IP 2004(22)

Annual Informational Returns on Magnetic Media
2004 Connecticut Magnetic Media Filing Requirements  For Federal Forms 1098, 1099-MISC, 1099-R,  1099-S, and W-2G

This publication has been superseded by IP 2005(22)

Important Information

• DRS accepts Compact Disks (CD-ROM).
• DRS accepts 3480 and 3490 cartridges.
• DRS does not accept 5 1/4" or 8" diskettes.
• DRS does not accept cassettes.
• DRS does not accept 1/2 magnetic tape.
• DRS does not accept electronically transmitted information.
• DRS does not accept backup, compressed, zip or Excel files .
• The deadline for filing magnetic media information is February 29, 2005, even if the deadline for federal purposes is the last day of March.
• All transmitters (including combined filers) must send DRS a completed Form
  CT-4804 by the due date.
• The Connecticut specifications for record layouts must be followed.
• DRS requires external media labels. Transmitters must create their own external label. (See Appendix A.)

Questions & Answers

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

1. Which nonpayroll informational returns must be filed with the Connecticut Department of Revenue Services (DRS)?

A. 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 made to a nonresident of Connecticut that relate to services performed wholly or partly in Connecticut even if no Connecticut income tax was withheld;

2. Does DRS participate in the Federal/State Combined Filing Program?

A. Yes. DRS does participate in the Federal/State Combined Filing Program for federal Forms 1099-MISC and 1099-R. Form CT-4804, Transmittal of Informational Returns Reported Magnetically, is required for combined filing.

3. Who is required to file on magnetic media with DRS?

A. Payers that meet the following conditions must file on magnetic media with DRS:

• The IRS requires you to file federal Forms W-2G, 1098, 1099-R, 1099-S, or 1099-MISC on magnetic media with the IRS; and
• You file 25 or more forms, per form type, with DRS.

4. Were there any technical changes in the magnetic media specifications for 2004?

A. Yes. See Magnetic Media Record Specifications.

5. Are DRS’ magnetic media filing specifications the same as the federal specifications?

A. No. DRS does not require the filing of the State Totals K Record. Also, many fields are not required by DRS. These are indicated by N/A. Enter blanks.

Some DRS fields are different from the federal requirements.

6. How will extraneous records be treated?

A. Information records not required by DRS will be ignored.

7. What does a multi-state filer have to do to comply with Connecticut requirements?

A. The business must report Connecticut sourced income only and remove all income from sources outside of Connecticut.

8. What magnetic media are acceptable to DRS?

A.      Cartridge — 3480 and 3490 IBM compatible

Diskette — 3 1/2 inch IBM/PC compatible (double density or high density)

CD-ROM

DRS does not accept 1/2 inch tape (starting 2003), 5 1/4 or 8 inch diskettes, zip, backup, Excel, cassette, or compressed files.

9. What DRS forms should accompany the magnetic media?

A. One Form CT-4804 and Form CT-4802, Transmittal of Informational Returns Reported Magnetically (Continuation), if applicable, per transmitter must accompany the magnetic media. DRS only requires Form CT-1096, Connecticut Annual Summary and Transmittal of Information Returns, if Connecticut income tax has been withheld from nonpayroll amounts.

10. How does a payer request an extension of time to file informational returns on magnetic media?

A. To request an extension, a payer must complete and submit Form CT-8809, Request for Extension of Time to File Informational Returns, on or before the filing deadline. This form is included in this booklet. DRS will only notify payers whose extension requests have been denied.

11. How does a payer request a waiver from filing information returns on magnetic media?

A. DRS may waive the magnetic media filing requirement if the payer can show hardship. To request a waiver of the magnetic media filing requirement, a payer must complete and submit Form CT-8508, Request for Waiver From Filing Informational Returns on Magnetic Media, at least 45 days before the filing deadline. This form is included in this booklet. The payer is not exempt from filing paper forms even if DRS grants a waiver from filing on magnetic media. DRS will notify all payers applying for a waiver of the disposition of their request.

