-2 provided toirb03-34.pdf.employees electronically. Do not send Copy A of the

Government employers. Federal, state, and local reissued Form W-2 to the SSA. Employers are notagencies have two options for reporting their employees

prohibited (by the Internal Revenue Code) from charging awages that are subject only to Medicare tax for part of the fee for the issuance of a duplicate Form W-2.year and full social security and Medicare taxes for part of

Moving expenses. Report moving expenses as follows:the year. Qualified moving expenses that an employer paid to a

Option one (which the SSA prefers) is to file a single third party on behalf of the employee (for example, to aForm W-2 reflecting the employees wages for the entire moving company) and services that an employer furnishedyear, even if only part of the years wages were subject to in kind to an employee are not reported on Form W-2.both social security and Medicare taxes. The Form W-3

Qualified moving expense reimbursements paid directly tomust have the 941 box checked in box b. The wages in an employee by an employer are reported only in box 12 ofbox 5 must be equal to or greater than the wages in box 3 Form W-2 with code P.on Form W-2.

Nonqualified moving expense reimbursements areOption two is to file two Forms W-2 and two Forms W-3. reported in boxes 1, 3, and 5 of Form W-2. These amounts

File one Form W-2 for wages subject to Medicare tax only. are subject to income tax withholding and social securityBe sure to check the Medicare govt. emp. box in box b of and Medicare taxes.

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Nonqualified deferred compensation plans. Section scholarship). Also see Pub. 15-A and Pub. 970. These409A, added by the American Jobs Creation Act of 2004, payments are subject to income tax withholding. However,provides that all amounts deferred under a nonqualified their taxability for social security and Medicare taxesdeferred compensation (NQDC) plan for all tax years are depends on the nature of the employment and the status ofcurrently includible in gross income unless certain the organization. See Studentsin section 15 of Pub. 15requirements are met. If section 409A requires an amount to (Circular E).be included in gross income, the section imposes a Sick pay. If you had employees who received sick pay insubstantial additional tax. Section 409A, generally, is 2006 from an insurance company or other third-party payereffective with respect to amounts deferred in tax years and the third party notified you of the amount of sick paybeginning after December 31, 2004, but deferrals made involved, you may be required to report the information onprior to that year may be subject to section 409A under the employees Forms W-2. If the insurance company orsome circumstances.

other third-party payer did not notify you in a timely mannerabout the sick pay payments, it must prepare Forms W-2The Act requires reporting of the yearly deferrals (plusand W-3 for your employees showing the sick pay. Forearnings) under a section 409A nonqualified deferredspecific reporting instructions, see Sick Pay Reportingincompensation plan, using code Y in box 12.section 6 of Pub. 15-A.Income included under section 409A from a nonqualifiedSIMPLE retirement account. An employees salarydeferred compensation plan will be reported in box 1, and inreduction contributions to a SIMPLE (savings incentivebox 12 using code Z. This income is also subject to anmatch plan for employees) retirement account are notadditional tax reported on Form 1040. For more information,subject to income tax withholding but are subject to socialsee section 5 of Pub. 15-A.security, Medicare, and railroad retirement taxes. Do notRailroad employers. Railroad employers must file Forminclude an employees contribution in box 1 but do include itW-2 to report their employees wages and income taxin boxes 3 and 5. An employees total contribution also mustwithholding in boxes 1 and 2. Electronic reporting may bebe included in box 12 with code D or S.required; see Electronic reportingon page 3.

