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MAGNETIC MEDIA REPORTING INFORMATION

W-2 FORMS
Regulations make it mandatory for Employers who file at least 250 or more W-2 forms to file on Magnetic Media. Magnetic Media consists of Magnetic Tape, Diskette, Cassette, and Mini Disk.

If an employer files less than 250 forms he will continue to use copy "A" Paper Returns. If using Magnetic Media is a hardship, the Social Security Administration may grant a waiver for a period of time not to exceed one tax year. If you are required to file on Magnetic Media and have not been granted a waiver you may be subject to a penalty of $50 per return.

All employers who file via Magnetic Media must continue to provide copy B, C, and state or local copies to their Employees. Most states also accept Magnetic Media Reporting.

1099 FORMS
MAG-MEDIA REQUIREMENTS FOR ALL 1099 FORMS - NOW 250 MINIMUM. The change in the magnetic media filing requirements generally affects information returns relating to interest and dividend payments (Forms 1099-INT, DIV, OID, and PATR) and broker and barter exchange transactions (Form 1099-B). You are required to file such information returns on magnetic media only if you are required to file 250 or more returns.

OTHER INFORMATION RETURNS
If you are required to file 250 or more returns on Form 1098, 1099A, 1099G, 1099MISC, 1099R, 1099S, 5498 or W-2G you are required to file on Magnetic Media. For determining the number of returns you are required to file "count each type of form separately", for example, if you must file 300 Form 1098 and 100 1099MISC, you are not required to file Form 1099MISC on Magnetic Media, but you must file Form 1098 on Magnetic Media.

The due dates for Magnetic Media Reporting are the same as for Paper Document Reporting. For further information concerning Magnetic Media Filing or information about a waiver contact: Magnetic Media Reporting, Internal Revenue Service National Computer Center, P.O. Box 1359, Martinsburg, WV, 25401-1359, Telephone: (304)263-8700

The following returns may be filed on Magnetic tape to the IRS:

1099A 1099C 1099G 1099MISC W2G

1099PATR 1099S 1098 1098E

1099MSA 1042S 1099B 1099DIV

1099INT 1099OID 1099R 1099Q

5498 1098T 5498MSA 1099LTC

W-2 Forms are filed to the Social Security Administration.

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NO MAJOR CHANGES TO THE W-2 OR 1099 MISC. FOR 2002

Form	Reprogramming	Changes
W-2	No Reprogramming Required	Minor backer changes.
W-3	No Reprogramming Required	Minor changes to instructions.
941Fed	Reprogramming Required	3rd party designee section added at the bottom of the form
1042S	No Reprogramming Required
1042T	Not released.
1096	Reprogramming Required	New box added - 1099Q.
1098	No Reprogramming Required	Minor backer changes.
1098E	No Reprogramming Required	Minor backer changes.
1098T	Major Reprogramming Required	4 boxes were added and 5 boxes have verbiage and/or number changes - also backer changes.
1099A	No Reprogramming Required	Minor backer changes.
1099B	No Reprogramming Required	Minor backer changes.
1099C	No Reprogramming Required	Minor backer changes.
1099 DIV	No Reprogramming Required	Minor backer changes.
1099G	Reprogramming Required	Form name changed, Box 5 changed and there are minor backer changes.
1099 INT	No Reprogramming Required	Minor backer changes.
1099 LTC	No Reprogramming Required	Minor backer changes.
1099 MSA	No Reprogramming Required	Form name changed. Minor backer changes.
1099 MISC	No Reprogramming Required	Minor backer changes.
1099 OID	No Reprogramming Required	Minor backer changes.
1099 PATR	No Reprogramming Required	Minor backer changes.
1099Q	New Form	Qualified Tuition Program Payments
1099R	No Reprogramming Required	Minor backer changes.
1099S	No Reprogramming Required	Minor backer changes.
5498	No Reprogramming Required	Form name changed. Boxes 7 & 11 changed to Coverdell ESA, minor backer changes.
5498 MSA	No Reprogramming Required	Form name changes. Minor backer changes.

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NO MAJOR PROGRAMMING FOR THE 2002 TAX FORMS
The following forms will require reprogramming:
1096, 1099G, and 1099Q (new form for 2002).

