IP 2001(19)

Annual Informational Returns on Magnetic Media

This publication has been superseded by IP 2002(20)

Questions & Answers

Connecticut Magnetic Media Filing of Federal Forms W-2G, 1098, 1099-MISC, 1099-R, and 1099-S

Appendix A: Instructions for Preparing an External Magnetic Media Label
Appendix B: Forms for Magnetic Media Informational Returns
Appendix C: Checklist for Mailing 1098, 1099, and W-2G Magnetic Media
Appendix D: Glossary

Form CT-4804 Transmittal of Informational Returns Reported Magnetically Form CT-4802 Transmittal of Informational Returns Reported Magnetically (Continuation)
Form CT-8809 Request for Extension of Time to File Informational ReturnsForm CT-8508 Request for Waiver from Filing Informational Returns on Magnetic Media

I. FEDERAL/STATE COMBINED FILING

Connecticut is participating in the Federal/State Combined Filing Program for federal forms 1099-MISC and 1099-R starting with tax year 2001. The record requirements for federal/state combined filers are nearly identical to the magnetic media filing requirements. The only differences are noted to the right. (Records T, A, C, and F are identical to the magnetic media filing requirements in this booklet.)

What to Send to DRS

Combined filers are required to file Form CT-4804, Transmittal of Informational Returns Reported Magnetically, with the Connecticut Department of Revenue Services (DRS) by the due date.

Combined filers are required to file Form CT-1096, Connecticut Annual Summary and Transmittal of Information Returns, if Connecticut income tax was withheld from non-payroll amounts. Do not file Form CT-1096 if Connecticut tax is not withheld.

Mail forms CT-4804 and CT-1096 (if applicable) to:

Record Differences for Combined Filing

Record A

• Field position 26

Record B

Field positions 723-734

(State Income Tax Withheld) must contain the dollar amount of Connecticut State Income Tax Withheld for 1099-MISC only. The payment amount must be right justified and unused positions must be zero-filled.

Field positions 747-748
(Combined Federal/State Code) The code for Connecticut is 08.

II. CONNECTICUT MAGNETIC MEDIA REPORTING REQUIREMENTS FOR FORMS 1098, 1099-R, 1099-S, 1099-MISC, AND W-2G

This booklet contains the specifications and instructions for reporting forms 1098, 1099-R, 1099-S, 1099-MISC, and W-2G information to the State of Connecticut Department of Revenue Services (DRS) on magnetic media. DRS requires every "state copy" of the following:

• Federal Form W-2G for winnings paid to a Connecticut resident, even if no Connecticut income tax was withheld;
• Federal Form 1098 for property taxes paid on real estate located in Connecticut and owned by an individual;
• Federal Form 1099-MISC for:
  • Payments made to a Connecticut resident,
  • Payments that relate to services performed wholly or partly in Connecticut, and
  • Payments made to a nonresident of Connecticut, even if no Connecticut income tax was withheld;
  • Federal Form 1099-R, only if Connecticut income tax was withheld;
  • Federal Form 1099-S for real estate transactions in Connecticut, even if no Connecticut income tax was withheld.

DRS only accepts filings on 1/2" magnetic tape, 3480 cartridges, and 3 1/2" diskettes.

There are two formats. One is for tape/cartridge reporting and the other is for diskette reporting.

Magnetic Media Reporting Requirements

A payer required by the Internal Revenue Service (IRS) to file copies of federal forms 1098, 1099-R, 1099-S, 1099-MISC, or W-2G on magnetic media must file these forms on magnetic media with DRS. However, a payer who files 24 or fewer Forms W-2G, 1098, or 1099 with DRS is excused from filing on magnetic media for that particular type of informational return without obtaining a waiver.

DRS has no application or authorization procedure and does not assign transmitter control codes for informational return magnetic media filing.

Filing Deadline

Informational return files are due the last day of February even if the deadline for federal purposes is the last day of March because the information is being transmitted electronically. If the last day of February falls on a Saturday, Sunday, or legal holiday, the next business day is the due date.

Private Delivery Services

Taxpayers can use certain private delivery services, in addition to the U.S. Postal Service, for delivering returns, claims, statements or other documents, or payments, and meet the timely mailing as timely filing/payment rules. DRS has accepted the list of private delivery services that is currently published by the IRS. The current list of designated private delivery services includes: Airborne Express (Airborne), DHL Worldwide Express (DHL), Federal Express (FedEX), and United Parcel Service (UPS). This list is subject to change. For more information, see Special Notice 99(14), Designated Private Delivery Services and Announcement 2001(9), Designated Private Delivery Services and Designated Types of Services.

Extension of Filing Deadline and Waiver of Filing on Magnetic Media

DRS may waive the magnetic media reporting requirement for a payer if the payer can show hardship. To request a waiver, the payer must complete and submit Form CT-8508, Request for Waiver From Filing Informational Returns on Magnetic Media, to DRS at least 45 days before the due date of the magnetic media filing. This form is included in this booklet.

DRS may grant a payer an extension of time to file information on magnetic media upon request by the payer. To request an extension, the payer must complete and submit Form CT-8809, Request for Extension of Time to File Informational Returns, to DRS on or before the due date of the magnetic media filing. This form is included in this booklet.

