# Bulletin No. 2023–31

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URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A2a404aa145a0952f

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2023–31
July 31, 2023

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

ADMINISTRATIVE
Rev. Proc. 2023-25, page 386.

This revenue procedure provides specifications for the private printing of red-ink substitutes for the 2023 Forms W-2
and W-3. This revenue procedure will be produced as the
next revision of Publication 1141. Rev. Proc. 2022-30 is
superseded.

EMPLOYEE PLANS / EXCISE TAX
Notice 2023-54, page 382.

The notice provides transition relief in connection with the
change to the required beginning date of required minimum
distributions (RMDs) from IRAs and employer plans pursuant
to section 107 of the SECURE 2.0 Act of 2022, enacted
on December 29, 2022, as Division T of the Consolidated
Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459
(2022). In addition, this notice provides guidance related to
certain provisions of section 401(a)(9) that apply for 2021,
2022, and 2023, and the related excise tax under section
4974. Finally, the notice announces that the final regulations
intended to be published relating to RMDs will apply for purposes of determining RMDs for calendar years beginning no
earlier than 2024.

EXEMPT ORGANIZATIONS
Announcement 2023-21, page 412.

Revocation of IRC 501(c)(3) Organizations for failure to meet
the code section requirements. Contributions made to the

Finding Lists begin on page ii.

organizations by individual donors are no longer deductible
under IRC 170(b)(1)(A).

INCOME TAX
T.D. 9977, page 375.

Section 2303 of the “Coronavirus Aid, Relief, and Economic
Security Act,” Pub. L. No. 116-136, 134 Stat. 281 (March
27, 2020) (the “CARES Act”), amended the carryback provisions related to net operating losses. As a result of the CARES
Act amendments, which specifically extended the carryback
period for certain net operating losses, temporary regulations
were issued on July 2, 2020, permitting certain acquiring
consolidated groups to elect to waive all or a portion of the
pre-acquisition portion of the extended carryback period under
section 172 for certain losses attributable to certain acquired
members. These final regulations adopt without substantive
change those temporary regulations.

Announcement 2023-17, page 411.

Rev. Proc. 2023-3, 2023-1 I.R.B. 144 (January 3, 2023) contains an error in the second 2022-19, 2022-42 I.R.B. 282, is
superseded. However, Rev. Proc. 2022-19, 2022-42 I.R.B.
282 remains in effect and is not superseded. Section 7 is
corrected to read, “Rev. Proc. 2022-3, 2022-1 I.R.B. 144,
is superseded. Rev. Proc. 2022-28, 2022-27 I.R.B. 65, is
superseded.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.

Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

July 31, 2023 

Bulletin No. 2023–31

Part I
26 CFR 1.1502-21: Carryback of Consolidated Net
Operating Losses

T.D. 9977
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
Carryback of Consolidated
Net Operating Losses
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations; removal of
temporary regulations.
SUMMARY: This document contains final
regulations that affect corporations filing
consolidated returns. These regulations permit consolidated groups that acquire new
members that were members of another
consolidated group to elect in a year subsequent to the year of acquisition to waive all
or part of the pre-acquisition portion of the
carryback period for certain losses attributable to the acquired members where there is
a retroactive statutory extension of the net
operating loss (NOL) carryback period. This
document finalizes certain provisions in
proposed regulations that were published on
July 8, 2020, and removes temporary regulations published on the same date.
DATES: Effective date: These final regulations are effective on July 10, 2023.
Applicability date: For the date of
applicability, see §1.1502-21(h)(9).
FOR FURTHER INFORMATION
CONTACT: Stephen R. Cleary at (202)
317-5353 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
I. Overview
This Treasury decision amends the
Income Tax Regulations (26 CFR part 1)

Bulletin No. 2023–31

under section 1502 of the Internal Revenue
Code (Code). Section 1502 authorizes the
Secretary of the Treasury or her delegate
(Secretary) to prescribe regulations for
an affiliated group of corporations that
join in filing (or that are required to join
in filing) a consolidated return (consolidated group, as defined in §1.1502-1(h))
to clearly reflect the Federal income tax
liability of the consolidated group and
to prevent avoidance of such tax liability. For purposes of carrying out those
objectives, section 1502 also permits the
Secretary to prescribe rules that may be
different from the provisions of chapter 1
of the Code that would apply if the corporations composing the consolidated group
filed separate returns. Terms used in the
consolidated return regulations generally
are defined in §1.1502-1.
On July 8, 2020, the Department of
the Treasury (Treasury Department) and
the IRS published a notice of proposed
rulemaking (REG-125716-18) in the
Federal Register (85 FR 40927) under
section 1502 (2020 proposed regulations).
The 2020 proposed regulations provided
guidance that, in part, implemented
amendments to section 172 under Public
Law 115-97, 131 Stat. 2054 (Dec. 22,
2017), commonly known as the Tax Cuts
and Jobs Act (TCJA), and the Coronavirus
Aid, Relief, and Economic Security Act
(CARES Act), Public Law 116-136, 134
Stat. 281 (Mar. 27, 2020). Specifically, the
2020 proposed regulations provided guidance for consolidated groups regarding
(i) the application of the 80-percent limitation in section 172(a)(2), as originally
enacted as part of the TCJA and subsequently amended by the CARES Act, and
(ii) the absorption of NOL carrybacks and
carryovers.
In connection with the 2020 proposed
regulations, the Treasury Department and
the IRS published on the same date temporary regulations (TD 9900) in the Federal
Register (85 FR 40892) under section
1502 (2020 temporary regulations). The
Treasury Department and the IRS issued
the 2020 temporary regulations to provide
guidance to consolidated groups regarding the application of the NOL carryback
rules under section 172(b), as amended by
(i) section 2303(b) of the CARES Act, and

375

(ii) any similar future statutory amendments to section 172. Specifically, if there
is a retroactive statutory extension of the
NOL carryback period under section 172
(retroactive statutory extension), the 2020
temporary regulations permit consolidated groups that, before the enactment
of the retroactive statutory extension,
acquired new members that were members of another consolidated group to elect
to waive, in a taxable year subsequent to
the taxable year of the acquisition, all or
part of the pre-acquisition portion of the
carryback period for consolidated net
operating losses (CNOLs) attributable to
the acquired members. The preamble to
the 2020 temporary regulations includes
a background discussion of the rules
regarding NOL carrybacks and carryovers
under section 172 and the related consolidated return regulations. Part II of this
Background describes the 2020 temporary
regulations in greater detail.
A correction to the 2020 temporary
regulations was published in the Federal
Register (85 FR 53162) on August 28,
2020. The text of the 2020 temporary regulations also serves as the text of §1.150221(b)(3)(ii)(C) and (D) of the 2020
proposed regulations.
The 2020 proposed regulations, other
than proposed §1.1502-21(b)(3)(ii)(C)
and (D), were adopted as final regulations
on October 27, 2020. See TD 9927 (85 FR
67966).
The IRS received one comment in
response to the 2020 temporary regulations. A copy of the comment is available
for public inspection at https://www.regulations.gov (type IRS-2020-0020 in the
search field on the https://www.regulations.gov homepage) or upon request. No
public hearing was requested or held.
As described in greater detail in the
Summary of Comment and Explanation of
Revisions, the Treasury Department and
the IRS have considered the commenter’s
recommendations and concluded that their
adoption would necessitate conforming
changes to the split-waiver election provisions set forth in §1.1502-21(b)(3)(ii)
(B) (general split-waiver election), which
are beyond the scope of this guidance.
Therefore, the Treasury Department and
the IRS have determined that, aside from

July 31, 2023

non-substantive revisions to incorporate
the rules regarding retroactive statutory
extensions into §1.1502-21(b), improve
readability, and make other perfecting
edits, §1.1502-21(b)(3)(ii)(C) and (D)
of the 2020 proposed regulations should
be adopted as final regulations without
change, and that the 2020 temporary regulations should be removed. The Treasury
Department and the IRS continue to study
the commenter’s recommendations for
purposes of potential future guidance.
II. 2020 Temporary Regulations
On prior occasions, enacted legislation
has amended section 172 to retroactively
extend the carryback period for NOLs. See
Worker, Homeownership, and Business
Assistance Act of 2009, Public Law 11192, 123 Stat. 2984 (November 6, 2009);
Job Creation and Worker Assistance Act
of 2002, Public Law 107-147, 116 Stat. 21
(March 9, 2002). Most recently, section
2303(b) of the CARES Act added section
172(b)(1)(D) to the Code. Section 172(b)
(1)(D) requires (in the absence of a waiver
under section 172(b)(3)) a five-year carryback period for an NOL that arises in a
taxable year beginning after December 31,
2017, and before January 1, 2021.
Such retroactive statutory extensions
of NOL carryback periods uniquely
impact a consolidated group (acquiring group) that acquires one or more
corporations (acquired member) before
the enactment of the retroactive statutory extension of the carryback period.
During the past two decades, the Treasury
Department and the IRS have provided
an acquiring group with certain additional elections for waiving carrybacks
of losses into another consolidated group
of which an acquired member previously
was a member (former group). See 75 FR
35643 (June 23, 2010) (2010 split-waiver
regulations); 67 FR 38000 (May 31, 2002)
(2002 split-waiver regulations). These
additional elections, while responsive
to particular retroactive statutory extensions, have reflected common policy
objectives of providing affected groups
with the ability to waive all or a portion
of the NOL carryback period of acquired
members extended by retroactive statutory extensions applicable before, but
enacted after, the acquisition(s).

July 31, 2023

The Treasury Department and the IRS
determined that it is appropriate to provide similar rules with regard to the NOL
carryback rules retroactively amended by
section 2303(b) of the CARES Act in particular, or by future legislation enacting
retroactive statutory amendments to NOL
carryback rules more generally. Therefore,
the 2020 temporary regulations provided
principle-based rules, referred to in these
regulations as “amended carryback rules,”
applicable to CNOLs arising in taxable
years to which amended carryback rules
become applicable after the acquisition of
a member. Under these rules, an acquiring group possesses the opportunity to
waive, on a taxable-year-by-taxable-year
basis, all or a portion of the carryback
period with regard to CNOLs attributable
to acquired members for pre-acquisition
years during which the acquired members
were members of a former group.
The 2020 temporary regulations provide two types of split-waiver elections
for consolidated groups that (i) include
one or more acquired members, and (ii)
have CNOLs that, under amended carryback rules, become eligible to be carried
back for a greater number of years than
under statutory law in effect at the time of
the acquisition (default carryback period).
One type of election (amended statute
split-waiver election) permits an acquiring group to relinquish that part of the carryback period during which an acquired
member was a member of a former group
(for the portion of a CNOL attributable
to the acquired member), even though
the acquiring group did not file a splitwaiver election for the year in which the
acquired member became a member of the
acquiring group (as required by §1.150221(b)(3)(ii)(B)). See §1.1502-21T(b)(3)
(ii)(C)(2)(v). The other type of election
(extended split-waiver election) applies
solely to the extended carryback period
(that is, the additional carryback years
provided under amended carryback rules).
Through an extended split-waiver election, an acquiring group can ensure that
amended carryback CNOLs are carried
back to taxable years of former groups
only to the extent those losses would have
been carried back under prior law (that is,
limiting CNOL carrybacks to the default
carryback period). See §1.1502-21T(b)(3)
(ii)(C)(2)(ix). These two additional types

376

of split-waiver elections provide relief,
and are subject to conditions and procedures, consistent with the applicable splitwaiver elections set forth in the 2002 and
2010 split-waiver regulations.
Summary of Comment and
Explanation of Revisions
The Treasury Department and the IRS
received one comment that recommended
two changes to the split-waiver election
provisions set forth in the 2020 temporary
regulations (2020 split-waiver elections).
As discussed in the preamble to the
2020 temporary regulations, a general
split-waiver election and the 2020 splitwaiver elections may be made only with
respect to the portion of the carryback
period for which the acquired member
was a member of a former group. Thus,
such an election would not be effective
with respect to any portion of the carryback period during which the acquired
member was a stand-alone corporation.
The commenter recommended that splitwaiver elections be available whenever
a portion of a CNOL attributable to an
acquired member would be carried back
to a separate return year, regardless of
whether the acquired member was a member of a former group or a stand-alone corporation in that carryback year.
The commenter also suggested that,
although the rules governing split-waiver
elections are too narrow insofar as they
exclude acquisitions of stand-alone corporations, such rules also are too broad
insofar as they apply to situations in which
the acquired member was the common
parent of a former group (whole-group
acquisitions). See §1.1502-21(b)(3)(ii)(B)
(allowing the acquiring group to make a
general split-waiver election with respect
to the portion of the carryback period for
which the acquired member was “a member of another group”); §1.1502-21T(b)(3)
(ii)(C)(2)(v) and (ix) (allowing the acquiring group to make a 2020 split-waiver
election with respect to the portion of the
carryback period for which the acquired
member was “a member of any former
group”); §1.1502-1(b) (defining the term
“member” to include the common parent
of the group).
For example, assume that P is the common parent of Group 1 in Years 1 and 2. At