12. Will failure to file information returns on magnetic media result in the assessment of penalties?

A. Yes. Payers required to file magnetically will be treated as having failed to file even if they file paper forms in lieu of magnetic filing. A penalty of $5 will be imposed for each statement of payment to another person that a payer fails to file with DRS on magnetic media by the last day of February. The total penalty imposed will not exceed $2,000 for any calendar year.

Table of Contents

Questions and Answers

I. Federal/State Combined Filing

   What to Send to DRS
   Record Differences for Combined Filing 
   Corrections

II. Connecticut Magnetic Media Reporting Requirements for Forms 1098, 1099-R, 1099-S, 1099-MISC, and W-2G

   General Information
   Magnetic Media Reporting Requirements
   Filing Deadline 
   Designated Delivery Services
   Extension of Filing Deadline and Waiver of Filing on Magnetic Media
   Penalties for Late Filing
   Processing Information and Payer Retention Responsibilities
   Test Files 
   Corrections
   Transmittal Forms
   Use of Agent 
   Multiple Payer/Multiple Filings
   Use of Paper Forms

III. Data Record Descriptions

   General Information
   Money Amounts

IV. Cartridge and Diskette Technical Requirements

   General Information
   Cartridge Specifications
   Internal Labels 
   Diskette Specifications
   Multiple Volume Diskette Files
   External Labels
   Requirements for MS-DOS 3 1/2" Diskettes

V. CR-ROM Technical Requirements

   General Information
   Multiple Volume CD Files 
   External Labels 
   Requirements for CDs

VI. Programmer’s Checklist

   General Information
   Cartridge Media
   CD and Diskette Media
   Payment (Calendar) Year
   Proper Order of Records for Files With More Than One Payer
   Money Amounts

VII. Examples of Proper Record Sequence for Magnetic Media 1098, 1099s, and W-2G Information Returns

VIII. Magnetic Media Record Specifications

   Transmitter T Record - General Field Descriptions
   Record Name: Transmitter T Record
   Payer A Record - General Field Descriptions
   Record Name: Payer A Record 
   Payee B Record - General Field Descriptions
   Record Name: Payee B Record
   (1) Payee B Record - Record Layout Positions 544-750 for Form 1098
   (2) Payee B Record - Record Layout Positions 544-750 for Form 1099-MISC
   (3) Payee B Record - Record Layout Positions 544-750 for Form 1099-R 
   (4) Payee B Record - Record Layout Positions 544-750 for Form 1099-S
   (5) Payee B Record - Record Layout Positions 544-750 for Form W-2G
   End of Payer C Record - General Field Descriptions
   Record Name: End of Payer C Record 
   End of Transmission F Record - General Field Descriptions
   Record Name: End of Transmission F Record

Appendix A: Instructions for Preparing an External Magnetic Media Label

Appendix B: Forms for Magnetic Media Information Returns

Appendix C: Checklist for Mailing 1098, 1099, and W-2G Magnetic Media

Appendix D: Glossary

I. Federal/State Combined Filing

Connecticut participates in the Federal/State Combined Filing Program for federal forms 1099-MISC and 1099-R. 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 also 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 was not withheld.

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

Department of Revenue Services
State of Connecticut
PO Box 5081
Hartford CT 06102-5081

Do not send federal Form 6847 to DRS.

Record Differences for Combined Filing

Record A

• Field position 26 (Combined Federal/State Filer) must contain a 1.

Record B

• Field positions 723-734 (State Income Tax Withheld) must contain the dollar amount of Connecticut state income tax withheld for forms 1099-MISC and 1099-R 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.

Corrections

DRS does not accept paper corrections of previously submitted magnetic media information including information submitted through the Federal/State Combined Filing Program. If you report any paper corrections with the federal government as a combined filer, you must make the necessary file corrections and resubmit the entire magnetic media to DRS with Form CT-4804 (and CT-1096 if applicable) and indicate it is a replacement file.

II. Connecticut Magnetic Media Reporting Requirements for Forms 1098, 1099-R, 1099-S, 1099-MISC, and W-2G

General Information

This booklet contains the specifications and instructions for reporting forms 1098, 1099-R, 1099-S, 1099-MISC, and W-2G information to 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 made to a nonresident of Connecticut that relate to services performed wholly or partly in Connecticut even if no Connecticut income tax was withheld;

Federal Form 1099-S for real estate transactions in Connecticut even if no Connecticut income tax was withheld.

DRS accepts filings on 3480 and 3490 cartridges, 3 1/2" diskettes, or CD-ROMs.

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 1098, 1099, or W-2G 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 information return magnetic media filing.

Filing Deadline

Information 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.

Designated Delivery Services

Taxpayers can use certain designated 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 and payment rules. DRS has accepted the list of designated delivery services currently published by the IRS. The following are the designated PDSs and designated types of service at the time of publication.

This list is subject to change. To verify the names of designated PDSs and designated types of service, check the DRS Web site or call DRS. See also Policy Statement 2002(4), Designated Private Delivery Services and Designated Types of Service.

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 for 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 1098, 1099, or W-2G to DRS. Any payer required to file federal forms 1098, 1099, or W-2G 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, notification will be sent to the submitter with an explanation of the problems encountered.

DRS does not provide notification when files are processed. Processed magnetic media is not returned.

DRS requires payers to keep a copy of their 1098, 1099, and W-2G data, or to be able to reconstruct the data, for at least four years after the due date.

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, and check the box indicating it is a replacement file.

Transmittal Forms

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. You may download these forms from the DRS Web site. 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, 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 sent to DRS.

Use of Agent

Payers who use a service to transmit the magnetic media are responsible for the accuracy and timeliness of their 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 forms 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 VII 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 W-2G, 1098, 1099-R, 1099-S, or 1099-MISC forms when these forms should be filed on magnetic media.

III. Data Record Descriptions

General Information

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 VII for examples of proper record sequence.

These record formats are identical to those published by the IRS in Publication 1220 (Rev. 9-2004), Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically or Magnetically.

Section VIII includes formats for the following record types required by DRS. (See Section VII, 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 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.

Punctuation may be used when appropriate. Do not include titles in the payer name field. 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 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. Cartridge and Diskette Technical Requirements

General Information

An external label must appear on all magnetic media 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 all magnetic media to contain data for one calendar year only and for one file name only. Two file names on magnetic media 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.

Cartridge Specifications

DRS accepts 3480 and 3490 cartridges.

If the 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 cartridge recorded in EBCDIC.

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

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

• If producing a standard label cartridge, the internal file name is CTTAX followed by two-digit calendar year (for example, CTTAX04).

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

• Each segment (record) of a set of labels (for example, VOL1+HDR1+HDR2=a set of header labels) must contain 80 characters.
• Header and trailer labels must be written in the same density as the data records.
• Header labels must precede data and be separated from the data by one tapemark.
• Trailer labels must follow the data and must be separated from the data by one tapemark.
• Two tapemarks must follow the trailer labels.

• If using trailer labels, write end-of-cartridge tapemarks directly after the trailer labels.
• If using no-label tape, write end-of-cartridge tapemarks directly after the last block of data.

Diskette Specifications

DRS 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 VII for examples of proper record order.

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

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, zip, or Excel files.

If a diskette was used previously for other data, reformat it before using it for 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. Only Volume 1 of a multiple volume diskette file should begin with a Transmitter 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 begin 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

An external label must appear on all magnetic media submitted to DRS for processing. (See label instructions in Appendix A.)

The external diskette labels for a multiple volume file must indicate the proper sequence for processing. For example, Volume 1 of a two 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.

Requirements for MS-DOS 3 1/2" Diskettes