Penalties and Late Filing

The penalty for late filing is $50. Additionally, a penalty of $5 per form (up to a total of $2,000 per calendar year) is imposed on payers who fail to provide copies of federal Forms W-2G, 1098, or 1099 to DRS. Any payer required to file federal Forms W-2G, 1098, or 1099 on magnetic media with DRS is subject to penalties if the payer files using paper forms without obtaining a waiver.

Processing Information and Payer Retention Responsibilities

If DRS is unable to process a file, the file will be returned to the transmitter with an explanation of the problems that were encountered.

DRS does not provide notification when files are processed; DRS does not return processed files.

DRS requires payers to keep a copy of their W-2G, 1098, and 1099 data, or to be able to reconstruct the data, for at least four (4) years after the due date. DRS recommends that transmitters keep a backup copy of their magnetic media file for four years.

Test Files

DRS does not accept or process test files.

Corrections

If there is an error in the magnetic media, correct the file and replace the entire file. Complete Form CT-4804, Transmittal of Informational Returns Reported Magnetically, and check the box indicating that it is a replacement file. This form is included in this booklet.

Transmittal Forms

A Form CT-4804 and Form CT-4802, Transmittal of Informational Returns Reported Magnetically (Continuation), if applicable, for each transmitter must accompany a magnetic media file. Use the forms provided in this booklet. These forms may be photocopied or computer-generated, provided the declaration is included on Form CT-4804. Complete the forms and submit them with a magnetic media file according to the instructions in Appendix B and on Form CT-4804. Boxes 4 and 5 on Form CT-4804 must agree with the information in the Code T record. Form CT-1096, Connecticut Annual Summary and Transmittal of Information Returns, is only required if Connecticut tax has been withheld.

Use Form CT-4804 to identify the transmitter of a magnetic media file and to identify the payer(s) included on the magnetic media files. Be sure to provide the transmitter’s FEIN and the name and telephone number of a contact person. This form must accompany every magnetic media file that is sent to DRS.

Use of Agent

Payers who use a service to transmit the magnetic media filing are responsible for the accuracy and timeliness of their own informational returns. If a transmitter fails to meet the magnetic media filing requirements, the payer is liable for any penalties imposed by DRS.

Multiple Payer/Multiple Filings

DRS urges transmitters of Form W-2G, 1098, 1099-R, 1099-S, or 1099-MISC information to minimize the number of diskettes and the number of files they submit when reporting data for multiple payers or for multiple work sites of a single payer.

See Section VI for examples of how information from multiple payers or multiple sites can be placed on a single diskette or on one file.

Use of Paper Forms

Payers whose informational data is submitted on magnetic media must not send the same data to DRS on paper forms.

A penalty may apply if you file paper federal Form W-2G, 1098, 1099-R, 1099-S, or 1099-MISC when your reports should be filed on magnetic media.

III. DATA RECORD DESCRIPTIONS

A description of the data records used to create magnetic media 1098, 1099-R, 1099-S, 1099-MISC, and W-2G files follows. Use the information below, as well as the list of technical requirements and specifications in the other sections of this publication, to prepare 1098, 1099-R, 1099-S, 1099-MISC, and W-2G filings on magnetic media. See Section VI for examples of proper record sequence.

These record formats are identical to those published by the IRS in Publication 1220 (Rev. 7-2001), Specifications for Filing Forms 1098, 1099, 5498, and W-2G Magnetically or Electronically.

A Transmitter "T" record was added as the first record on the file. This record contains transmitter information from Form CT-4804, Transmittal of Informational Returns Reported Magnetically. Section VII includes formats for the following record types required by DRS. (See Section VI, for proper record sequence.)

"T" Record – Transmitter Record

"A" Record – Payer Record

"B" Record – Payee Record

"C" Record – End of Payer Record

"F" Record – End of Transmission Record

Transmitter "T" Record identifies the entity transmitting the magnetic media and contains information which is supplied on Form CT-4804. It must be the initial record of each file.

Payer "A" Record identifies the institution or person making the payments. The number of Payer "A" Records depends on the number of payers and the different types of returns being reported.

Payee "B" Record contains the payment information from the informational returns. The record layout for field positions 1 through 543 is the same for all types of returns. Field positions 544 through 750 vary for each type of return to accommodate special fields for individual forms.

End of Payer "C" Record has the total number of payees ("B" Records) and the totals of the payment amount fields filed by a given payer or a particular type of return.

End of Transmission "F" Record is the summary of payers ("A" Records) in the entire file. It must be the last record in the file.

There is no "K" Record (State Totals) requirement for Connecticut. If included, it will be ignored.

If a submission containing multiple filings (more than one Payer "A" Record on a submission) is returned for correction, make the necessary correction(s) and return the entire submission to DRS.

Punctuation may be used when appropriate. Do not include titles in the payer name. Titles make it difficult for DRS to determine an individual payer’s name and may prevent DRS from properly crediting return data.

If it is impossible to remove a title, then you must report the surname first.