Bulletin No. 2023–31

the beginning of Year 3, Group 2 acquires
all the stock of P. In Year 6, Group 2 incurs
a CNOL, a portion of which is attributable
to P. In Year 7, Congress amends section
172 by extending the carryback period
for NOLs arising in Year 6 to five years.
Group 2 would be eligible to make either
a general split-waiver election (if it filed
the requisite statement with its Federal
income tax return for Year 3) or one
of the 2020 split-waiver elections. The
commenter contended that a split-waiver
election should not be available in such a
situation because disputes regarding NOL
carrybacks should not arise between the
former group and the acquiring group
(which controls the former group after the
acquisition).
The changes recommended by the
commenter, if adopted, would necessitate revisions not only to the 2020 splitwaiver elections, but also to the general
split-waiver election provisions in
§1.1502-21(b)(3)(ii)(B). Both the general
split-waiver election and the 2020 splitwaiver elections may be made only with
respect to the portion of the carryback
period for which the acquired member was
a member of a former group. Moreover,
both the general split-waiver election and
the 2020 split-waiver elections may apply
to situations in which the acquired member was the common parent of a former
group (that is, whole-group acquisitions).
Consequently, after considering the comment, the Treasury Department and the
IRS have determined that the scope of
the changes suggested by the commenter
exceed the scope of §1.1502-21(b)(3)
(ii)(C) and (D) of the 2020 proposed
regulations.
Thus, as noted in part I of the
Background, the Treasury Department

and the IRS have concluded that the
split-waiver election provisions provided
by the 2020 proposed regulations should
be adopted without substantive change.
The Treasury Department and the IRS
continue to study the commenter’s recommendations for purposes of potential
future guidance. Accordingly, the final
regulations contained in this Treasury
decision adopt the provisions of §1.150221(b)(3)(ii)(C) and (D) of the 2020 proposed regulations without substantive
change.
Although no substantive changes are
made to the rules of §1.1502-21(b)(3)
(ii)(C) and (D) of the 2020 proposed
regulations, the final regulations make
the following non-substantive changes
to incorporate those rules into §1.150221(b) and to improve readability: (1) the
provisions of §1.1502-21(b)(3)(ii)(A)
have been redesignated as §1.1502-21(b)
(3)(ii); (2) the provisions of §1.150221(b)(3)(ii)(B) have been redesignated
as §1.1502-21(b)(4); (3) the provisions
of §1.1502-21(b)(3)(ii)(C) and (D) of
the 2020 proposed regulations have
been redesignated as §1.1502-21(b)(5)
and (6); (4) the provisions of §1.150221(b)(3)(iii) have been redesignated as
§1.1502-21(b)(7); (5) the provisions of
§1.1502-21(b)(3)(iv) and (v) have been
removed; and (6) corresponding perfecting edits have been made.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum
of Agreement, Review of Treasury
Regulations under Executive Order 12866
(June 9, 2023), tax regulatory actions

issued by the IRS are not subject to the
requirements of section 6(b) of Executive
Order 12866, as amended. Therefore,
a regulatory impact assessment is not
required.
II. Paperwork Reduction Act
The collections of information in these
final regulations are in §1.1502-21(b)
(5)(v)(A) and (B). The information is
required to inform the IRS on whether,
and to what extent, an acquiring group
makes either of the elections described in
these final regulations.
The collection of information provided by these final regulations has been
approved by the Office of Management
and Budget (OMB) under control number 1545-0123. For purposes of the
Paperwork Reduction Act, 44 U.S.C. 3501
et seq. (PRA), the reporting burden associated with the collection of information
in Form 1120, U.S. Corporation Income
Tax Return, will be reflected in the PRA
Submission associated with OMB control
number 1545-0123.
In general, if the acquiring group makes
an election under §1.1502-21(b)(5), the
acquiring group is required to attach a separate statement to its Form 1120 as provided in §1.1502-21(b)(5)(v)(A) and (B),
respectively. This statement must be filed
as provided in §1.1502-21(b)(5)(vi).
The following table displays the number of respondents estimated to be required
to report on Form 1120 with respect to the
collections of information required by
these final regulations. Due to the absence
of historical tax data, direct estimates of
the number of respondents required to
attach a statement to other types of tax
returns, as applicable, are not available.

Number of Respondents (Estimated)
Amended Statute Split-Waiver Election & Extended Split-Waiver Election
Form 1120

17,500

Source: RAAS:CDW
The numbers of respondents in the
table were estimated by the Research,
Applied Analytics, and Statistics Division
(RAAS) of the IRS from the Compliance
Data Warehouse (CDW). Data for Form
1120 represents estimates of the total

Bulletin No. 2023–31

number of taxpayers that may attach an
election statement to their Form 1120 to
make the elections in §1.1502-21(b)(5)(v)
(A) and (B).
It is estimated that 17,500 consolidated entities will be required to attach

377

a statement under these final regulations.
The burden estimates associated with
the information collections in these final
regulations are included in aggregated
burden estimates for the OMB control
number 1545-0123. The burden estimates

July 31, 2023

provided in the OMB control numbers in
the following table are aggregate amounts
that relate to the entire package of forms
associated with the OMB control number, and will in the future include, but
not isolate, the estimated burden of those

Form
Form 1120

Type of Filer
Corporation

information collections associated with
these final regulations. To guard against
over-counting the burden that consolidated tax provisions imposed prior to
§1.1502-21, the Treasury Department
and the IRS urge readers to recognize that

these burden estimates have also been
cited by regulations that rely on the applicable OMB control numbers in order to
collect information from the applicable
types of filers.

OMB Number(s)
1545-0123

Status
Published in the Federal Register on 12/22/2022. Public Comment
period closed on 01/19/2023. Approved by OMB through 12/31/2023.
Link: https://www.federalregister.gov/documents/2022/12/20/2022-27628/
comment-request-us-business-income-tax-returns

Source: RAAS:CDW
III. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. chapter 6), it is hereby
certified that this rulemaking will not
have a significant economic impact on
a substantial number of small entities
within the meaning of section 601(6) of
the Regulatory Flexibility Act. This certification is based on the fact that these
final regulations apply only to corporations that file consolidated Federal
income tax returns, and that such corporations almost exclusively consist of
larger businesses. Specifically, based on
data available to the IRS, corporations
that file consolidated Federal income
tax returns represent only approximately
two percent of all filers of Forms 1120,
U.S. Corporation Income Tax Return.
However, these consolidated Federal
income tax returns account for approximately 95 percent of the aggregate
amount of receipts provided on all Forms
1120. Therefore, these final regulations
will not create additional obligations for,
or impose an economic impact on, small
entities, and a regulatory flexibility analysis under the Regulatory Flexibility Act
is not required.
IV. Section 7805(f)
Pursuant to section 7805(f) of the
Code, the notice of proposed rulemaking
that preceded these final regulations was
submitted to the Chief Counsel for the
Office of Advocacy of the Small Business
Administration for comment on its impact
on small business. No comments on that

July 31, 2023

notice of proposed rulemaking were
received from the Chief Counsel for the
Office of Advocacy of the Small Business
Administration.
V. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 requires that agencies
assess anticipated costs and benefits and
take certain other actions before issuing a
final rule that includes any Federal mandate that may result in expenditures in
any one year by a State, local, or Tribal
government, in the aggregate, or by the
private sector, of $100 million in 1995
dollars, updated annually for inflation.
These final regulations do not include any
Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of
that threshold.
VI. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on State and local governments, and is not required by statute,
or preempts State law, unless the agency
meets the consultation and funding
requirements of section 6 of the Executive
order. These final regulations do not have
federalism implications, do not impose
substantial direct compliance costs on
State and local governments, and do not
preempt State law within the meaning of
the Executive order.

378

VII. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office
of Management and Budget’s Office of
Information and Regulatory Affairs has
designated this rule as not a “major rule,”
as defined by 5 U.S.C. 804(2).
Drafting Information
The principal author of these final regulations is Stephen R. Cleary of the Office
of Associate Chief Counsel (Corporate).
However, other personnel from the
Treasury Department and the IRS participated in their development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
26 CFR Part 602
Reporting
requirements.

and

recordkeeping

Adoption of Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 602
are amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:

Bulletin No. 2023–31

Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.1502-21 is amended
by:
1. Removing the language “paragraph
(b)(3)(iii)” in paragraph (b)(2)(iii) and
adding the language “paragraph (b)(7)” in
its place.
2. Revising paragraph (b)(3).
3. Adding paragraphs (b)(4) through
(7).
4. Removing the language “(b)(3)(ii)
(B)” in paragraph (h)(5) and adding the
language “(b)(4)” in its place.
5. Revising paragraph (h)(9).
The additions and revisions read as
follows:
§1.1502-21 Net operating losses.
*****
(b) * * *
(3) Election to relinquish entire carryback period—(i) In general. A group
may make an irrevocable election under
section 172(b)(3) to relinquish the entire
carryback period with respect to a CNOL
for any consolidated return year. Except
as provided in paragraphs (b)(4) and (5)
of this section, the election may not be
made separately for any member (whether
or not it remains a member), and must be
made in a separate statement titled “THIS
IS AN ELECTION UNDER §1.150221(b)(3)(i) TO WAIVE THE ENTIRE
CARRYBACK PERIOD PURSUANT
TO SECTION 172(b)(3) FOR THE [insert
consolidated return year] CNOLs OF THE
CONSOLIDATED GROUP OF WHICH
[insert name and employer identification number of common parent] IS THE
COMMON PARENT.” The statement
must be filed with the group’s income tax
return for the consolidated return year in
which the loss arises. If the consolidated
return year in which the loss arises begins
before January 1, 2003, the statement
making the election must be signed by the
common parent. If the consolidated return
year in which the loss arises begins after
December 31, 2002, the election may be
made in an unsigned statement.
(ii) Groups that include insolvent
financial institutions. For rules applicable to relinquishing the entire carryback
period with respect to losses attributable
to insolvent financial institutions, see
§301.6402-7 of this chapter.

Bulletin No. 2023–31

(4) General split-waiver election. If
one or more members of a consolidated
group becomes a member of another consolidated group, the acquiring group may
make an irrevocable election to relinquish, with respect to all consolidated net
operating losses attributable to the member, the portion of the carryback period
for which the corporation was a member of another group, provided that any
other corporation joining the acquiring
group that was affiliated with the member
immediately before it joined the acquiring group is also included in the waiver.
This election is not a yearly election and
applies to all losses that would otherwise
be subject to a carryback to a former
group under section 172. The election
must be made in a separate statement
titled “THIS IS AN ELECTION UNDER
§1.1502-21(b)(4) TO WAIVE THE PRE[insert first taxable year for which the
member (or members) was not a member of another group] CARRYBACK
PERIOD FOR THE CNOLs attributable
to [insert names and employer identification number of members].” The statement must be filed with the acquiring
consolidated group’s original income tax
return for the year the corporation (or
corporations) became a member. If the
year in which the corporation (or corporations) became a member begins before
January 1, 2003, the statement must be
signed by the common parent and each
of the members to which it applies. If the
year in which the corporation (or corporations) became a member begins after
December 31, 2002, the election may be
made in an unsigned statement.
(5) Split-waiver elections to which
amended carryback rules apply—(i) In
general. An acquiring group may make
either (but not both) an amended statute split-waiver election or an extended
split-waiver election with respect to a
particular amended carryback CNOL.
These elections are available only if the
statutory amendment to the carryback
period referred to in paragraph (b)(5)(ii)
(D) of this section occurs after the date of
acquisition of an acquired member. A separate election is available for each taxable
year to which amended carryback rules
apply. An acquiring group may make an
amended statute split-waiver election or
an extended split-waiver election only if

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the acquiring group, with regard to that
election—
(A) Satisfies the requirements in paragraph (b)(5)(iii) of this section; and
(B) Follows the procedures in paragraphs (b)(5)(v) and (vi) of this section, as
relevant to that election.
(ii) Definitions. The definitions provided in this paragraph (b)(5)(ii) apply for
purposes of paragraphs (b)(5) and (6) of
this section.
(A) Acquired member. The term
acquired member means a member of a
consolidated group that joins another consolidated group.
(B) Acquiring group. The term acquiring group means a consolidated group that
has acquired a former member of another
consolidated group (that is, an acquired
member).
(C) Amended carryback CNOL. The
term amended carryback CNOL means
the portion of a CNOL attributable to an
acquired member (determined pursuant
to paragraph (b)(2)(iv)(B) of this section)
arising in a taxable year to which amended
carryback rules apply.
(D) Amended carryback rules. The
term amended carryback rules means
the rules of section 172 of the Code after
amendment by statute to extend the carryback period for NOLs attributable to an
acquired member (determined pursuant to
paragraph (b)(2)(iv)(B) of this section).
(E) Amended statute split-waiver election. The term amended statute splitwaiver election means, with respect to any
amended carryback CNOL, an irrevocable election made by an acquiring group
to relinquish the portion of the carryback
period (including the default carryback
period and the extended carryback period)
for that loss during which an acquired member was a member of any former group.
(F) Amended statute split-waiver election statement. The term amended statute
split-waiver election statement has the
meaning provided in paragraph (b)(5)(v)
(A) of this section.
(G) Default carryback period. The
term default carryback period means the
NOL carryback period existing at the
time the acquiring group acquired the
acquired member, before the applicability
of amended carryback rules.
(H) Extended carryback period. The
term extended carryback period means

July 31, 2023

the additional taxable years added to a
default carryback period by any amended
carryback rules.
(I) Extended split-waiver election.
The term extended split-waiver election
means, with respect to any amended carryback CNOL, an irrevocable election
made by an acquiring group to relinquish
solely the portion of the extended carryback period (and no part of the default carryback period) for that loss during which
an acquired member was a member of any
former group.
(J) Extended split-waiver election
statement. The term extended split-waiver
election statement has the meaning provided in paragraph (b)(5)(v)(B) of this
section.
(K) Former group. The term former
group means a consolidated group of
which an acquired member previously
was a member.
(iii) Conditions for making an amended
statute split-waiver election or an
extended split-waiver election. An acquiring group may make an amended statute
split-waiver election or an extended splitwaiver election (but not both) with respect
to an amended carryback CNOL only if—
(A) The acquiring group has not filed
a valid election described in paragraph
(b)(4) of this section with respect to the
acquired member on or before the effective date of the amended carryback rules;
(B) The acquiring group has not filed a
valid election described in section 172(b)
(3) and paragraph (b)(3)(i) of this section
with respect to a CNOL of the acquiring
group from which the amended carryback CNOL is attributed to the acquired
member;
(C) Any other corporation joining the
acquiring group that was affiliated with
the acquired member immediately before
the acquired member joined the acquiring
group is included in the waiver; and
(D) A former group does not claim any
carryback (as provided in paragraph (b)
(5)(iv) of this section) to any taxable year
in the carryback period (in the case of an
amended statute split-waiver election) or
in the extended carryback period (in the
case of an extended split-waiver election)
with respect to the amended carryback
CNOL on a return or other filing filed on
or before the date the acquiring group files
the election.

July 31, 2023

(iv) Claim for a carryback. For purposes of paragraph (b)(5)(iii)(D) of this
section, a carryback is claimed with
respect to an amended carryback CNOL
if there is a claim for refund, an amended
return, an application for a tentative carryback adjustment, or any other filing that
claims the benefit of the NOL in a taxable
year prior to the taxable year of the loss,
whether or not subsequently revoked in
favor of a claim based on the period provided for in the amended carryback rules.
(v) Procedures for making an amended
statute split-waiver election or an extended
split-waiver election—(A) Amended statute split-waiver election. An amended
statute split-waiver election must be made
in a separate amended statute split-waiver
election statement titled “THIS IS AN
ELECTION UNDER SECTION 1.150221(b)(5)(i) TO WAIVE THE PRE-[insert
first day of the first taxable year for which
the acquired member was a member of the
acquiring group] CARRYBACK PERIOD
FOR THE CNOLS ATTRIBUTABLE
TO THE [insert taxable year of losses]
TAXABLE YEAR(S) OF [insert names
and employer identification numbers of
members]”. The amended statute splitwaiver election statement must be filed
as provided in paragraph (b)(5)(vi) of this
section.
(B) Extended split-waiver election. An
extended split-waiver election must be
made in a separate extended split-waiver
election statement titled “THIS IS AN
ELECTION UNDER SECTION 1.150221(b)(5)(i) TO WAIVE THE PRE-[insert
first day of the first taxable year for
which the acquired member was a member of the acquiring group] EXTENDED
CARRYBACK PERIOD FOR THE
CNOLS ATTRIBUTABLE TO THE
[insert taxable year of losses] TAXABLE
YEAR(S) OF [insert names and employer
identification numbers of members]”. The
extended split-waiver election statement
must be filed as provided in paragraph (b)
(5)(vi) of this section.
(vi) Time and manner for filing statement—(A) In general. Except as otherwise provided in paragraph (b)(5)(vi)
(B) or (C) of this section, an amended
statute split-waiver election statement or
extended split-waiver election statement
must be filed with the acquiring group’s
timely filed consolidated return (including

380

extensions) for the year during which the
amended carryback CNOL is incurred.
(B) Amended returns. This paragraph
(b)(5)(vi)(B) applies if the date of the filing required under paragraph (b)(5)(vi)
(A) of this section is not at least 150 days
after the date of the statutory amendment
to the carryback period referred to in paragraph (b)(5)(ii)(D) of this section. Under
this paragraph (b)(5)(vi)(B), an amended
statute split-waiver election statement or
extended split-waiver election statement
may be attached to an amended return filed
by the date that is 150 days after the date
of the statutory amendment referred to in
paragraph (b)(5)(ii)(D) of this section.
(C) Certain taxable years beginning
before January 1, 2021. This paragraph
(b)(5)(vi)(C) applies to taxable years
beginning before January 1, 2021, for
which the date of the filing required under
paragraph (b)(5)(vi)(A) of this section
precedes November 30, 2020. Under
this paragraph (b)(5)(vi)(C), an amended
statute split-waiver election statement or
extended split-waiver election statement
may be attached to an amended return
filed by November 30, 2020.
(6) Examples. The following examples
illustrate the rules of paragraph (b)(5) of
this section. For purposes of these examples: All affiliated groups file consolidated
returns; all corporations are includible corporations that have calendar taxable years;
each of P, X, and T is a corporation having
one class of stock outstanding; each of P
and X is the common parent of a consolidated group (P Group and X Group,
respectively); neither the P Group nor the
X Group includes an insolvent financial
institution or an insurance company; no
NOL is a farming loss; there are no other
relevant NOL carrybacks to the X Group’s
consolidated taxable years; except as otherwise stated, the X Group has sufficient
consolidated taxable income determined
under §1.1502-11 (CTI) to absorb the
stated NOL carryback by T; T has sufficient SRLY register income within the X
Group to absorb the stated NOL carryback
by T; all transactions occur between unrelated parties; and the facts set forth the
only relevant transactions.
(i) Example 1: Computation and absorption
of amended carrybacks—(A) Facts. In Year 1, T
became a member of the X Group. On the last day
of Year 5, P acquired all the stock of T from X. At
the time of P’s acquisition of T stock, the default

Bulletin No. 2023–31

carryback period was zero taxable years. The P
Group did not make an irrevocable split-waiver
election under paragraph (b)(4) of this section to
relinquish, with respect to all CNOLs attributable
to T while a member of the P Group, the portion of
the carryback period for which T was a member of
the X Group (that is, a former group). In Year 7, the
P Group sustained a $1,000 CNOL, $600 of which
was attributable to T pursuant to paragraph (b)(2)
(iv)(B) of this section. In that year, P did not make
an irrevocable general waiver election under section
172(b)(3) and paragraph (b)(3)(i) of this section
with respect to the $1,000 CNOL when the P Group
filed its consolidated return for Year 7. In Year 8,
legislation was enacted that amended section 172 to
require a carryback period of five years for NOLs
arising in a taxable year beginning after Year 5 and
before Year 9.
(B) Analysis. As a result of the amended carryback rules enacted in Year 8, the P Group’s $1,000
CNOL in Year 7 must be carried back to Year 2.
Therefore, T’s $600 attributed portion of the P
Group’s Year 7 CNOL (that is, T’s amended carryback CNOL) must be carried back to taxable years
of the X Group. See paragraphs (b)(1) and (b)(2)(i)
of this section. To the extent T’s amended carryback
CNOL is not absorbed in the X Group’s Year 2 taxable year, the remaining portion must be carried to
the X Group’s Year 3, Year 4, and Year 5 taxable
years, as appropriate. See id. Any remaining portion
of T’s amended carryback CNOL is carried to consolidated return years of the P Group. See paragraph
(b)(1) of this section.
(ii) Example 2: Amended statute split-waiver
election—(A) Facts. The facts are the same as in
paragraph (b)(6)(i)(A) of this section (Example 1),
except that, following the change in statutory carryback period in Year 8, the P Group made a valid
amended statute split-waiver election under paragraph (b)(5)(i) of this section to relinquish solely the
carryback of T’s amended carryback CNOL.
(B) Analysis. Because the P Group made a valid
amended statute split-waiver election, T’s amended
carryback CNOL is not eligible to be carried back to
any taxable years of the X Group (that is, a former
group). However, the amended statute split-waiver
election does not prevent T’s Year 7 amended carryback CNOL from being carried back to years of
the P group (that is, the acquiring group) during
which T was a member. See paragraph (b)(5)(ii)(E)
of this section. As a result, the entire amount of T’s
amended carryback CNOL is eligible to be carried

back to taxable Year 6 of the P Group. Any remaining
CNOL may then be carried over within the P Group.
See paragraph (b)(1) of this section.
(iii) Example 3: Computation and absorption
of extended carrybacks—(A) Facts. The facts are
the same as in paragraph (b)(6)(i)(A) of this section
(Example 1), except that the X Group had $300 of
CTI in Year 4 and $200 of CTI in Year 5 and, at the
time of the P Group’s acquisition of T, the default
carryback period was two years. Therefore, T’s $600
attributed portion of the P Group’s Year 7 CNOL was
required to be carried back to the X Group’s Year
5 taxable year, and the X Group was able to offset
$200 of CTI in Year 5.
(B) Analysis. As a result of the amended carryback rules, the X Group must offset its $300 of CTI
in Year 4 against T’s amended carryback CNOL. See
paragraphs (b)(1) and (b)(2)(i) of this section. The
remaining $100 ($600-$300-$200) of T’s amended
carryback CNOL is carried to taxable years of the P
Group. See paragraph (b)(1) of this section.
(iv) Example 4: Extended split-waiver election—
(A) Facts. The facts are the same as in paragraph (b)
(6)(iii)(A) of this section (Example 3), except that,
following the change in law in Year 8, the P Group
made a valid extended split-waiver election under
paragraph (b)(5)(i) of this section to relinquish the
extended carryback period for T’s amended carryback CNOL for years in which T was a member of
the X Group.
(B) Analysis. As a result of the P Group’s
extended split-waiver election, T’s amended carryback CNOL is not eligible to be carried back to any
portion of the extended carryback period (that is, any
taxable year prior to Year 5). See paragraph (b)(5)(ii)
(I) of this section. As a result, the X Group absorbs
$200 of T’s $600 loss in Year 5, and the remaining
$400 ($600-$200) is carried to taxable years of the P
Group. See paragraph (b)(1) of this section.

(7) Short years in connection with
transactions to which section 381(a)
applies. If a member distributes or transfers assets to a corporation that is a member immediately after the distribution or
transfer in a transaction to which section
381(a) applies, the transaction does not
cause the distributor or transferor to have
a short year within the consolidated return
year of the group in which the transaction
occurred that is counted as a separate year

for purposes of determining the years to
which a net operating loss may be carried.
*****
(h) * * *
(9) Amended carryback rules.
Paragraphs (b)(5) and (6) of this section
apply to any CNOLs arising in a taxable
year ending after July 2, 2020. However,
taxpayers may apply paragraphs (b)(5)
and (6) of this section to any CNOLs
arising in a taxable year beginning after
December 31, 2017.
*****
§1.1502-21T [Removed]
Par. 3. Section 1.1502-21T is removed.
§1.1502-78 [Amended]
Par. 4. Section 1.1502-78 is amended
by removing the language Ҥ 1.1502-21(b)
(3)(ii)(B)” in paragraph (a) and adding the
language “§1.1502-21(b)(4)” in its place.
PART 602—OMB CONTROL
NUMBERS UNDER THE
PAPERWORK REDUCTION ACT
Par. 5. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 6. In §602.101, amend the table in
paragraph (b) by:
a. Revising the entry for “§1.1502-21”;
and
b.
Removing
the
entry
for
“§1.1502.21T”.
The revision reads as follows:
§602.101 OMB Control Numbers.
*****
(b) * * *

Current OMB control No.

CFR part or section where identified and described

*******
1545-0123

1.1502-21 . . . . . . . . . . . . . . . . . . . . . . . .

*******
Douglas W. O’Donnell,
Deputy Commissioner for Services
and Enforcement.

Lily Batchelder,
Assistant Secretary of the Treasury
(Tax Policy).

Approved: June 21, 2023.

(Filed by the Office of the Federal Register July 10,
2023, 4:15 p.m., and published in the issue of the
Federal Register for July 12, 2023, 88 FR 44210)

Bulletin No. 2023–31

381

July 31, 2023

Part III
Transition Relief and
Guidance Relating to
Certain Required Minimum
Distributions
Notice 2023-54
I. PURPOSE
This notice provides transition relief
for plan administrators, payors, plan participants, IRA owners, and beneficiaries in
connection with the change in the required
beginning date for required minimum distributions (RMDs) under § 401(a)(9) of
the Internal Revenue Code (Code) pursuant to § 107 of the SECURE 2.0 Act
of 2022 (SECURE 2.0 Act), enacted on
December 29, 2022, as Division T of the
Consolidated Appropriations Act, 2023,
Pub. L. 117-328, 136 Stat. 4459 (2022).
This notice also provides guidance related
to certain specified RMDs for 2023. In
addition, this notice announces that the
final regulations that the Department of
the Treasury (Treasury Department) and
the Internal Revenue Service (IRS) intend
to issue related to RMDs will apply for
purposes of determining RMDs for calendar years beginning no earlier than 2024.
II. BACKGROUND
A. Section 401(a)(9)
Section 401(a)(9) of the Code requires
a stock bonus, pension, or profit-sharing
plan described in § 401(a) (or an annuity
contract described in § 403(a)) to make
minimum distributions starting by the
required beginning date (as well as minimum distributions to beneficiaries if the
employee dies before the required beginning date). Individual retirement accounts
and individual retirement annuities (IRAs)
described in § 408(a) and (b), annuity contracts, custodial accounts, and retirement
income accounts described in § 403(b)
(§ 403(b) plans), and eligible deferred
compensation plans under § 457(b), are
also subject to the rules of § 401(a)(9) pursuant to §§ 408(a)(6) and (b)(3), 403(b)

July 31, 2023

(10), and 457(d)(2), respectively, and the
regulations under those sections.
B. Required Beginning Date
Section 107 of the SECURE 2.0
Act amended § 401(a)(9) of the Code
to change the required beginning date
applicable to § 401(a) plans and other
eligible retirement plans, including
IRAs. Rather than defining the required
beginning date by reference to April 1 of
the calendar year following the calendar
year in which an individual attains age
72, the new required beginning date for
an employee or IRA owner is defined by
reference to April 1 of the calendar year
after the calendar year in which the individual attains the applicable age (which
is either age 73 or age 75, depending on
the individual’s date of birth). Thus, for
example, an IRA owner who was born
in 1951 will have a required beginning
date of April 1, 2025, rather than April
1, 2024, (and the first distribution made
to that IRA owner that will be treated as
an RMD will be a distribution made for
2024, rather than 2023).
C. RMD Distribution Period
Section 401(a)(9) provides rules for
RMDs from a qualified plan during the
life of the employee in § 401(a)(9)(A)
and after the death of the employee in
§ 401(a)(9)(B). In addition to setting forth
a required beginning date for distributions, these rules identify the period over
which the employee’s entire interest must
be distributed.
Specifically, § 401(a)(9)(A)(ii) provides that the entire interest of an
employee in a qualified plan must be
distributed, beginning not later than the
employee’s required beginning date, in
accordance with regulations, over the life
of the employee or over the lives of the
employee and a designated beneficiary
(or over a period not extending beyond
the life expectancy of the employee and a
designated beneficiary).
Section 401(a)(9)(B)(i) provides that,
if the employee dies after distributions
have begun, the employee’s remaining

382

interest must be distributed at least as
rapidly as under the method of distributions being used by the employee under
section 401(a)(9)(A)(ii) as of the date
of the employee’s death. Section 401(a)
(9)(B)(ii) and (iii) provides that, if the
employee dies before RMDs have begun,
the employee’s interest must either be: (1)
distributed within 5 years after the death
of the employee (5-year rule), or (2) distributed (in accordance with regulations)
over the life or life expectancy of the designated beneficiary with the distributions
beginning no later than 1 year after the
date of the employee’s death (subject to
an exception in § 401(a)(9)(B)(iv) if the
designated beneficiary is the employee’s
surviving spouse).
The rules of § 401(a)(9) are incorporated by reference in § 408(a)(6) and (b)
(3) for IRAs, § 403(b)(10) for § 403(b)
plans), and § 457(d) for eligible deferred
compensation plans.
D. Section 401(a)(9)(H) as added by the
SECURE Act
1. Ten-year rule
Section 401(a)(9) of the Code was
amended by § 401(a)(1) of the Setting
Every Community Up for Retirement
Enhancement Act of 2019 (SECURE
Act), enacted on December 20, 2019, as
Division O of the Further Consolidated
Appropriations Act, 2020, Pub. L. 11694, 133 Stat. 2534 (2019), to add § 401(a)
(9)(H) to the Code. Generally, pursuant
to § 401(a)(9)(H)(i), if an employee in
a defined contribution plan has a designated beneficiary, the 5-year period under
the 5-year rule is lengthened to 10 years
(10-year rule) and the 10-year rule applies
regardless of whether the employee dies
before the required beginning date. In
addition, pursuant to § 401(a)(9)(H)(ii),
the § 401(a)(9)(B)(iii) exception to the
10-year rule (under which the 10-year rule
is treated as satisfied if distributions are
paid over the designated beneficiary’s lifetime or life expectancy) applies only if the
designated beneficiary is an eligible designated beneficiary, as that term is defined in
§ 401(a)(9)(E)(ii).

Bulletin No. 2023–31

Section 401(a)(9)(H)(iii) provides that
when an eligible designated beneficiary
dies before that individual’s portion of the
employee’s interest in the plan has been
entirely distributed, the beneficiary of the
eligible designated beneficiary will be
subject to a requirement that the remainder
of that individual’s portion be distributed
within 10 years of the eligible designated
beneficiary’s death. In addition, § 401(a)
(9)(E)(iii) provides that when an eligible
designated beneficiary who is a minor
child of the employee reaches the age of
majority, that child will no longer be considered an eligible designated beneficiary
and the remainder of that child’s portion
of the employee’s interest in the plan must
be distributed within 10 years of that date.
2. Section 401(a)(9)(H) effective date
Section 401(b)(1) of the SECURE Act
provides that, generally, the amendments
made to § 401(a)(9)(H) of the Code apply
to distributions with respect to employees who die after December 31, 2019.
Pursuant to § 401(b)(2) and (3) of the
SECURE Act, later effective dates apply
for certain collectively bargained plans
and governmental plans (as defined in
§ 414(d) of the Code).
Section 401(b)(4) of the SECURE Act
provides that § 401(a)(9)(H) of the Code
does not apply to payments under certain
annuity contracts under which payment
commenced (or the manner of payments
was fixed) before December 20, 2019.
Section 401(b)(5) of the SECURE Act
provides that if an employee who participated in a plan died before § 401(a)(9)(H)
of the Code became effective with respect
to the plan, and the employee’s designated
beneficiary died after that effective date,
then that designated beneficiary is treated
as an eligible designated beneficiary and
§ 401(a)(9)(H) applies to any beneficiary
of that designated beneficiary.
E. Excise tax under § 4974(a)
Section 4974(a) provides that if the
amount distributed during a year to a
payee under any qualified retirement plan
(as defined in § 4974(c)) or any eligible
deferred compensation plan (as defined
in § 457(b)) is less than that year’s minimum required distribution (as defined in

Bulletin No. 2023–31

§ 4974(b)), then an excise tax is imposed
on the payee. Pursuant to § 302 of the
SECURE 2.0 Act, for taxable years beginning after December 29, 2022, this excise
tax is equal to 25 percent of the amount by
which the minimum required distribution
for a year exceeds the amount actually
distributed in that year. If a failure to take
a minimum required distribution is corrected by the end of the correction window
(generally, the end of the second year that
begins after the year of the missed minimum required distribution), the excise tax
is reduced from 25 percent to 10 percent.
F. Section 401(a)(9) proposed regulations
The Treasury Department and the IRS
published proposed regulations regarding
RMDs under § 401(a)(9) of the Code and
related provisions in the Federal Register
on February 24, 2022 (87 FR 10504),
which provided that the regulations,
when finalized, would apply beginning
with the 2022 calendar year. Along with
other matters, the proposed regulations
address issues relating to the 10-year rule
in § 401(a)(9)(H). Specifically, Prop. Reg.
§ 1.401(a)(9)-5(d)(1)(i) requires that, in
the case of an employee who dies on or
after the employee’s required beginning
date, distributions to the employee’s beneficiaries for calendar years after the calendar year of the employee’s death must
satisfy § 401(a)(9)(B)(i). In addition, distributions to the employee’s beneficiaries
must also satisfy § 401(a)(9)(B)(ii) (or
if applicable, § 401(a)(9)(B)(iii)), taking
into account § 401(a)(9)(E)(iii), (H)(ii),
and (H)(iii).
In order to satisfy § 401(a)(9)(B)(i),
the beneficiary of an employee who died
after the employee’s required beginning
date must take an annual RMD beginning
in the first calendar year after the calendar year of the employee’s death. In order
to satisfy § 401(a)(9)(B)(ii) (applied by
substituting “10 years” for “5 years”),
the remaining account balance must be
distributed by the 10th calendar year after
the calendar year of the employee’s death
(subject to an exception under § 401(a)
(9)(B)(iii), if applicable). In order to satisfy both of those requirements, the proposed regulations generally provide that,
in the case of an employee who dies after
the employee’s required beginning date

383

with a designated beneficiary who is not
an eligible designated beneficiary (and
for whom the § 401(a)(9)(B)(iii) alternative to the 10-year rule is not applicable),
annual RMDs must continue to be taken
after the death of the employee, with a full
distribution required by the end of the 10th
calendar year following the calendar year
of the employee’s death.
In the case of a designated beneficiary
who is an eligible designated beneficiary,
the proposed regulations include an alternative to the 10-year rule under which
annual lifetime or life expectancy payments would be made to the beneficiary
beginning in the year following the year
of the employee’s death, in accordance
with § 401(a)(9)(B)(iii). Under the proposed regulations, if an eligible designated beneficiary of an employee is using
the lifetime or life expectancy payment
alternative to the 10-year rule, then the
eligible designated beneficiary (and, after
the death of the eligible designated beneficiary, the beneficiary of the eligible designated beneficiary) would need to continue
to take annual RMDs after the death of
the employee (with the employee’s entire
interest distributed by no later than the 10th
year after the year of the eligible designated beneficiary’s death). The proposed
regulations provide for similar treatment
(that is, continued annual RMDs with a
requirement that the employee’s entire
interest be distributed no later than the 10th
year after a specified event) in the case of
a designated beneficiary who is a minor
child of the employee (with the specified
event being the child’s reaching the age of
majority).
G. Comments received by the Treasury
Department and the IRS
The Treasury Department and the IRS
provided a 90-day comment period for the
proposed regulations. Some individuals
who are owners of inherited IRAs or are
beneficiaries under defined contribution
plans submitted comments indicating that
they thought the new 10-year rule would
apply differently than it would under the
proposed regulations. Specifically, these
commenters expected that, regardless of
when an employee died, the 10-year rule
would operate like the 5-year rule, such
that there would not be any RMD due for