GUIDE TO INFORMATION RETURNS

Form Title What to report Amounts to Report Due Date

To IRS To Recipient
(Unless indicated
otherwise)

1042-S Foreign Person’s U.S. Source Income Subject to Withholding Payments subject to withholding under Chapter 3 of the Code, including interest, dividends, royalties, pensions and annuities, gambling winnings, and compensation for personal Service. All amounts, except $10 or more for interest on U.S. Deposits paid to Canadian nonresident aliens March 15 March 15

1098 Mortgage Interest Statement Mortgage interest (including points) you received in the course of your trade or business from individuals and reimbursements of overpaid interest. $600 or more February 28 (To Payer/
Statement Borrower) Jan 31

1098-E Student Loan Interest Statement Student loan interest received in the course of your trade or business. $600 or more February 28 January 31

1098-T Tuition Payments Statement Qualified tuition and related expenses, reimbursements or refunds, and scholarships or grants (optional). See Instructions February 28 January 31

1099-A Acquisition or Abandonment of Secured Property Information about the acquisition or abandonment of property that is security for a debt for which you are the lender. All amounts February 28 (To Borrower)
January 31

1099-B Proceeds From Broker and Barter Exchange Transactions Sales or redemptions of securities, futures transactions, commodities, and barter exchange transactions. All amounts February 28 January 31

1099-C Cancellation of Debt Cancellation of a debt owed to a financial institution, the Federal Government, a credit union, RTC, FDIC, NCUA, a military department, the U.S. Postal Service, the Postal Rate Commission or any organization having a significant trade or business of which is lending money. $600 or more February 28 January 31

1099-DIV Dividends and Distributions Distributions, such as dividends, capital gain distributions, or non-taxable distributions, that were paid on stock. and liquidation distributions. $10 or more, except $600 or more for liquidations February 28 January 31

1099-G Certain Government Payments Unemployment compensation, state and local income tax refunds, agricultural payments. $10 or more for refunds and unemployment; $600 or more for all others February 28 January 31

1099-lNT Interest Income Interest income. $10 or more ($600
or more in some cases) February 28 January 31

1099-LTC Long-Term Care and Accelerated Death Benefits Payments under a long-term care insurance contract and accelerated death benefits paid under a life insurance contract or by a viatical settlement provider. All amounts February 28 January 31
(To Insured and
Policyholder)

1099-MISC Miscellaneous Income
(Also, use this form to report the occurrence of direct sales of $5,000 or more of consumer goods for resale.)

Rent or royalty payments; prizes and awards that are not for services, such as winnings on TV or radio shows. $600 or more, except $10 or more for royalties

Payments to crew numbers by owners or operators of fishing boats including payments of proceeds from sale of catch. All amounts

Payments to a physician, physicians’ corporation, or other supplier of health and medical services. Issued mainly by medical assistance programs or health and
accident insurance plans. $600 or more

Payments for Services performed for a trade or business by people not treated as its employees. Examples: fees to subcontractors or directors, and golden parachute payments. $600 or more

Fish purchases paid in cash for resale. $600 or more

Substitute dividend and tax-exempt interest payments reportable by brokers. $10 or more

Crop insurance proceeds. $600 or more

Gross proceeds paid to attorneys. All amounts

February 28 January 31

1099-MSA Distributions from an Archer MSA or Medicare + Choice MSA. Distributions from a medical savings account (MSA) or Medicare + Choice MSA All amounts February 28 January 31

1099-OlD Original Issue Discount Original issue discount. $10 or more February 28 January 31

1099-PATR Taxable Distributions Received From Cooperatives Distributions from cooperatives to their patrons. $10 or more February 28 January 31

1099Q Qualified State Tuition Program Payments Taxable grants and earnings from a qualified state tuition program (QSTP) Any amount for a QSTP February 28 January 31

1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,
Insurance Contracts. etc. Distributions from retirement or profit-sharing plans, any IRA, or insurance contracts and IRA recharacterizations. $10 or more February 28 January 31

1099-S Proceeds From Real Estate Transactions1 Gross proceeds from the sale or exchange of real estate. Generally, $600 or more February 28 January 31

5498 IRA Coverdell ESA Contribution Information Contributions (including rollover contributions) to any individual retirement arrangement (IRA) including a SEP, SIMPLE, Roth IRA, and Ed IRA, Roth conversions; IRA recharacterizations; and the fair market value of the account. All amounts May 31 (To Participant) For value of account and for education IRA contributions January 31; for all other contributions, May 31

5498-MSA Archer MSA or Medicare + Choice MSA information Contributions to a Medical Savings Account (MSA) and the fair market value of an MSA or Medicare + CHoice MSA. All Amounts May 31 To Participant
May 31

W-2G Certain Gambling Winnings Gambling winnings from horse racing, dog racing, jai alai, lotteries, keno, bingo, slot machines, sweepstakes, and wagering pools, etc. Generally, $600 or more; $1,200 or more from bingo or slot machines; $1,500 or more from keno February 28 January 31

W-2 Wage and Tax Statement Wages, tips, other compensation; social security, Medicare, withheld income taxes and advance earned income credit (EIC) payments. Include bonuses, vacation allowances, severance pay, certain moving expense payments, some kinds of travel allowances, and third-party payments of sick Pay. See separate instructions TO SSA TO RECIPIENT

Last day of February January 31

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