Money Amounts

All money (Payment Amount and Control Total) amounts are strictly numeric. They must include both dollars and cents with the decimal point assumed. Do not round to the nearest dollar (Example: $5,500.99 = 000000550099). Do not use any punctuation in any money field.

Negative money amounts are not allowed.

Right justify and zero fill all money fields. Enter zeros in a money field that is not applicable.

IV. MAGNETIC MEDIA SPECIFICATIONS FOR TAPES, CARTRIDGES, AND DISKETTES

GENERAL

• An external label must appear on each tape, cartridge, and diskette submitted to DRS for processing. (See label instructions in Appendix A.)

• All records in the file must be a fixed length of 750 positions.

• DRS requires each tape, cartridge, or diskette to contain data for one calendar year only and for one file name only. Two file names on the tape, cartridge, or diskette are unacceptable. Any magnetic media containing data for multiple calendar years will be rejected.

• Only UPPERCASE LETTERS are acceptable on magnetic media.

• Do not compress or zip the data.

TAPE/CARTRIDGE SPECIFICATIONS

• DRS requires data to be written on 1/2" magnetic tape, in the unpacked mode. DRS accepts only tape reels and 3480 cartridges but can only accept 18 track cartridges, not 36 track cartridges. DRS does not accept 3490 cartridges at this time.

• If the tape or cartridge was used previously for other data, it must be degaussed, erased, and reformatted before using it for submittal to DRS.

• DRS accepts American Standard Code for Information Interchange (ASCII) and Extended Binary Coded Decimal Interchange Code (EBCDIC). DRS prefers magnetic tape/cartridge recorded in EBCDIC.

• DRS requires each tape or cartridge to be a separate file; for example, it must start with a Transmitter "T" Record and end with an End of Transmission "F" Record. (See Section VI, for proper record sequence.)

• The acceptable recording densities for a tape reel are: 800, 1600, or 6250 bytes per inch (BPI). DRS prefers tape reels recorded at 6250 BPI. The default density for 3480 cartridges is 38000 characters per inch (CPI).

• The block size must be a multiple of the record length (750). For example, a block size of 32,250 contains 43 records per block. Record length (750) x Number of records per block (43) = Block size (32,250).

Internal labels

DRS accepts a labeled magnetic tape/cartridge file according to the following guidelines. Labels must not contain security encoded bytes. If your system cannot produce the following labels, send a no-label tape/cartridge file (for example, a tape/cartridge file with data records only).

1. DRS accepts tapes/cartridges with IBM OS/VS STANDARD header and trailer labels or tapes/cartridges with no internal labels.

2. Transmitters that cannot produce IBM OS/VS STANDARD internal labels or no-label tapes/cartridges may use other labels, as described below.

DISKETTE SPECIFICATIONS

DRS only accepts 1098, 1099-R, 1099-S, 1099-MISC, and W-2G information recorded on 3 1/2" MS-DOS compatible diskettes. Data must be recorded in ASCII or EBCDIC character sets for MS-DOS 3 1/2" diskettes. See Section VI for examples of proper record order.

DRS does not accept 5 1/4" or 8" diskettes or CD roms.

All diskettes should be virus scanned before submission to DRS. If DRS detects a virus, the diskette(s) will be returned unprocessed.

DRS will not accept backup, compressed, or zip files.

If a diskette was used previously for other data, reformat it before using it for a submittal. Do not make it a bootable disk.

Data must be in UPPERCASE LETTERS.

Each file must contain 1098, 1099-R, 1099-S, 1099-MISC, and W-2G information for a single calendar year only. A diskette containing data for more than one file name will be rejected. A file containing data for multiple calendar years will be rejected.

Multiple Volume Diskette Files

A multiple volume diskette file is a file for which the number of data records exceeds the capacity of a single diskette, so the data must be continued onto one or more subsequent diskettes, such as volumes. Only volume 1 of a multiple volume diskette file should begin with a Transmission "T" Record. Each volume after volume 1 should begin with the record which properly follows the last record on the preceding volume. For example, if volume 1 ends with a Payer "A" Record, volume 2 should begins with a Payee "B" Record. Only the last volume should end with an End of Transmission "F" Record. No other volume should contain an End of Transmission "F" Record.

External Labels

The external diskette labels for a multiple volume file must indicate the proper sequence for processing. For example, volume 1 of a 2 volume file would be labeled "VOL 1 of 2;" volume 2 would be labeled "VOL 2 of 2." DRS will reject and return multiple volume files not indicating the proper volume sequence on the external label.

Affix an external label to each diskette. See Appendix A, Instructions for Preparing an External Magnetic Media Label.

Requirements for MS-DOS 3 1/2" Diskettes

1. Operating System: DRS requires all 3 1/2" diskettes to be created using an MS-DOS "double density" or "high density" operating system format.

2. A diskette must not contain more than one file. If more than one file of 1098, 1099-R, 1099-S, 1099-MISC, or W-2G information is being submitted, each file must be placed on a separate diskette.

3. Data can be recorded on MS-DOS 3 1/2" diskettes using ASCII or EBCDIC character sets.

4. Files sent on MS-DOS 3 1/2" double-sided diskettes must be formatted to the following densities: