Frequently Asked Questions
on Magnetic Media W-2s

Q. How and when will the MMREF instruction booklets be distributed?

A. The MMREF-1 and MMREF-2 instruction booklets will be distributed to participants around the beginning of October for the next tax year. MMREF instructions are also available on the Internet or may be obtained by calling 1-800-772-6270. Submitters who filed Magnetic Media or electronically in TY 2003 will automatically be mailed a copy around October 2004.

Q. Where can I get information about reporting Copy A Form W-2 information on Magnetic Media?

A. SSA publishes the MMREF booklet which contains the specifications and procedures for filing Form W-2 information on magnetic tape and diskette with SSA.

Q. I have never filed on Magnetic Media before. I don't know who to talk to about programming my computer for this function. Any suggestions?

A. If you are programming your own computer, you should first download the MMREF format and instructions to see what requirements your Magnetic Media reports must meet. You can also get the MMREF format and instructions by calling 800-772-6270.

Q. Do I have to get approval or pre-authorization to file on Magnetic Media?

A. No. Read SSA's MMREF publication to determine system compatibility of your Magnetic Media report with SSA's processing system.

Q. Is it mandatory that I submit Copy A Form W-2 information on Magnetic Media?

A. Magnetic Media/Electronic Wage reporting of W-2 information is mandatory for employers reporting 250 or more W-2s.

Q. Can I file my W-2s on Magnetic Media even though I have fewer than the mandatory requirement of 250 or more W-2s?

A. Yes. If you have fewer than 250 W-2s, you may elect to file your W-2s either on paper or on Magnetic Media/electronic filing. However, we encourage filing online or electronically.

Q. I filed my W-2s on Magnetic Media last year, but have fewer than 250 W-2s this year. Can I file my W-2s on paper this year without penalty or am I obligated to continue reporting on Magnetic Media?

A. You are not obligated to continue reporting on Magnetic Media unless you meet the mandatory requirement of filing on Magnetic Media by having 250 or more W-2s. However, we encourage all employers to file on Magnetic Media or electronically.

Q. I keep two payroll systems. One is for my production employees and one is for my management staff. Can I keep them separate on my W-2 Magnetic Media report?

A. Yes. See the record sequence in Appendix C in the MMREF publication for instructions and examples. Also, though SSA would prefer both payrolls be on a single Magnetic Media file, you may submit separate files for each payroll.

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Test Files

Q. I am using new software to prepare my Magnetic Media W-2 report. I would like SSA to test it before I send in my file. Can I do this?

A. SSA provides free software to test the format of your MMREF file. Accuwage software is used for W-2 (MMREF-1) and AccuW2c for W-2c (MMREF-2).

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Paper W-2 Forms and Magnetic Media Reports

Q. Can both paper and Magnetic Media W-2s be sent to SSA for the same tax year?

A. Yes. Even if you are required to file W-2s on Magnetic Media, you may still send up to 250 W-2s on paper, without penalty. DO NOT SEND PAPER W-2s ALONG WITH YOUR MAGNETIC MEDIA FILE. Paper W-2s are sent to SSA's Data Operations Center in Wilkes-Barre, Pennsylvania. Magnetic Media files are sent to SSA's Metro West Building in Baltimore, Maryland. (CAUTION: Do not file the same data on both paper W-2s and Magnetic Media.) SSA strongly encourages all users to file Magnetic Media or electronically.

Q. I am comparing the output of my W-2 Magnetic Media report with the paper W-2s I give to my employees. I can't find where some of the information I put on the paper W-2s appears on the Magnetic Media. What am I missing?

A. The paper W-2s include information that your employees need to prepare their tax return but which is not required in the report you send to SSA. Follow the MMREF-1 and the IRS "Instructions for Form W-2" when you are completing your Magnetic Media report.

Q. After preparing the W-2 forms to give to my employees, what do I do with the Copy A of the paper W-2s if I send my wage reports to SSA on Magnetic Media?

A. If you send W-2 reports on Magnetic Media, you may discard Copy A or keep it for your records. Do not send it to SSA since it could result in duplicate postings to SSA's records and a penalty from IRS for incorrect reporting. You may want to consider buying special W-2 sets without the Copy A or using a free-form W-2 rather than the preprinted standard W-2 form. Contact the IRS for specifications (Pub. 1141).

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How and Where to Send Magnetic Media Wage Reports

Q. When I mail my Magnetic Media report, do I have to include any paperwork?

A. Yes. If you are using the MMREF format and submitting a tape or cartridge only, you must include a Form 6559 transmittal sheet and, if needed, a Form 6559-A continuation sheet. If you submit more than one Magnetic Media file, you must prepare a separate Form 6559 for each file. The continuation sheet, Form 6559-A, is used only when you have more than two employers on the same file. For diskette submissions, do not send any transmittals or forms.

