Regulatory Compliance Update August 2016

Regulatory Compliance Update

By: Hickman Beckner, Vice President

 It’s been a very quiet month for regulatory affairs.

The Social Security Administration issued revised specifications for the W2 form. The IRS has finalized changes to the tax reporting forms for tax year 2016.

Social Security Administration

The SSA has modified the instructions for employers filing W-2 forms. The only significant change is the SSA expanded the employer descriptions. Shaw’s solutions do not produce W-2 forms.

Internal Revenue Service

Changes were made for the following Forms:


Checkboxes 3 and 4 have been combined into a new checkbox titled “Chapter Indicator”
A new box (Box 3) has been added to indicate a reduced withholding rate
Payer’s Chapter 3 Status Code (New Box 16d)
Payer’s Chapter 4 Status Code (New Box 16e)

Renumbered Boxes

Federal Tax Withholding (old Box 7) has been renumbered to Box 7a
Check box for status of taxes withheld renumbered as Box 7b
Recipient’s US TIN – renumbered to Box 13e
Chapter 3 Status Code – renumbered to Box 13f
Chapter 4 Status code renumbered to Box 13g
Recipients Name – renumbered to Box 13a
Recipient’s Country Code – renumbered to Box 13b
Recipient’s Address – renumbered to Box 13c
Recipient’s City, State (province) Zip or Foreign Postal Code – renumbered to Box 13d
Recipients account number – renumbered to Box 13k
Recipients Date of Birth – renumbered to Box 13l
Payer Name – renumbered to Box 16a
Payer’s Tax ID – renumbered to Box 16b
Payer’s Global Intermediary Identification Number (GIIN) – renumbered to Box 16c
State income Taxes withheld – renumbered to Box 17a
Payer’s State Tax ID – renumbered to Box 17b
Name of Payer’s State – renumbered to Box 17c

1098 – Mortgage Interest Statement

Captions have changed for Lender’s Name and Address, Recipient’s Federal Tax ID and Payer’s Social Security Number.

Information Relocated:

Points paid moved to Box 6
Refunded overpaid interest moved to Box 4
Mortgage Insurance Premiums – moved to Box 5
The previous blank Box 5 has been move to Box 10

New Information

Outstanding Principal Balance is now reported in Box 2
Points Paid is now reported in Box 6
Property Address Checkbox – Box 7 Used to indicate when the property securing the mortgage is different from payer’s or borrower’s address.
Property Address – Box 8 this box is used when the address of the property securing the mortgage. This box is only used when Box 7 is checked.
Property Description – Box 9 This new box is used when Box 7 is not checked and Box 8 is blank. It is used for property’s that do not have a postal address.

Special Note: If the mortgage is secured by more than one property, the filer may report the address of any one of the properties using Boxes 7 – 9.

Optional information – Now reported in Box 10.


No changes.


No changes.

Forms 1098-E, 1098-T, 1099-B 1099-K, 1099-OID, 1099-DIV, 1099- INT, 1099-MISC, 1099-Q, 1099-QA, 1099-R, 1099-S, 1099-SA, 5498, 5498-ESA, 5498-QA, 5498-HAS and W-2 are not produced by Shaw’s solutions.

Significant Dates:
September 23, 2016 – Effective date for Phase 1 of NACHA’s same-day ACH processing. Phase 1 covers deposits only.

October 3, 2016 – Mandatory compliance date for the Department of Defense final rule implementing the Military Lending Act for active duty service members and their dependents.

Emerging Legislation:

We have not had any significant legislation that would impact our systems.