Withholding

If you had income tax withheld during 2000, you should receive a statement by January 31, 2001, showing your income and the tax withheld. Depending on the source of your income, you will receive:

• Form W-2, Wage and Tax Statement,
• Form W-2G, Certain Gambling Winnings, or
• A form in the 1099 series.

Forms W-2 and W-2G. You file Form W-2 with your income tax return. File Form W-2G with your return if it shows any federal income tax withheld from your winnings.

You should get at least two copies of each form you receive. Attach one copy to the front of your federal income tax return. Keep one copy for your records. You should also receive copies to file with your state and local returns.

Form W-2

Your employer should give you a Form W-2 for 2000 by January 31, 2001. You should receive a separate Form W-2 from each employer you worked for.

If you stop working before the end of the year, your employer can give you your Form W-2 at any time after you leave your job. However, your employer must give it to you by January 31 of the following year (or the next day that is not a Saturday, Sunday, or holiday if January 31 is a Saturday, Sunday, or holiday). If you ask for the form, your employer must give it to you within 30 days after receiving your written request or within 30 days after your final wage payment, whichever is later.

If you have not received your Form W-2 by February 1, 2001, you should ask your employer for it. If you do not receive it by February 15, call the IRS. The number is listed in the Form 1040, Form 1040A, and Form 1040EZ instructions. You will be asked to give your employer's name, address, and telephone number, and, if known, your employer's identification number. You will also be asked for your address, social security number, daytime telephone number, dates of employment, and your best estimate of your total wages and federal income tax withheld.

Form W-2 shows your total pay and other compensation and the income tax, social security tax, and Medicare tax that was withheld during the year. Take credit for the federal income tax withheld on:

• Line 58, if you file Form 1040,
• Line 36, if you file Form 1040A, or
• Line 7, if you file Form 1040EZ.

Form W-2 is also used to report any taxable sick pay you received and any income tax withheld from your sick pay.

Form W-2G

If you had gambling winnings, the payer may have withheld 28% as income tax. If tax was withheld, the payer will give you a Form W-2G showing the amount you won and the amount of tax withheld. Report the amounts you won on line 21 of Form 1040. Take credit for the tax withheld on line 58 of Form 1040. If you had gambling winnings, you must use Form 1040; you cannot use Form 1040A or Form 1040EZ.

Gambling losses can be deducted on Schedule A (Form 1040) as a miscellaneous itemized deduction. However, you cannot deduct more than the gambling winnings you report on line 21.

The 1099 Series

Most forms in the 1099 series are not filed with your return. You should receive these forms by February 1, 2001. Keep these forms for your records. There are several different forms in this series, including:

• Form 1099-B, Proceeds From Broker and Barter Exchange Transactions,
• Form 1099-DIV, Dividends and Distributions,
• Form 1099-G, Certain Government and Qualified State Tuition Program Payments,
• Form 1099-INT, Interest Income,
• Form 1099-MISC, Miscellaneous Income,
• Form 1099-OID, Original Issue Discount,
• Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.,
• Form SSA-1099, Social Security Benefit Statement, and
• Form RRB-1099, Payments by the Railroad Retirement Board.

For some types of income reported on forms in the 1099 series, you may not be able to use Form 1040A or Form 1040EZ. See the instructions to these forms for details.

Form 1099-R. Attach Form 1099-R to your return if federal income tax withholding is shown in box 4. Include the amount withheld in the total on line 58 of Form 1040, or on line 36 of Form 1040A. You cannot use Form 1040EZ if you received payments reported on Form 1099-R.

Backup withholding. If you were subject to backup withholding on income you received during 2000, include the amount withheld, as shown on your Form 1099, in the total on line 58 of Form 1040, or line 36 of Form 1040A.

Form Not Correct

If you receive a form with incorrect information on it, you should ask the payer for a corrected form. Call the telephone number or write to the address given for the payer on the form. The corrected Form W-2G or Form 1099 you receive will be marked "CORRECTED." A special form, Form W-2c, Corrected Wage and Tax Statement, is used to correct a Form W-2.

Form Received After Filing

If you file your return and you later receive a form for income that you did not include on your return, you should report the income and take credit for any income tax withheld by filing Form 1040X.

Separate Returns

If you are married but file a separate return, you can take credit only for the tax withheld from your own income. Do not include any amount withheld from your spouse's income. However, different rules may apply if you live in a community property state.

Community property states. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are community property states. If you live in a community property state and file a separate return, you and your spouse must each report half of all community income in addition to your own separate income. Each of you takes credit for half of all taxes withheld on the community income. If you were divorced during the year, each of you generally must report half the community income and can take credit for half the withholding on that community income for the period before the divorce.

For more information on these rules, and some exceptions, see Publication 555, Community Property.

Fiscal Years

If you file your tax return on the basis of a fiscal year (a 12-month period ending on the last day of any month except December), you must follow special rules, described below, to determine your credit for federal income tax withholding.

Normal withholding. During your fiscal year, one calendar year will end and another will begin. You can claim credit on your tax return only for the tax withheld during the calendar year ending in your fiscal year. You cannot claim credit for any of the tax withheld during the calendar year beginning in your fiscal year. You will be able to claim credit for that withholding on your return for next year.

The Form W-2 or 1099-R you receive for the calendar year that ends during your fiscal year will show the tax withheld and the income you received during that calendar year. Although you take credit for all the withheld tax shown on the form, report only the part of the income shown on the form that you received during your fiscal year. Add to that the income you received during the rest of your fiscal year.

Example 3.1. Miles Hanson files his return for a fiscal year ending June 30. In January 2001, he received a Form W-2 that showed that his wages for 2000 were $15,600 and that his income tax withheld was $1,409.40. His records show that he had received $7,500 of the wages by June 30, 2000, and $8,100 from July 1 through December 31, 2000.

On his return for the fiscal year ending June 30, 2001, Miles will report the $8,100 he was paid in July through December of 2000, plus whatever he was paid during the rest of the fiscal year -- January 1, 2001, to June 30, 2001. However, he takes credit for all $1,409.40 that was withheld during 2000. He takes credit for none of the income tax withheld during 2001. He cannot split the credit and claim a part of it in each fiscal year.

Backup withholding. If income tax has been withheld from your income under the backup withholding rule, take credit for it on your tax return for the fiscal year in which you received the payment.

Example 3.2. Emily Smith's records show that she received income in February 2001 from which $50 was withheld under the backup withholding rule. On her tax return for the fiscal year ending June 30, 2001, Emily takes credit for withheld income tax of $50.

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