An employers matching or nonelective contribution toIf an employee is covered by social security andan employees SIMPLE is not subject to income taxMedicare, also complete boxes 3, 4, 5, 6, and 7 of Form

withholding or social security, Medicare, or railroadW-2 to show the social security and Medicare wages and retirement taxes and is not to be shown on Form W-2.the amounts withheld for social security and Medicare taxes.See Notice 98-4, 1998-1 C.B. 269, for more informationOn the Form W-3 used to transmit these Forms W-2, check

on SIMPLE retirement accounts. You can find Notice 98-4the 941 box in box b.on page 25 of Internal Revenue Bulletin 1998-2 at www.irs.For employees covered by RRTA tax, you also mustgov/pub/irs-irbs/irb98-02.pdf.report the Tier I and Tier II taxes withheld in box 14 of FormSuccessor/predecessor employers. If you buy or sell aW-2. Label them Tier I tax and Tier II tax. Boxes 3, 4, 5,business during the year, see Rev. Proc. 2004-53 for6, and 7 apply only to covered social security and Medicareinformation on who must file Forms W-2 and employmentemployees and are not to be used to report railroadtax returns. You can find Rev. Proc. 2004-53 on page 320 ofretirement wages and taxes. On the Form W-3 used toInternal Revenue Bulletin 2004-34 at www.irs.gov/pub/transmit these Forms W-2, check the CT-1 box in box b.irs-irbs/irb04-34.pdf.Repayments. If an employee repays you for wagesTerminating a business. If you terminate your business,received in error, do not offset the repayments againstyou must provide Forms W-2 to your employees for thecurrent years wages unless the repayments are forcalendar year of termination by the due date of your finalamounts received in error in the current year. RepaymentsForm 941. You must also file Forms W-2 with the SSA bymade in the current year, but related to a prior year or years,the last day of the month that follows the due date of yourmust be repaid in gross, not net, and require special taxfinal Form 941. If filing on paper, make sure you obtaintreatment by employees in some cases. You may advise theForms W-2 and W-3 preprinted with the correct year. If filingemployee of the total repayments made during the currentelectronically, make sure your software has been updatedyear and the amount (if any) related to prior years. Thisfor the current tax year.information will help the employee account for such

repayments on his or her federal income tax return. However, if any of your employees are immediatelyemployed by a successor employer, see Successor/If the repayment was for a prior year, you must file Formpredecessor employersabove. Also, see Rev. Proc. 96-57,W-2c with the SSA to correct only social security and1996-2 C.B. 389 for information on automatic extensions forMedicare wages and taxes. Do not correct Wages infurnishing Forms W-2 to employees and filing Forms W-2.box 1 on Form W-2c for the amount paid in error. ForYou can find Rev. Proc. 96-57 on page 14 of Internalinformation on reporting adjustments to Form 941, FormRevenue Bulletin 1996-53 at www.irs.gov/pub/irs-irbs/943, or Form 944, see section 13 of Pub. 15 (Circular E) orirb96-53.pdf.section 9 of Pub. 51 (Circular A).

Get Schedule D (Form 941), Report of DiscrepanciesTell your employee that the wages paid in error in a Caused by Acquisitions, Statutory Mergers, orprior year remain taxable to him or her for that year.Consolidations, for information on reconciling wagesThis is because the employee received and had use

TIPTIP

and taxes reported on Forms W-2 with amounts reported onof those funds during that year. The employee is not entitledForms 941, Form 943, or Form 944.to file an amended return (Form 1040X) to recover the

income tax on these wages. Instead, the employee is USERRA makeup amounts to a pension plan. If anentitled to a deduction (or a credit, in some cases) for the employee returned to your employment after military servicerepaid wages on his or her Form 1040 for the year of and certain makeup amounts were contributed to a pensionrepayment. plan for a prior year(s) under the Uniformed ServicesScholarship and fellowship grants. Give a Form W-2 to Employment and Reemployment Rights Act of 1994each recipient of a scholarship or fellowship grant only if you (USERRA), report the prior year contributions separately inare reporting amounts includible in income under section box 12. See the TIPabove Code Don page 12. You also117(c) (relating to payments for teaching, research, or other may report certain makeup amounts in box 14. Seeservices required as a condition for receiving the qualified Box 14Otheron page 13.

