The Social Security Administration (SSA) recently announced that they will mail letters to employers that filed one or more 2019 Forms W-2 containing employee names and Social Security Numbers (SSNs) that did not match SSA’s records, beginning in December 2020.
The letter will advise the employer regarding the number of employee names and SSNs on 2019 Forms W-2 that did not match SSA’s records, and how to access the Forms W-2 that don’t match.
The letters will include a new attachment with instructions on how to register for and use Business Services Online (BSO) to view SSN mismatches, as well as how to file Forms W-2C. These instructions can be found at the link found below. There is a one-time registration at www.socialsecurity.gov/bso/bsowelcome.htm. If necessary, employers should correct any names and/or SSNs via IRS Form W2-C.
There are rumors suggesting that the IRS may impose information reporting penalties under Internal Revenue Code (IRC) sections 6721 and/or 6722 for failure to file and furnish correct Information Returns by the required due date. The penalties would apply if an employer:
- Fails to file timely
- Fails to include all information required to be shown on Form W-2
- Includes incorrect information on Form W-2 (including employee names and/or SSNs that don’t match government databases)
- Files on paper when required to file electronically
Penalties under IRC Section 6721 can be up to $270 per Form W-2 , indexed annually. A separate penalty under IRC Section 6722 (failure to furnish correct Information Returns) may also apply to the same error. If both penalties are assessed, the penalty could be as much as $540 per Form W-2, up to more than $6.6 million annually.
You may also call SSA at 800-772-6270; or send an e-mail to the SSA at , or get general information at www.socialsecurity.gov/employer.
SSA provides a free Social Security Number Verification Service (SSNVS) at https://www.ssa.gov/employer/ssnv.htm, which allows employers to verify employees’ names and SSNs in advance of filing Forms W-2. Using SSNVS can significantly reduce errors.