July 31, 2023

a calendar year until the last year of the 5or 10-year period following the specified
event (the death of the employee, the death
of the eligible designated beneficiary, or
the attainment of the age of majority for
the employee’s child who is an eligible
designated beneficiary). Commenters
who are heirs or beneficiaries of individuals who died in 2020 explained that they
did not take an RMD in 2021 and were
unsure of whether they would be required
to take an RMD in 2022. Commenters
asserted that, if final regulations adopt the
interpretation of the 10-year rule set forth
in the proposed regulations, the Treasury
Department and the IRS should provide
transition relief for failure to take distributions that are RMDs due in 2021 or 2022
pursuant to § 401(a)(9)(H) in the case of
the death of an employee (or designated
beneficiary) in 2020 or 2021.
In response to the comments received
on the proposed regulations, the Treasury
Department and the IRS issued Notice
2022-53, 2022-45 IRB 437. Notice 202253 announced that the final regulations
will apply no earlier than the 2023 distribution calendar year and provided guidance regarding certain amounts that were
not paid in 2021 or 2022. Specifically,
Notice 2022-53 provided that a defined
contribution plan will not fail to be qualified for failing to make a specified RMD
(as defined in that notice) in 2021 or 2022
and the taxpayer who did not take a specified RMD will not be subject to the excise
tax under § 4974 for failing to take the
specified RMD.
H. Eligible Rollover Distributions
Section 402(c) generally provides that
the payment of any portion of an employee’s interest in a qualified trust to the
employee or the employee’s surviving
spouse in an eligible rollover distribution is not includible in gross income if
the distribution is rolled over to an eligible retirement plan described in § 402(c)
(8) no later than the 60th day following
the day of receipt. An eligible rollover
distribution is defined in § 402(c)(4) as a
distribution to an employee of all or any

portion of the balance to the credit of the
employee in a qualified trust other than
a distribution that is: (A) one of a series
of substantially equal periodic payments
made over a specified period; (B) a distribution required under § 401(a)(9)1; or
(C) a distribution made on account of the
employee’s hardship. Section 402(c)(3)
(B) provides that the Secretary may waive
the 60-day rollover deadline under certain
circumstances. Section 402(c)(11) provides for the direct rollover of a deceased
employee’s interest in a qualified trust
to an inherited IRA established for the
deceased employee’s nonspouse designated beneficiary.
Section 401(a)(31) provides that a trust
does not constitute a qualified trust unless
the plan of which the trust is a part provides that, if the distributee of any eligible rollover distribution elects to have the
distribution paid directly to an eligible
retirement plan and specifies the eligible
retirement plan to which the distribution
is to be paid, the distribution will be made
in the form of a direct trustee-to-trustee
transfer. Within a reasonable period of
time prior to making an eligible rollover
distribution, the plan administrator of a
plan qualified under § 401(a) is required to
provide to the recipient the written explanation described in § 402(f)(1).
Rules similar to those described in
the preceding two paragraphs apply to
§ 403(a) annuity plans, § 403(b) plans,
and § 457 eligible governmental plans.
See §§ 403(a)(4) and (5), 403(b)(8) and
(10), and 457(d)(1)(C) and (e)(16).
If the recipient of an eligible rollover
distribution does not elect in accordance
with § 401(a)(31) to have the distribution paid directly to an eligible retirement
plan described in § 402(c)(8), then under
§ 3405(c), the payor of the distribution
is required to withhold from the distribution an amount equal to 20 percent of the
distribution.
Section 408(d)(3) generally provides
that an amount distributed from an IRA to
the IRA owner, or to the surviving spouse
of the IRA owner, is not included in gross
income if the distribution is rolled over to
an eligible retirement plan no later than

the 60th day following the day of receipt.
A distribution of an after-tax amount
may only be rolled over to another IRA.
Section 408(d)(3)(B) provides that an
IRA owner may roll over only one IRA
distribution in a 12-month period, and
§ 408(d)(3)(E) provides that an RMD
may not be rolled over. Section 408(d)(3)
(I) provides that the Secretary may waive
the 60-day rollover deadline under certain
circumstances.
III. APPLICABILITY DATE OF FINAL
REGULATIONS
Final regulations regarding RMDs
under § 401(a)(9) and related provisions
will apply for calendar years beginning no
earlier than 2024.
IV. RELIEF RELATING TO CHANGE
IN REQUIRED BEGINNING DATE
UNDER SECURE 2.0 ACT
Following enactment of the SECURE
2.0 Act, plan administrators and other
payors indicated that automated payment
systems would need to be updated to
reflect the change in the required beginning date under § 401(a)(9)(C) pursuant
to § 107 of the SECURE 2.0 Act. They
expressed concern that these revisions
could take some time to implement and,
as a result, plan participants and IRA
owners who would have been required to
begin receiving RMDs for calendar year
2023 but for § 107 of the SECURE 2.0
Act (i.e., those who will attain age 72 in
2023) and who receive distributions in
2023 could have had those distributions
mischaracterized as RMDs (and therefore ineligible for rollover). This Section
IV grants certain relief relating to certain
distributions made during 2023 to individuals that were characterized as RMDs
but are not actually RMDs as a result of
the enactment of § 107 of the SECURE
2.0 Act.
A. Payor and plan administrator guidance related to SECURE 2.0 Act change to
required beginning date. A payor or plan
administrator will not be considered to
have failed to satisfy the requirements of

Under § 1.402(c)-2, in determining which amounts are treated as eligible rollover distributions, if a minimum distribution is required for a calendar year, the amounts distributed during that
calendar year are treated as RMDs to the extent that the total RMD under § 401(a)(9) for the calendar year has not been satisfied.
1

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§§ 401(a)(31), 402(f), and 3405(c) merely
because of a failure to treat certain distributions as eligible rollover distributions.
This relief applies with respect to any
distribution made from a plan between
January 1, 2023, and July 31, 2023, to a
participant born in 1951 (or that participant’s surviving spouse) that would have
been an RMD but for the change in the
required beginning date under § 107 of the
SECURE 2.0 Act.
B. Extension of 60-day deadline
for rollover of certain distributions.
Pursuant to § 402(c)(3)(B), the Treasury
Department and the IRS are extending the
60-day rollover period for any distribution
described in section IV.A of this notice so
that the deadline for rolling over such a
distribution will be September 30, 2023.
For example, if a participant who was
born in 1951 received a single-sum distribution in January 2023, part of which was
treated as ineligible for rollover because
it was mischaracterized as an RMD, that
participant will have until September 30,
2023, to roll over that mischaracterized
part of the distribution.
C. Relief relating to RMDs previously
distributed from an IRA. Pursuant to
§ 408(d)(3)(I), the Treasury Department
and the IRS are extending the 60-day
rollover period for certain IRA distributions made to an IRA owner (or the IRA
owner’s surviving spouse), so that the
deadline for rolling over that portion of
the distribution will be September 30,
2023. The distributions that are subject
to this extension are distributions made
from an IRA between January 1, 2023,

Bulletin No. 2023–31

and July 31, 2023, to an IRA owner born
in 1951 (or that individual’s surviving
spouse) that would have been RMDs but
for the change in the required beginning
date under § 107 of the SECURE 2.0
Act. This rollover is permitted even if
the IRA owner or surviving spouse has
rolled over a distribution within the last
twelve months. However, making such
a rollover of the portion of an IRA distribution mischaracterized as an RMD
will preclude the IRA owner or surviving
spouse from rolling over a distribution in
the next twelve months. In that case, that
individual could still make a direct trustee-to-trustee transfer as described in Rev.
Rul. 78-406, 1978-2 CB 157.
V. GUIDANCE FOR SPECIFIED RMDs
FOR 2023
A. Guidance for defined contribution
plans that did not make a specified RMD.
A defined contribution plan that failed
to make a specified RMD (as defined in
section V.C of this notice) will not be
treated as having failed to satisfy § 401(a)
(9) merely because it did not make that
distribution.
B. Guidance for certain taxpayers who
did not take a specified RMD. To the extent
a taxpayer did not take a specified RMD
(as defined in section V.C of this notice),
the IRS will not assert that an excise tax is
due under § 4974.
C. Definition of specified RMD. For
purposes of this notice, a specified RMD is
any distribution that, under the interpretation included in the proposed regulations,

385

would be required to be made pursuant to
§ 401(a)(9) in 2023 under a defined contribution plan or IRA that is subject to
the rules of § 401(a)(9)(H) for the year in
which the employee (or designated beneficiary) died if that payment would be
required to be made to:
• a designated beneficiary of an
employee under the plan (or IRA
owner) if: (1) the employee (or IRA
owner) died in 2020, 2021, or 2022,
and on or after the employee’s (or
IRA owner’s) required beginning
date, and (2) the designated beneficiary is not using the lifetime or
life expectancy payments exception
under § 401(a)(9)(B)(iii); or
• a beneficiary of an eligible designated
beneficiary (including a designated
beneficiary who is treated as an eligible designated beneficiary pursuant to
§ 401(b)(5) of the SECURE Act) if:
(1) the eligible designated beneficiary
died in 2020, 2021, or 2022, and (2)
that eligible designated beneficiary
was using the lifetime or life expectancy payments exception under
§ 401(a)(9)(B)(iii) of the Code.
VI. DRAFTING INFORMATION
The principal author of this notice
is Jessica Weinberger of the Office of
Associate Chief Counsel (Employee
Benefits, Exempt Organizations, and
Employment Taxes). For further information regarding this notice, contact Jessica
Weinberger at (202) 317-6349 (not a tollfree number).

July 31, 2023

NOTE. This revenue procedure will be reproduced as the next revision of IRS Publication 1141, General Rules and Specifications for Substitute Forms W-2 and W-3.
26 CFR 601.602: Tax forms and instructions. (Also Part I, Sections 6041, 6051, 6071, 6081, 6091; 1.6041-1, 1.6041-2, 31.6051-1, 31.6051-2, 31.6071(a)-1, 31.6081(a)1, 31.6091-1.)

Rev. Proc. 2023-25
TABLE OF CONTENTS
Part 1 – GENERAL
Section 1.1 – Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387
Section 1.2 – What’s New. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389
Section 1.3 – General Rules for Paper Forms W-2 and W-3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389
Section 1.4 – General Rules for Filing Forms W-2 (Copy A) Electronically. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391
Part 2 – SPECIFICATIONS FOR SUBSTITUTE FORMS W-2 AND W-3
Section 2.1 – Specifications for Red-Ink Substitute Form W-2 (Copy A) and Form W-3 Filed With the SSA. . . . . . . . . . . . . 392
Section 2.2 – Specifications for Substitute Black-and-White Form W-2 (Copy A) and Form W-3 Filed With the SSA. . . . . . 394
Section 2.3 – Requirements for Substitute Forms Furnished to Employees (Copies B, C, and 2 of Form W-2) . . . . . . . . . . . 397
Section 2.4 – Electronic Delivery of Forms W-2 and W-2c Recipient Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
Part 3 – ADDITIONAL INSTRUCTIONS
Section 3.1 – Additional Instructions for Form Printers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
Section 3.2 – Instructions for Employers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
Section 3.3 – OMB Requirements for Both Red-Ink and Black-and-White Substitute Forms W-2 and W-3. . . . . . . . . . . . . . 403
Section 3.4 – Order Forms and Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404
Section 3.5 – Effect on Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404
Section 3.6 – Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404

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Part 1
General
Section 1.1 – Purpose
.01 The purpose of this revenue procedure is to state the requirements of the Internal Revenue
Service (IRS) and the Social Security Administration (SSA) regarding the preparation and use of
substitute forms for Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and
Tax Statements, for wages paid during the 2023 calendar year.
.02 For purposes of this revenue procedure, substitute Form W-2 (Copy A) and substitute Form
W-3 are forms that are not printed by the IRS. Copy A or any other copies of a substitute Form
W-2 or a substitute Form W-3 must conform to the specifications in this revenue procedure to
be acceptable to the IRS and the SSA. No IRS office is authorized to allow deviations from this
revenue procedure. Preparers should also refer to the 2023 General Instructions for Forms W-2
and W-3 for details on how to complete these forms. See Section 3.4, later, for information on
obtaining the official IRS forms and instructions. See Sections 2.3 and 2.4, later, for requirements
for the copies of substitute forms furnished to employees and for electronic delivery of employee
copies.
.03 For purposes of this revenue procedure, the official IRS-printed red dropout ink Forms W-2
(Copy A) and Form W-3, and their exact substitutes, are referred to as “red-ink.” The SSAapproved black-and-white Forms W-2 (Copy A) and Form W-3 are referred to as “substitute
black-and-white Forms W-2 (Copy A)” and “substitute black-and-white Form W-3,” respectively.
Any questions about the red-ink Form W-2 (Copy A) and Form W-3 and the substitute employee
statements should be emailed to substituteforms@irs.gov. Please enter “Substitute Forms” on the
subject line. Or send your questions to:
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:P:TP:TP
NCFB
5000 Ellin Road
Mail Stop C6-175
Lanham, MD 20706
Note. Do not send completed forms to the Substitute Forms Program via email or mail as they are
unable to process those forms. Any examples/samples of substitute forms sent to the Substitute
Forms Program should not contain taxpayer information.
Any questions about the black-and-white Form W-2 (Copy A) and Form W-3 should be emailed to
copy.a.forms@ssa.gov or sent to:
Social Security Administration
Direct Operations Center
Attn: Substitute Black-and-White Copy A Forms, Room 341
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997
Note. You should receive a response from either the IRS or the SSA within 30 days.

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July 31, 2023

.04 Some Forms W-2 that include logos, slogans, and advertisements (including advertisements
for tax preparation software) may be considered as suspicious or altered Forms W-2 (also known
as questionable Forms W-2). An employee may not recognize the importance of the employee
copy for tax reporting purposes due to the use of logos, slogans, and advertisements. Thus, the
IRS has determined that logos, slogans, and advertising will not be allowed on Copy A of Forms
W-2, Forms W-3, or any employee copies reporting wages, with the following exceptions for the
employee copies.
•

Forms may include the exact name of the employer or agent, primary trade name, trademark,
service mark, or symbol of the employer or agent.