Q. Where can I obtain copies of the Forms 6559/6559-A?

A. There are copies in the paper version of the MMREF which can be photocopied. These forms are also available on SSA's Forms & Publications webpage. Facsimiles of these forms may be used, provided that all of the information required on the official document is clearly displayed on the facsimile.

Q. Where do I send my Magnetic Media report of W-2s?

A. For information on where to send Magnetic Media reports, visit SSA's Where to File webpage.

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Extensions and Waivers

Q. What if I meet the mandatory requirement for filing W-2s on Magnetic Media, but I cannot produce a Magnetic Media file which is compatible with SSA's processing system?

A. There are many commercial software vendors who produce programs to create W-2 reports on Magnetic Media or prepare Magnetic Media wage reports for employers. Vendors are listed in the telephone directory under "Computer Software and Services" or "Payroll Preparation Services." SSA also provides a list of some of these vendors on the Vendor List webpage. You may also file electronically.

Q. What can I do if it looks like I may not be able to file my W-2 report timely?

A. If it is earlier than 45 days before the W-2 filing due date (by the first business day after February 27, or after February 28 if a leap year), you may be able to obtain a waiver from filing on Magnetic Media. Since the Internal Revenue Service, and not SSA, has the authority to grant waivers, file IRS Form 8508 with them. Form 8508 can be obtained by calling IRS at 1-800-829-3676, or by visiting the IRS website, www.irs.gov. If a waiver is not possible, you may request a service bureau of your choice to prepare a Magnetic Media file for you.

Q. Our office usually files W-2s on magnetic tape. Each year, however, we have to incorporate third party sick pay adjustments into our system at the last minute so they can be included in the regular wage report. Would it be acceptable if we submitted the third party sick pay information separately?

A. If you are increasing wage amounts previously reported, you can submit separate W-2s showing the sick pay amounts. You must make sure not to repeat any money amounts that were on the original W-2. If you have 250 or more of these "adjustments," you must submit them on Magnetic Media or electronically. If you are decreasing amounts previously reported, you must submit W-2cs.

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Penalties

Q. I submitted 310 paper W-2s to SSA for processing. I didn't realize I should have filed them on Magnetic Media. Will I be penalized?

A. IRS, not SSA, has the authority to assess penalties. IRS assesses penalties of $50 for every W-2, in excess of 250, sent on paper.

Q. If my W-2 Magnetic Media file is submitted after the filing due date, will I be penalized?

A. Although you file your W-2 report with SSA, if your report is late and you were not granted an extension of the filing due date, IRS may impose a late filer's penalty. If a penalty is assessed, IRS will usually notify you about one year from the filing due date. IRS Circular E and instructions for Form W-2 have more information on penalties.

Q. Our original Magnetic Media data file, which was filed timely, was returned by SSA as unable to process along with a notice of error and a number to call for assistance. Will we be subject to a late penalty since our report was not processed?

A. If you resubmit the file for processing and it is received by SSA within 45 days of the date of the notice you received, you will not be subject to an IRS late filing penalty.

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Corrections

Q. Our firm filed on Magnetic Media and we have now discovered that some reports had mistakes. What can we do to correct those reports?

A. If you have 250 or more W-2cs, these must be filed on Magnetic Media. Refer to the IRS website (www.irs.gov) and look under Instructions for Forms W-2c/W-3c. You can order Forms W-2c and W-3c from the IRS by calling 1-800-829-3676.

To make the corrections on Magnetic Media, you must use the special MMREF-2 format, which can be obtained from the Employer Service Liaison Officer (ESLO) for your State.

Q. I have 275 W-2c (corrections) to file. Must I file them on Magnetic Media?

A. Yes. If you expect to file 250 or more W-2cs (Statement of Corrected Income and Tax Amounts) during a calendar year, you are now required to file them electronically or on magnetic tape, cartridge, or diskette (W-2cs for years before 2002 are not counted for purposes of the new threshold.) Submitters must follow the formatting specifications in SSA's MMREF-2.

Q. I am a State, Local or Federal government employer making a correction with the following conditions:

• The correction is for Tax Year 1991, or later, and
• MQGE/Medicare wages and full Social Security Wages are involved, and
• I only need to correct Social Security Wages and/or Social Security Tips, and
• There is no change to the total MQGE/Medicare wages and tips previously reported.

A. In addition to correcting the Social Security Wages and/or Social Security Tips, for an employee previously reported for MQGE/Medicare you must show the TOTAL MQGE/Medicare wages previously reported in both the original and correct Medicare wages/tips items - even though there is no change to the Medicare wages/tips previously reported.

Q. We have an employee who returned to employment following military service, and makeup amounts were contributed to a pension plan for a prior year(s) under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The paper form W-2 provides for optional itemized reporting of makeup contributions by pension plan year. How should I report the makeup contributions in the MMREF-1 code RW record?

A. The MMREF-1 format does not provide for itemized reporting of makeup contributions. Report the sum of makeup and current year pension plan contributions in the appropriate field.

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