New magnetic/electronic reporting requirement.   If you are required to file 250 or more Forms W-2c during a calendar year, you must now file them on magnetic media (or electronically) unless the IRS granted you a waiver. You may be charged a penalty if you fail to file on magnetic media (or electronically) when required. See also Magnetic media/electronic reporting below.

  For purposes of the magnetic media/electronic requirement, only Forms W-2 for the immediate prior year are taken into account. Also, if an employer must file 200 Forms W-2c for the immediate prior year in March and then discovers that another 100 Forms W-2c for the same year must be filed in August, only the 100 Forms W-2c that are filed in August must be filed on magnetic media or electronically.

  You may request a waiver on Form 8508, Request for Waiver From Filing Information Returns Magnetically. Submit Form 8508 to the IRS at least 45 days before you file Forms W-2c. See Form 8508 for filing information.

Revised Forms W-2c and W-3c.   We revised Form W-2c, Corrected Wage and Tax Statement, to provide boxes for the correction of state and local tax information. We also added other Federal boxes that appear on Form W-2, Wage and Tax Statement. As a result, Form W-2c is now printed one per page.

  We revised Form W-3c, Transmittal of Corrected Wage and Tax Statements, by adding a new box (box 14) “Inc. tax W/H by 3rd party sick pay payer.” Use box 14 to correct the amount reported in box 14 of Form W-3, Transmittal of Wage and Tax Statements.

  Copy A of Form W-2c and Form W-3c are now printed in red dropout ink to enhance their scanning capabilities. After June 30, 2003 do not use prior versions of Forms W-2c and W-3c.

Substitute forms.   If you are not using the official IRS form to furnish Form W-2c to employees or to file with the SSA, you may use an acceptable substitute form that complies with the rules in Pub. 1223, General Rules and Specifications for Substitute Forms W-2c and W-3c. Pub. 1223 is a revenue procedure that explains the requirements for format and content of substitute Forms W-2c and W-3c. Your substitute forms must comply with the require-
ments in Pub. 1223.