•

Forms may include an embossment or watermark on the information return (and copies) that
is a representation of the name, a primary trade name, trademark, service mark, or symbol of
the employer or agent.

•

Presentation may be in any typeface, font, stylized fashion, or print color normally used by
the employer or agent, and used in a nonintrusive manner.

•

These items must not materially interfere with the ability of the recipient to recognize,
understand, and use the tax information on the employee copies.

The IRS e-file logo on the IRS official employee copies may be included, but it is not required, on
any of the substitute form copies.
The information return and employee copies must clearly identify the employer’s name associated
with its employer identification number (EIN).
Logos and slogans may be used on permissible enclosures, such as a check or account statement,
but not on information returns and employee copies.
Forms W-2 and W-3 are subject to annual review and possible change. This revenue procedure
may be revised to state other requirements of the IRS and the SSA regarding the preparation and
use of substitute forms for Form W-2 and Form W-3 for wages paid during the 2023 calendar
year at a future date. If you have comments about the restrictions on including logos, slogans, and
advertising on information returns and employee copies, send or email your comments to: Internal
Revenue Service, Attn: Substitute Forms Program, SE:W:CAR:MP:P:TP:TP, NCFB, 5000 Ellin
Road, Mail Stop C6-175, Lanham, MD 20706, or substituteforms@irs.gov.
.05 The Internal Revenue Service/Information Returns Branch (IRS/IRB) maintains a centralized
customer service call site to answer questions related to information returns (Forms W-2, W-3,
W-2c, W-3c, 1099 series, 1096, etc.). You can reach the call site at 866-455-7438 (toll free) or
304-263-8700 (not a toll-free number). Deaf or hard-of-hearing customers may call any of our
toll-free numbers using their choice of relay service. You may also email questions to mccirp@irs.
gov. Do not submit employee information via email because it is not secure and the information
may be compromised.
File paper or electronic Forms W-2 (Copy A) with the SSA. The IRS/IRB does not process Forms
W-2 (Copy A). However, the IRS/IRB does process Form 8508, Application for a Waiver from
Electronic Filing of Information Returns, and Form 8809, Application for Extension of Time To
File Information Returns, for Forms W-2 (Copy A) and requests for an extension of time to furnish
the employee copies of Form W-2. See Publication 1220, Specifications for Electronic Filing of

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Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G, for information on waivers and extensions
of time. See Regulations section 301.6011-2 for information on when you are required to file
electronically and the exclusions from the electronic filing requirements.
.06 The following form instructions and publications provide more detailed filing procedures for
certain information returns.
•

General Instructions for Forms W-2 and W-3 (Including Forms W-2AS, W-2CM, W-2GU,
W-2VI, W-3SS, W-2c, and W-3c).

•

Publication 1223, General Rules and Specifications for Substitute Forms W-2c and W-3c.

Section 1.2 – What’s New
.01 Electronic filing of returns. The Department of the Treasury and the IRS issued final
regulations (T.D. 9972) that reduce the threshold for mandatory electronic filing from 250 nonaggregate returns to 10 aggregate returns as authorized under the Taxpayer First Act, enacted
July 1, 2019. If you file 10 or more information returns, you must file electronically. See
Regulations section 301.6011-2 for more information, including exclusions from the electronic
filing requirements.
.02 Exhibits. All of the exhibits in this publication were updated per the 2023 revisions of those
forms.
.03 Editorial changes. We made editorial changes throughout, including updated references.
Redundancies were eliminated as much as possible.

Section 1.3 – General Rules for Paper Forms W-2 and W-3
.01 Employers not filing electronically must file paper Forms W-2 (Copy A) along with Form
W-3 with the SSA by using either the official IRS form or a substitute form that exactly meets the
specifications shown in Parts 2 and 3 of this revenue procedure.
Note. Substitute territorial forms (W-2AS, W-2GU, W-2VI, W-3SS) must also conform to the
specifications as outlined in this revenue procedure. These forms require the form designation
(“W-2AS,” “W-2GU,” “W-2VI”) on Form W-2 (Copy A) to be in black ink. If you are an employer
in the Commonwealth of the Northern Mariana Islands, you must contact Department of Finance,
Division of Revenue and Taxation, Commonwealth of the Northern Mariana Islands, P.O. Box
5234 CHRB, Saipan, MP 96950 or www.finance.gov.mp/forms.php to get Form W-2CM and
instructions for completing and filing the form. For information on Forms 499R-2/W-2PR, go to
www.hacienda.gobierno.pr.
Employers may design their own statements to furnish to employees. Employee statements
designed by employers must comply with the requirements shown in Parts 2 and 3.
.02 Red-ink substitute forms that completely conform to the specifications contained in this
revenue procedure may be privately printed without prior approval from the IRS or the SSA. Only

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July 31, 2023

the substitute black-and-white Forms W-2 (Copy A) and Form W-3 need to be submitted to the
SSA for approval prior to their use (see Section 2.2).
.03 SSA-approved black-and-white Forms W-2 (Copy A) and Form W-3 may be generated using a
printer by following all guidelines and specifications (also see Section 2.2). In general, regardless
of the method of entering data, use black ink on Forms W-2 (Copy A) and Form W-3, which
provides better readability for processing by scanning equipment. Colors other than black are
not easily read by the scanner and may result in delays or errors in the processing of Forms W-2
(Copy A) and Form W-3. The printing of the data should be centered within the boxes. The size of
the variable data must be printed in a font no smaller than 10-points.
Note. With the exception of the identifying number, the year, the form number for Form W-3,
and the corner register marks, the preprinted form layout for the red-ink Forms W-2 (Copy A) and
Form W-3 must be in Flint J-6983 red OCR dropout ink or an exact match.
.04 Substitute forms filed with the SSA and substitute copies furnished to employees that do not
conform to these specifications are unacceptable. Penalties may be assessed for not complying
with the form specifications. Forms W-2 (Copy A) and Form W-3 filed with the SSA that do not
conform may be returned.
.05 Substitute red-ink forms should not be submitted to either the IRS or the SSA for specific
approval. If you are uncertain of any specification and want clarification, do the following.
•

Submit a letter or email to the appropriate address in Section 1.3.06 (listed next) citing the
specification.

•

State your understanding of the specification.

•

Enclose an example (if appropriate) of how the form would appear if produced using your
understanding. Do not use actual employee information in the example.

•

Be sure to include your name, complete address, and phone number with your correspondence.
If you want the IRS to contact you via email, also provide your email address.

.06 Any questions about the specifications, especially those for the red-ink Form W-2 (Copy A)
and Form W-3, should be emailed to substituteforms@irs.gov. Please enter “Substitute Forms” on
the subject line. Or send your questions to:
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:P:TP:TP
NCFB
5000 Ellin Road
Mail Stop C6-175
Lanham, MD 20706
Note. Do not send completed forms to the Substitute Forms Program via email or mail as they are
unable to process those forms. Any examples/samples of substitute forms sent to the Substitute
Forms Program should not contain taxpayer information.
Any questions about the substitute black-and-white Form W-2 (Copy A) and Form W-3 should be
emailed to copy.a.forms@ssa.gov or sent to:

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390

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Social Security Administration
Direct Operations Center
Attn: Substitute Black-and-White Copy A Forms, Room 341
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997
Note. You should receive a response within 30 days from either the IRS or the SSA.
.07 Forms W-2 and W-3 are subject to annual review and possible change. Therefore, employers
are cautioned against overstocking supplies of privately printed substitutes.
.08 Separate instructions for Forms W-2 and W-3 are provided in the 2023 General Instructions
for Forms W-2 and W-3. Form W-3 should be used only to transmit paper Forms W-2 (Copy A).
Form W-3 is a single sheet including only essential filing information. Be sure to make a copy of
your completed Form W-3 for your records. You can order current year official IRS Forms W-2,
W-2AS, W-2GU, W-2VI, W-3, and W-3SS, and the 2023 General Instructions for Forms W-2 and
W-3, online at IRS.gov/OrderForms. The IRS provides only cut sheet sets of Forms W-2 and cut
sheets of Form W-3.
.09 Because substitute Forms W-2 (Copy A) and Form W-3 are machine-imaged and scanned by
the SSA, the forms must meet the same specifications as the official IRS Forms W-2 and Form
W-3 (as shown in the exhibits).

Section 1.4 – General Rules for Filing Forms W-2 (Copy A) Electronically
.01 Employers must file Forms W-2 (Copy A) with the SSA electronically if they are required to
file 10 or more information returns unless the IRS grants a waiver or exemption. See Regulations
section 301.6011-2 for more information. The SSA publication EFW2, Specifications for Filing
Forms W-2 Electronically, contains specifications and procedures for electronic filing of Form W-2
information with the SSA. Employers are cautioned to obtain the most recent revision of EFW2
(and supplements) in case there are any subsequent changes in specifications and procedures.
.02 You may obtain a copy of the EFW2 by:
•

Accessing the SSA website at www.ssa.gov/employer/EFW2&EFW2C.htm.

.03 Electronic filers do not file a paper Form W-3. See the SSA publication EFW2 for guidance on
transmitting Form W-2 (Copy A) information to the SSA electronically.
.04 Employers are encouraged to electronically file Forms W-2 (Copy A) with the SSA even if
not required. Doing so will enhance the timeliness and accuracy of forms processing. You may
visit the SSA’s employer website at www.ssa.gov/employer. This helpful site has links to Business
Services Online (BSO) and tutorials on registering and using BSO to file your Forms W-2.
.05 Employers who do not comply with the electronic filing requirements for Form W-2 (Copy
A) and who are not granted a waiver or an exemption by the IRS may be subject to penalties.
Employers who file Form W-2 information with the SSA electronically must not send the same
data to the SSA on paper Forms W-2 (Copy A). Any duplicate reporting may subject filers to
unnecessary contacts by the SSA or the IRS.

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Part 2
Specifications for Substitute Forms W-2 and W-3

Section 2.1 – Specifications for Red-Ink Substitute Form W-2 (Copy A) and Form W-3 Filed With the SSA
.01 The official IRS-printed red dropout ink Form W-2 (Copy A) and Form W-3 and their exact
substitutes are referred to as “red-ink” in this revenue procedure. Employers may file substitute Forms
W-2 (Copy A) and Form W-3 with the SSA. The substitute forms must be exact replicas of the official
IRS forms with respect to layout and content because they will be read by scanner equipment.
Note. Even the slightest deviation can result in incorrect scanning and may affect money amounts
reported for employees.
.02 Paper used for cut sheets and continuous-pinfed forms for substitute Forms W-2 (Copy A) and
Form W-3 that are to be filed with the SSA must be white 100% bleached chemical wood, 18–20
pound paper only, optical character recognition (OCR) bond produced in accordance with the
following specifications.
• Acidity: Ph value, average, not less than . . . . . . . . . . . . . . . . . .
• Basis weight: 17 x 22 inch 500 cut sheets, pound . . . . . . . . . . . . . .
• Metric equivalent—gm./sq. meter

4.5
18–20

(a tolerance of +5 pct. is allowed) . . . . . . . . . . . . . . . . . . . . .

68–75

• Stiffness: Average, each direction, not less than—milligrams
Cross direction . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machine direction . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50
80

• Tearing strength: Average, each direction, not less
than—grams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• Opacity: Average, not less than—percent . . . . . . . . . . . . . . . . .
• Reflectivity: Average, not less than—percent . . . . . . . . . . . . . . .
• Thickness: Average—inch . . . . . . . . . . . . . . . . . . . . . . . .
Metric equivalent—mm . . . . . . . . . . . . . . . . . . . . . . . . .

40
82
68
0.0038
0.097

(a tolerance of +0.0005 inch (0.0127 mm) is allowed). Paper cannot
vary more than 0.0004 inch (0.0102 mm) from one edge to the other.
• Porosity: Average, not less than—seconds . . . . . . . . . . . . . . . . .
• Finish (smoothness): Average, each side—seconds . . . . . . . . . . . . .
(for information only) the Sheffield equivalent—

10
20–55

units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

170-d200

• Dirt: Average, each side, not to exceed—parts per
million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

Note. Reclaimed fiber in any percentage is permitted, provided the requirements of this standard
are met.
.03 All printing of red-ink substitute Forms W-2 (Copy A) and Form W-3 must be in Flint red OCR
dropout ink except as specified below. The following must be printed in nonreflective black ink.
•

July 31, 2023

Identifying number “22222” for Forms W-2 (Copy A) and “33333” for Form W-3 at the top
of the forms.