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Instead of reporting in box 12 (or box 14), you may correct Forms W-2 will not apply to a certain number ofchoose to provide a separate statement to your returns if you:employee showing USERRA makeup contributions. The Filed those Forms W-2 on or before the required filingstatement must identify the type of plan, the year(s) to which date,the contributions relate, and the amount contributed for each Either failed to include all of the information required onyear. the form or included incorrect information, and

Filed corrections of these forms by August 1.

PenaltiesIf you meet all of the conditions above, the penalty for

The following penalties generally apply to the person filing incorrect information returns (including Form W-2) willrequired to file Form W-2. The penalties apply to paper filers not apply to the greater of 10 information returns (includingas well as to electronic filers. Form W-2) or 1/2 of 1% of the total number of information

returns (including Form W-2) that you are required to file forUse of a reporting agent or other third-party payrollthe calendar year.service provider does not relieve an employer of the

responsibility to ensure that Forms W-2 are furnished Lower maximum penalties for small businesses. ForCAUTION!

to employees and are filed correctly and on time. purposes of the lower maximum penalties shown inparentheses above, you are a small business if yourFailure to file correct information returns by the dueaverage annual gross receipts for the three most recent taxdate. If you fail to file a correct Form W-2 by the due dateyears (or for the period that you were in existence, if shorter)and cannot show reasonable cause, you may be subject toending before the calendar year in which the Forms W-2a penalty as provided under section 6721. The penaltywere due are $5 million or less.applies if you:

Intentional disregard of filing requirements. If any Fail to file timely,failure to file a correct Form W-2 is due to intentional Fail to include all information required to be shown ondisregard of the filing or correct information requirements,Form W-2,the penalty is at least $100 per Form W-2 with no maximum Include incorrect information on Form W-2,penalty. File on paper when you were required to file

electronically, Failure to furnish correct payee statements. If you fail to Report an incorrect TIN, provide correct payee statements (Forms W-2) to your Fail to report a TIN, or employees and you cannot show reasonable cause, you Fail to file paper Forms W-2 that are machine readable. may be subject to a penalty. The penalty applies if you fail to

provide the statement by January 31, if you fail to include allThe amount of the penalty is based on when you file theinformation required to be shown on the statement, or if youcorrect Form W-2. The penalty is:include incorrect information on the statement. $15 per Form W-2 if you correctly file within 30 days (by

March 30 if the due date is February 28); maximum penalty The penalty is $50 per statement, no matter when the$75,000 per year ($25,000 for small businesses, defined correct statement is furnished, with a maximum of $100,000later). per year. The penalty is not reduced for furnishing a correct $30 per Form W-2 if you correctly file more than 30 days statement by August 1.after the due date but by August 1; maximum penalty Exception. An inconsequential error or omission is not$150,000 per year ($50,000 for small businesses). considered a failure to include correct information. An $50 per Form W-2 if you file after August 1 or you do not inconsequential error or omission cannot reasonably befile required Forms W-2; maximum penalty $250,000 per expected to prevent or hinder the payee from timely

year ($100,000 for small businesses). receiving correct information and reporting it on his or herincome tax return or from otherwise putting the statement toIf you do not file corrections and you do not meet anyits intended use. Errors and omissions that are neverof the exceptions to the penalty stated below, theinconsequential are those relating to:penalty is $50 per information return.CAUTION

! A dollar amount,

Exceptions to the penalty. The following are A significant item in a payees address, andexceptions to the failure to file correction information returns The appropriate form for the information provided, suchpenalty: as whether the form is an acceptable substitute for the

official IRS form.1. The penalty will not apply to any failure that you canshow was due to reasonable cause and not to willful Intentional disregard of payee statementneglect. In general, you must be able to show that your requirements. If any failure to provide a correct payeefailure was due to an event beyond your control or due to statement (Form W-2) to an employee is due to intentionalsignificant mitigating factors. You must also be able to show disregard of the requirements to furnish a correct payeethat you acted in a responsible manner and took steps to statement, the penalty is at least

Documents

US Internal Revenue Service: p393--2006