Errors in W-2 and
Social Security Numbers
Let's
say an employee comes into your company's payroll office
complaining that she just received a letter from the IRS. Her
tax refund has been held up due to a discrepancy with her
Social
2006 W-2
Deadlines for
Employers
|
January 31 -
Give employees their copies of Form W-2 for 2005. If an
employee agreed to receive Form W-2 electronically, have
it posted on a Web site and notify the employee of the
posting. |
February 28
- File Form W-3, Transmittal of Wage and
Tax Statements, along with Copy A of all the Forms W-2
you issued for 2005. If you file Forms W-2
electronically (not by magnetic media), your due date
for filing them with the SSA will be extended.
|
March
31 - If your company electronically files (not
by magnetic media), submit Copy A of all the Forms W-2
you issued for 2005. Despite this extension for
electronic filers, the due date for giving the
recipients these forms remains January 31. |
Online
Verification |
Employers have two online options for using the Social
Security Number Verification Service (SSNVS) to match
employee names to their Social Security
Numbers: 1. Verify
information for as many as 10 employees and get
immediate results.(This can be helpful when checking
information on new hires.) 2. Upload
and verify the data for up to 250,000 employees and get
results usually the next federal government business
day. (Depending on how many employees your company has,
this option allows your entire payroll database to be
checked at once.) To get started,
follow three steps: Register by clicking here. Once you complete the
registration, SSA will verify your identity
against its records and assign a PIN.
Use your PIN to request an Access and
Activation Code, which will be sent to your
company. Log in to the
SSNVS. For more information,
read this pamphlet. |
What
the Numbers Mean |
The numbers on Social Security cards aren't just random
selections of digits — they contains bits of
information:
The first
three digits indicate the first three digits of
the mailing address zip code listed on the original
application. For example, the number for an application
from a Florida zip code will begin with numbers ranging
from 261 to 267, while a New Hampshire applicant's
number will start with digits ranging from 001 through
003. (Before 1973, the zip code came from a Social
Security office in the
state.) The middle two
digits serve administrative purposes for each
state. The final four
digits simply run consecutively from 0001
through 9999. About 5.5 million
new Social Security Numbers are issued annually. Does
the agency reuse numbers of deceased individuals? No.
The SSA says the current system will allow unique
numbers to be assigned for
generations. | Security Number
(SSN). Another employee then complains that his tax return was
kicked back to him because the IRS says the Social Security
Number on his W-2 form is either invalid or belongs to someone
else.
After some investigation, your company makes two
discoveries: The first employee neglected to inform the Social
Security Administration (SSA) of a name change when she got
married. The second employee has messy handwriting that
resulted in a zero being mistaken for a six when entering his
information into the payroll database.
These types of
errors are not unusual and they underscore the need to verify
the accuracy of employees' names and Social Security numbers.
Unless those two pieces of information match, the government
cannot accurately keep track of an individual’s
earnings.
Names and Social Security Numbers are not
only important for paying taxes but also for determining a
person’s Social Security benefits, Medicare benefits and
Unemployment Insurance.
Generally, when there are
errors on W-2 forms, it is up to your company to take the time
to solve the problems. So it's smart to ensure that the
information matches from the outset.
Among the most
common mistakes, according to the SSA, are transcription
errors, typos, incomplete or blank names or numbers, and name
changes that go unreported. To help prevent these errors, take
the following steps:
When staff members at your
company take an employee's name and SSN, have them repeat
the number and spelling to the employee to ensure
accuracy.
Ask employees to verify the
information again once it is entered in your company’s
payroll records.
When W-2 forms are issued,
have employees double check the information one more time.
If there is an error, there is still time to issue a
corrected W-2 before mailing copies to the
government.
When employees get married or
otherwise change their names, remind them that they must
notify the SSA.
If you haven’t taken these steps or simply want to
double-check your records, there are several ways to verify
the information with the SSA, depending on the quantity of
data:
Five Names - You can verify the
information on up to five employees by telephoning the SSA. Have the following information
at hand when calling:
Company name, Your Employer Identification Number
(EIN), Employee SSN, Employee’s last name, first name, and middle
initial if applicable, Employee’s date of birth and Employee’s gender.
Fifty Names - To verify the
information on up to 50 employees, your company can submit a
paper list with the above data to the local Social Security Office.
More than 50 Names - Your company
will need to submit a simple registration form to use the
agency's Employee Verification Services (EVS) in order to
verify this number of employees or to submit data on
magnetic media. This service can be used both by employers and
by third-party submitters. See the instruction booklet for information
and requirements.
Online - You can verify the
information for up to 10 employees immediately, or up to
250,000 employees within one federal government business day
by using the agency’s Social Security Number Verification
Service (SSNVS).
While the other verification
methods can be used to check on information before you
actually hire someone, the online service can be used only
after individuals become employees and only for wage reporting
services. (See right-hand box above for more information on
using the online tool.)
What if You Find an
Error?
Suppose you already mailed W-2s to your employees and sent
copies to the SSA. Then, you discover an error. What should
you do?
First, you need to correct the information on
Form W-2c and provide the employee with a copy as soon as
possible. If the error involves only the employee's name
and/or Social Security Number, fill out the W-2c through item
i (do not complete boxes 1-20) and advise the
employee to make the change on the original. You do not need
to file a W-2c if the only error is the employee's
address.
You also need to fill out a Form W-3c and send
it, along with the top copy of the W-2c, to the SSA. The
address is provided on the W-3c.
For more detailed
information about fixing errors or if you need assistance,
contact your tax adviser or payroll services professional.
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