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•

Tax year at the bottom of the forms.

•

The four (4) corner register marks on the forms.

•

The form identification number (“W-3”) at the bottom of Form W-3.

•

All the instructions below Form W-3 beginning with “Send this entire page. . . . ” line to the
bottom of Form W-3.

.04 The vertical and horizontal spacing for all federal payment and data boxes on Forms W-2 and
W-3 must meet specifications. On Form W-3 and Form W-2 (Copy A), all the perimeter rules must
be 1 point (0.014 inch), while all other rules must be one-half point (0.007 inch). Vertical rules
must be parallel to the left edge of the form; horizontal rules parallel to the top edge.
.05 The official red-ink Form W-3 and Form W-2 (Copy A) are 7.50 inches wide. Employers
filing Forms W-2 (Copy A) with the SSA on paper must also file a Form W-3. Form W-3 must be
the same width (7.50 inches) as the Form W-2. One Form W-3 is printed on a standard size 8.5
x 11-inch page. Two official Forms W-2 (Copy A) are contained on a single 8.5 x 11-inch page
(exclusive of any snap-stubs).
.06 The top, left, and right margins for the Form W-2 (Copy A) and Form W-3 are 0.50 inches (1/2
inch). All margins must be free of printing except for the words “DO NOT STAPLE” on red-ink
Form W-3. The space between the two Forms W-2 (Copy A) is 1.33 inches.
.07 The identifying numbers are “22222” for Form W-2 (Copy A (and 1)) and “33333” for Form
W-3. No printing should appear anywhere near the identifying numbers.
Note. The identifying number must be printed in nonreflective black ink in OCR-A font of 10
characters per inch.
.08 The depth of the individual scannable image on a page must be the same as that on the official
IRS forms. The depth from the top line to the bottom line of an individual Form W-2 (Copy A)
must be 4.17 inches and the depth from the top line to the bottom line of Form W-3 must be 4.67
inches.
.09 Continuous-pinfed Forms W-2 (Copy A) must be separated into 11-inch deep pages. The
pinfed strips must be removed when Forms W-2 (Copy A) are filed with the SSA. The two Forms
W-2 (Copy A) on the 11-inch page must not be separated (only the pages are to be separated
(burst)). The words “Do Not Cut, Fold, or Staple Forms on This Page” must be printed twice
between the two Forms W-2 (Copy A) in Flint red OCR dropout ink. All other copies (Copies 1,
B, C, 2, and D) must be able to be distinguished and separated into individual forms.
.10 Box 12 of Form W-2 (Copy A) contains four entry boxes—12a, 12b, 12c, and 12d. Do not
make more than one entry per box. Enter your first code in box 12a (for example, enter code D
in box 12a, not 12d, if it is your first entry). If more than four items need to be reported in box
12, use a second Form W-2 to report the additional items (see Multiple forms in the 2023 General
Instructions for Forms W-2 and W-3). Do not report the same federal tax data to the SSA on
more than one Form W-2 (Copy A). However, repeat the identifying information (employee’s
name, address, and social security number (SSN); employer’s name, address, and EIN) on each
additional form.

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.11 The checkboxes in box 13 of Form W-2 (Copy A) and in box b of Form W-3 must be 0.14
inches each. The space before the first checkbox is 0.24 inches; the spaces between the first
and second checkboxes and between the second and third checkboxes must be 0.36 inches;
the space between the third checkbox to the right border of box 13 should be 0.32 inches (see
Exhibit A).
Note. More than 50% of an applicable checkbox must be covered by an “X.”
.12 All substitute Forms W-2 (Copy A) and Form W-3 in the red-ink format must have the tax year,
form number, and form title printed on the bottom face of each form using type identical to that
of the official IRS form. The red-ink substitute Form W-2 (Copy A) and Form W-3 must have the
form producer’s EIN entered directly to the left of “Department of the Treasury,” in red.
.13 The words “For Privacy Act and Paperwork Reduction Act Notice, see the separate
instructions.” must be printed in Flint red OCR dropout ink in the same location as on the official
Form W-2 (Copy A). The words “For Privacy Act and Paperwork Reduction Act Notice, see the
separate instructions.” must be printed at the bottom of the page of Form W-3 in black ink.
.14 The Office of Management and Budget (OMB) Number must be printed on substitute Forms
W-3 and W-2 (on each ply) in the same location as on the official IRS forms.
.15 All substitute Forms W-3 must include the instructions that are printed on the same sheet below
the official IRS form.
.16 The back of substitute Form W-2 (Copy A) and Form W-3 must be free of all printing.
.17 All copies must be clearly legible. Fading must be minimized to assure legibility.
.18 Chemical transfer paper is permitted for Form W-2 (Copy A) only if the following standards
are met.
•

Only chemically backed paper is acceptable for Form W-2 (Copy A). Front and back
chemically treated paper cannot be processed properly by scanning equipment.

•

Chemically transferred images must be black.

•

Carbon-coated forms are not permitted.

.19 The Government Printing Office (GPO) symbol and the Catalog Number (Cat. No.) must be
deleted from substitute Form W-2 (Copy A) and Form W-3.

Section 2.2 – Specifications for Substitute Black-and-White Form W-2 (Copy A) and Form W-3 Filed With the SSA
.01 Specifications for the SSA-approved substitute black-and-white Forms W-2 (Copy A) and
Form W-3 are similar to the red-ink forms (Section 2.1) except for the items that follow (see
Exhibits D and E). Exhibits are samples only and may not show the required typeface and/or font.
Exhibits must not be downloaded to meet tax obligations.

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1.

Forms must be printed on 8.5 x 11-inch single-sheet paper only. There must be two Forms
W-2 (Copy A) printed on a page. There must be no horizontal perforations between the two
Forms W-2 (Copy A) on each page.

2.

All forms and data must be printed in nonreflective black ink only.

3.

The data and forms must be programmed to print simultaneously. Forms cannot be produced
separately from wage data entries.

4.

The forms must not contain corner register marks.

5.

The forms must not contain any shaded areas, including those boxes that are entirely shaded
on the red-ink forms.

6.

Identifying numbers on both Form W-2 (Copy A) (“22222”) and Form W-3 (“33333”) must
be preprinted in 14-point Arial bold font or a close approximation.

7.

The form numbers (“W-2” and “W-3”) must be in 18-point Arial font or a close approximation.
The tax year (for example, “2023”) on Forms W-2 (Copy A) and Form W-3 must be in
20-point Arial bold font or a close approximation.

8.

No part of the box titles or the data printed on the forms may touch any of the vertical or
horizontal lines, nor should any of the data intermingle with the box titles. The data should be
centered in the boxes.

9.

Do not print any information in the margins of the substitute black-and-white Forms W-2
(Copy A) and Form W-3 (for example, do not print “DO NOT STAPLE” in the top margin of
Form W-3).

10. The word “Code” must not appear in box 12 on Form W-2 (Copy A).
11. A 4-digit vendor code preceded by four zeros and a slash (for example, 0000/9876) must
appear in 12-point Arial font, or a close approximation, under the tax year in place of the
Cat. No. on Form W-2 (Copy A) and in the bottom right corner of the “For Official Use
Only” box at the bottom of Form W-3. Do not display the form producer’s EIN to the left
of “Department of the Treasury.” The vendor code will be used to identify the form producer.
12. Do not print Catalog Numbers (Cat. No.) on either Form W-2 (Copy A) or Form W-3.
13. Do not print the checkboxes in box 13 of Form W-2 (Copy A). The “X” should be programmed
to be printed and centered directly below the applicable box title.
14. Do not print dollar signs. If there are no money amounts being reported, the entire field should
be left blank.
15. The space between the two Forms W-2 (Copy A) is 1.33 inches.
.02 You must submit samples of your substitute black-and-white Forms W-2 (Copy A) and Form
W-3 to the SSA. Only black-and-white substitute Forms W-2 (Copy A) and Form W-3 for tax year
2023 will be accepted for approval by the SSA. Questions regarding other red-ink forms (that is,
red-ink Forms W-2c, W-3c, 1099 series, 1096, etc.) must be directed to the IRS only.
.03 You will be required to send one set of blank and one set of dummy-data substitute blackand-white Forms W-2 (Copy A) and Forms W-3 for approval. Data entries on the sample forms
must fill the length for each box, preferably using numeric data or alpha data, depending on
the requirements. The “VOID” checkbox must be electronically checked on the dummy-data

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substitute black-and-white Form W-2 (Copy A). All “Xs” must show in box 13 centered under the
applicable checkbox titles on the dummy-data substitute black-and-white Form W-2 (Copy A).
All checkboxes on the dummy-data substitute black-and-white Form W-3 must be electronically
checked in box b (Kind of Payer, Kind of Employer, and Third-party sick pay). Include in your
submission the name, telephone number, fax number, and email address of a contact person who
can answer questions regarding your sample forms.
.04 To receive approval, you may first contact the SSA via email at copy.a.forms@ssa.gov to
obtain a template and further instructions. You can either submit your 2023 sample substitute
black-and-white Forms W-2 (Copy A) and Forms W-3 in a PDF version electronically for approval
to the copy.a.forms@ssa.gov mailbox or send your paper 2023 sample substitute black-and-white
Forms W-2 (Copy A) and Forms W-3 to:
Social Security Administration
Direct Operations Center
Attn: Substitute Black-and-White Copy A Forms, Room 341
1150 E. Mountain Drive
Wilkes-Barre, PA 18702-7997
Send your sample forms via private mail carrier or certified mail in order to verify their receipt.
You can expect approval (or disapproval) by the SSA within 30 days of receipt of your sample
forms.
.05 Vendor codes from the National Association of Computerized Tax Processors (NACTP) are
required by those companies producing the W-2 family of forms as part of a product for resale
to be used by multiple employers and payroll professionals. Employers developing Form W-2
or W-3 to be used only for their individual company require a vendor code issued by the SSA.
.06 The 4-digit vendor code preceded by four zeros and a slash (0000/9876) must be preprinted on
the sample substitute black-and-white Forms W-2 (Copy A) and Forms W-3. Forms not containing
a vendor code will be rejected and will not be submitted for testing or approval. If you have a valid
vendor code provided to you through the NACTP, you should use that code. If you do not have
a valid vendor code, contact the SSA via email at copy.a.forms@ssa.gov to obtain an SSA-issued
code. (Additional information on vendor codes may be obtained from the SSA or the NACTP via
email at president@nactp.org.)
.07 If you use forms produced by a vendor and have questions concerning approval, do not
send the forms to the SSA for approval. Instead, you may contact the software vendor to obtain a
copy of the SSA’s dated approval notice supplied to that vendor.
.08 In response to feedback from the user community, the SSA (and the IRS) have added a 2-D
barcoded version for the substitute Form W-2 and Form W-3 to the list of acceptable submission
formats. This version is an optional alternative to the nonbarcoded substitute Forms W-2 and W-3.
Both versions are fully supported by the SSA. At this time, neither the IRS nor the SSA mandates
the use of 2-D barcoded substitute forms.
Note. The data contained in the barcode must not differ from the data displayed on the form. If they
differ, the data in the barcode will be ignored and the data displayed on the form will be considered
the submission. This also occurs when the barcode is not read correctly. The information on the
form needs to be manually keyed into the database.

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To get the barcode information:
•

See the SSA’s BSO website at www.ssa.gov/bso ,

•

Request the PDF version of the specifications by emailing copy.a.forms@ssa.gov , and

•

Download the Substitute Forms W3/W2 2-D Barcoding Standards from www.ssa.gov/
employer/subBarCodeStd.pdf .

If you are using a form produced by another vendor that contains a 2-D barcode, you must submit
the form for approval using your own NACTP code. Prior to sending your first submission for
approval, contact the SSA via email at copy.a.forms@ssa.gov to register your NACTP code and
explain what forms you want to submit.

