Social Security Notifying Employers Regarding Invalid SSNs

In March of 2019, The Social Security Administration began mailing notifications to employers identified as having at least one name and Social Security Number (SSN) combination submitted on wage and tax statement (Form W-2) that do not match their records. The purpose of the letter is to advise employers that corrections are needed in order for the agency to properly post its employee’s earnings to the correct record. There are a number of reasons why reported names and SSNs may not agree with Social Security records, such as typographical errors, unreported name changes, and inaccurate or incomplete employer records. A copy of the notice can be found here.

What You Need to Know

Employers should follow the instructions provided on the notice to register for an SSA Business Services On-line Account.  Instructions can be found here.

SSA suggests a 60-day response time when replying to these notices, but employers may make corrections after that date if they require more time.  There will be no additional notices sent nor any penalties assessed for failure to correct, but the uncorrected SSN’s will remain on the employers file and will be subject to future notification. Employers whose employees have provided invalid SSN’s should be instructed to go their local Social Security Office to seek correction.  Once employees have obtained a corrected Social Security Number, Employers should issue a form W2C to correct the SSN. Employers should only submit W2C’s for the most recent year, any errors for previous years will be automatically corrected by the SSA.

SSA has also provided resources to assist Employers in resolving the notices and also has published a list of Frequency Asked Questions.

SSA encourages employers to use their Social Security Number Verification System (SSNVS) to verify employees Social Security numbers to identify incorrect Social Security Numbers before filing forms W2. You should not use this letter to take any adverse action against an employee, such as laying off, suspending, firing, or discriminating against that individual, just because his or her SSN or name does not match our records. Any of those actions could, in fact, violate State or Federal law and subject you to legal consequences.

What You Need to Do Next

1. Register for Social Security Administration’s Business Services online https://secure.ssa.gov/acu/IRESWeb/registration.jsp
2. Review the list of invalid SSN’s

 https://www.ssa.gov/employer/documents/EmpRepStat.pdf

3. Review the SSN’s with employee records to identify any typographical error
4. If employee Records match, contact the employee and instruct them to go to the local SSA office to sort out the discrepancy (remember the presence of an invalid SSN does not indicate a lack of employment eligibility status)
5. Once employee provides the corrected information, or if the correct number is available in the employee’s file, create a W2C on SSA BSO Online reporting the correct SSN to the SSA. Only a W2C for the most recent year is required. A video tutorial is available at the link below:  https://www.youtube.com/watch?v=TGO0a7DzpX0
6. Be sure to update the employee record in Web Pay with the correct SSN to ensure reporting is correct going forward.

Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.

 This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.