Section 2.3 – Requirements for Substitute Forms Furnished to Employees (Copies B, C, and 2 of Form W-2)
Note. Rules in Section 2.3 apply only to employee copies of Form W-2 (Copies B, C, and 2).
Printers are cautioned that the paper filers who send Forms W-2 (Copy A) to the SSA must follow
the requirements in Sections 2.1 and/or 2.2 above.
.01 All employers (including those who file electronically) must furnish employees with at least
two copies of Form W-2 (three or more for employees required to file a state, city, or local income
tax return). The following rules are guidelines for preparing employee copies.
The dimensions of these copies (Copies B, C, and 2), but not Copy A, may differ from the
dimensions of the official IRS form to allow space for reporting additional information, including
additional entries such as withholding for health insurance, union dues, bonds, or charity in box
14. The limitation of a maximum of four items in box 12 of Form W-2 applies only to Copy A,
which is filed with the SSA.
Note. Employee copies (Copies B, C, and 2 of Form W-2) may be furnished electronically if
employees give their consent (as described in Regulations section 31.6051-1(j)). See also
Publication 15-A, Employer’s Supplemental Tax Guide.
.02 The minimum dimensions for employee copies only (not Copy A) of Form W-2 should be 2.67
inches deep by 4.25 inches wide. The maximum dimensions should be no more than 6.50 inches
deep by no more than 8.50 inches wide.
Note. The maximum and minimum size specifications in this document are for tax year 2023 only
and may change in future years.
.03 Either horizontal or vertical format is permitted (see Exhibit F).
.04 The paper for all copies must be white and printed in black ink. The substitute Copy B, which
employees are instructed to attach to their federal income tax returns, should be at least 9-pound
paper (basis 17 x 22-500). Other copies furnished to employees should also be at least 9-pound
paper (basis 17 x 22-500) unless a state, city, or local government provides other specifications.
.05 Employee copies of Form W-2 (Copies B, C, and 2), including those that are printed on a single
sheet of paper, must be easily separated. The best method of separation is to provide perforations

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between the individual copies. Whatever method of separation is used, each copy should be easily
distinguished.
Note. Perforation does not apply to printouts of copies of Forms W-2 that are furnished
electronically to employees (as described in Regulations section 31.6051-1(j)). However, these
employees should be cautioned to carefully separate the copies of Form W-2. See Publication
15-A for information on electronically furnishing Forms W-2 to employees.
.06 Interleaved carbon and chemical transfer paper employee copies must be clearly legible.
Fading must be minimized to assure legibility.
.07 The electronic tax logo on the IRS official employee copies is not required on any of the
substitute form copies. To avoid confusion and questions by employees, employers are encouraged
to delete the identifying number (“22222”) from the employee copies of Form W-2.
.08 All substitute employee copies must contain boxes, box numbers, and box titles that match
the official IRS Form W-2. Boxes that do not apply can be deleted. However, certain core boxes
must be included. The placement, numbering, and size of this information is specified as follows.
•

July 31, 2023

The core boxes must be printed in the exact order shown on the official IRS form. The items
and box numbers that constitute the core data are:

Box 1 — Wages, tips, other compensation

Box 2 — Federal income tax withheld

Box 3 — Social security wages

Box 4 — Social security tax withheld

Box 5 — Medicare wages and tips

Box 6 — Medicare tax withheld

•

The core data boxes (1 through 6) must be placed in the upper right of the form. Substitute
vertical-format copies may have the core data across the top of the form. Boxes or other
information will definitely not be permitted to the right of the core data.

•

The form title, number, or copy designation (B, C, or 2) may be at the top of the form.
Also, a reversed or blocked-out area to accommodate a postal permit number or other postal
considerations is allowed in the upper right.

•

Boxes 1 through 6 must each be a minimum of 1 1/8 inches wide x 1/4 inch deep.

•

Other required boxes are:

Box a — Employee’s social security number

Box b — Employer identification number (EIN)

Box c — Employer’s name, address, and ZIP code

Box e — Employee’s name

Box f — Employee’s address and ZIP code

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Note. Employers may truncate the employee’s SSN on employee copies of Forms W-2. See the
2023 General Instructions for Forms W-2 and W-3 for more information.
Identifying items must be present on the form and be in boxes similar to those on the official
IRS form. However, they may be placed in any location other than the top or upper right. You
do not need to use the lettering system (a–c, e–f) used on the official IRS form. The employer
identification number (EIN) may be included with the employer’s name and address and not in a
separate box.
Note. Box d (“Control number”) is not required.
.09 All copies of Form W-2 furnished to employees must clearly show the form number, the form
title, and the tax year prominently displayed together in one area of the form. The title of Form
W-2 is “Wage and Tax Statement.” It is recommended (but not required) that this be located on the
bottom left of substitute Forms W-2. The reference to the “Department of the Treasury — Internal
Revenue Service” must be on all copies of substitute Forms W-2 furnished to employees. It is
recommended (but not required) that this be located on the bottom right of Form W-2.
.10 If the substitute employee copies are labeled, the forms must contain the applicable description.
•

“Copy B, To Be Filed With Employee’s FEDERAL Tax Return.”

•

“Copy C, For EMPLOYEE’S RECORDS.”

•

“Copy 2, To Be Filed With Employee’s State, City, or Local Income Tax Return.”

It is recommended (but not required) that these be located on the lower left of Form W-2. If
the substitute employee copies are not labeled as to the disposition of the copies, then written
notification using similar wording must be provided to each employee.
.11 The tax year (for example, “2023”) must be clearly printed on all copies of substitute Form
W-2. It is recommended (but not required) that this information be in the middle at the bottom of
the Form W-2. The use of 24-point. OCR-A font is recommended (but not required).
.12 Boxes 1 and 2 (if applicable) on Copy B must be outlined in bold 2-point rule or highlighted in
some manner to distinguish them. If  “Allocated tips” are being reported, it is recommended (but
not required) that box 8 also be outlined. If reported, “Social security tips” (box 7) must be shown
separately from “Social security wages” (box 3).
Note. Box 8 may be omitted if not applicable.
.13 If employers are required to withhold and report state or local income tax, the applicable
boxes are also considered core information and must be placed at the bottom of the form. State
information is included in:

Bulletin No. 2023–31

•

Box 15 (State, Employer’s state ID number),

•

Box 16 (State wages, tips, etc.), and

•

Box 17 (State income tax).

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July 31, 2023

Local information is included in:
•

Box 18 (Local wages, tips, etc.),

•

Box 19 (Local income tax), and

•

Box 20 (Locality name).

.14 Boxes 7 through 14 may be omitted from substitute employee copies unless the employer must
report any of that information to the employee. For example, if an employee did not have “Social
security tips” (box 7), the form could be printed without that box. But, if an employer provided
dependent care benefits, the amount must be reported separately, shown in box 10, and labeled
“Dependent care benefits.”
.15 Employers may enter more than four codes in box 12 of substitute Copies B, C, and 2 (and 1
and D) of Form W-2, but each entry must use codes A–HH (see the 2023 General Instructions for
Forms W-2 and W-3).
.16 If an employer has employees in any of the three categories in box 13, all checkbox headings
must be shown and the proper checkmark made, when applicable.
.17 Employers may use box 14 for any other information that they wish to give to their employees.
Each item must be labeled. (See the instructions for box 14 in the 2023 General Instructions for
Forms W-2 and W-3.)
.18 The front of Copy C of a substitute Form W-2 must contain the note “This information is being
furnished to the Internal Revenue Service. If you are required to file a tax return, a negligence
penalty or other sanction may be imposed on you if this income is taxable and you fail to report it.”
.19 Instructions similar to those contained on the back of Copies B, C, and 2 of the official IRS
Form W-2 must be provided to each employee. An employer may modify or delete instructions
that do not apply to its employees. (For example, remove Railroad Retirement Tier 1 and Tier
2 compensation information for nonrailroad employees or information about dependent care
benefits that the employer does not provide.)
.20 Employers must notify their employees who have no income tax withheld that they may be able
to claim a tax refund because of the earned income credit (EIC). They will meet this notification
requirement if they furnish a substitute Form W-2 with the EIC notice on the back of Copy B; IRS
Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC); or on their own
statement containing the same wording. They may also change the font on Copies B, C, and 2 so
that the EIC notification and Form W-2 instructions fit differently. For more information about the
EIC notification requirements, see section 10 in Publication 15 (Circular E), Employer’s Tax Guide.
Note. An employer does not have to notify any employee who claimed exemption from withholding
on Form W-4, Employee’s Withholding Certificate, for the calendar year.

Section 2.4 – Electronic Delivery of Forms W-2 and W-2c Recipient Statements
.01 If you are required to furnish a Form W-2 or W-2c written statement (Copy B or an acceptable
substitute) to a recipient, you may furnish the statement electronically instead of on paper.

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If you meet the requirements listed below, you are treated as furnishing the statement timely.
.02 The recipient must consent in the affirmative and not have withdrawn the consent before the
statement is furnished. The consent by the recipient must be made electronically in a way that
shows that they can access the statement in the electronic format in which it will be furnished.
You must notify the recipient of any hardware or software changes prior to furnishing the
statement. A new consent to receive the statement electronically is required after any new hardware
or software is put into service.
To furnish Forms W-2 electronically, you must meet the following disclosure requirements as
described in Regulations section 31.6051-1(j) and Publication 15-A and provide a clear and
conspicuous statement of each requirement to your employees before or at the time consent is
provided.
•

The employee must be informed that they will receive a paper Form W-2 if consent isn’t
given to receive it electronically.

•

The employee must be informed of the scope and duration of the consent.

•

The employee must be informed of any procedure for obtaining a paper copy of their Form
W-2 and whether or not the request for a paper statement is treated as a withdrawal of the
employee’s consent to receiving their Form W-2 electronically.

•

The employee must be notified of the right to withdraw a consent, in writing (electronically
or on paper), and the employer must confirm the withdrawal in writing (electronically or on
paper), as well as the date the withdrawal takes effect.

•

The employee must also be notified that the withdrawn consent doesn’t apply to the previously
issued Forms W-2.

•

The employee must be informed about any conditions under which electronic Forms W-2 will
no longer be furnished (for example, termination of employment).

•

The employee must be informed of any procedures for updating their contact information that
enables the employer to provide electronic Forms W-2.

•

The employer must notify the employee of any changes to the employer’s contact information.

•

The employee must be provided with a description of the hardware and software used to
access the Form W-2 and the date when the Form W-2 will no longer be available on the
website.

•

The employee must be informed that they may be required to print the Form W-2 and attach
it to a federal, state, or local income tax return.

.03 Additionally, you must do the following.

Bulletin No. 2023–31

•

Ensure the electronic format complies with the guidelines in this document and contains all
the required information described in the 2023 General Instructions for Forms W-2 and W-3.

•

If posting the statement on a website, post it for the recipient to access on or before the
January 31 due date through October 15 of that year.

•

Inform the recipient in person, electronically, or by mail, of the posting and how to access and
print the statement.

401

July 31, 2023

Part 3
Additional Instructions

Section 3.1 – Additional Instructions for Form Printers
.01 If paper copies are used for filing with the SSA, the substitute copies of Forms W-2 (either
red-ink or substitute black-and-white forms) must be assembled in the same order as the official
IRS Forms W-2. Copy A must be first, followed sequentially by perforated sets (Copies 1, B, C,
2, and D).
.02 The substitute form to be filed by the employer with the SSA must carry the designation
“Copy A.”
Note. Electronic filers do not submit either red-ink or substitute black-and-white paper Form W-2
(Copy A) or Form W-3 to the SSA.
.03 Employers must retain a copy of Forms W-2 and W-3 (or be able to reconstruct the information)
for at least 4 years. Employers must also be able to generate Forms W-2 (Copy A) that meet the
requirements of this revenue procedure in case of loss.
.04 Except for copies in the official assembly, described in Section 3.1.01 above, no additional
copies that may be prepared by employers should be placed ahead of Form W-2 (Copy C) “For
EMPLOYEE’S RECORDS.”
.05 You must provide instructions similar to those contained on the back of Copies B, C, and 2
of the official IRS Form W-2 to each employee. You may print them on the back of the substitute
Copies B, C, and 2 or provide them to employees on a separate statement. You do not need to use
the back of Copy 2. If you do not use Copy 2, you may include all the information that appears
on the back of the official Copies B, C, and 2 on the back of your substitute Copies B and C only.
As an example, you may use the “Note” on the back of the official Copy C as the dividing point
between the text for your substitute Copies B and C. Do not print these instructions on the back
of Copy 1. Any Forms W-2 (Copy A) and Form W-3 that are filed with the SSA must have no
printing on the reverse side.

Section 3.2 – Instructions for Employers
.01 Only originals of Form W-2 (Copy A) and Form W-3 may be filed with the SSA. Carbon
copies and photocopies are unacceptable.
.02 Employers should type or machine-print data entries on plain paper forms whenever possible.
Ensure good quality by using a high-quality typeface, inserting data in the middle of blocks that
are well separated from other printing and guidelines, and taking any other measures that will
guarantee clear, sharp images. Black ink must be used with no script type, inverted font, italics, or
dual-case alpha characters.
Note. 12-point Courier font is preferred by the SSA.

July 31, 2023

402

Bulletin No. 2023–31

.03 Form W-2 (Copy A) requires decimal entries for wage data. Do not print dollar signs with
money amounts on Forms W-2 (Copy A) and Form W-3.
.04 The employer must provide a machine-scannable Form W-2 (Copy A). The employer must
also p

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A2a404aa145a0952f. Public record. Not legal advice.