Electronic Filing of 2013 W-2s Sets Record; Forms Held Back From Processing Decline

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By Howard Perlman  

The number of Forms W-2 filed electronically and processed for 2013 already has exceeded the total filed for the previous tax year, the Social Security Administration said April 14.

About 197.7 million 2013 Forms W-2, Wage and Tax Statement, were processed by the SSA, exceeding the record 197 million electronically filed W-2s processed for 2012, said Tom Bricker, an SSA analyst. In the past few years, the number of electronic W-2s processed by mid-April was millions lower than the total number of W-2s filed electronically for the year, he said.

Final data for 2013 likely would indicate a continued shift toward filing W-2s electronically instead of filing paper forms. Based on available final data, a higher percentage of W-2s were filed electronically in 2012 than for previous years, Bricker said in an e-mail to Bloomberg BNA April 14.

“In 2013, SSA received 87.2 percent of all [2012] W-2s electronically, surpassing IRS's 80 percent mandate,” Bricker said. There were 226 million W-2s filed in 2012, of which 197 million were filed electronically.

For 2011, 191 million of 221 million W-2s were filed electronically, or 86.4 percent. For 2010, 185 million of 217 million W-2s were filed electronically, or 85.3 percent.

Employers increasingly are filing W-2s electronically in part because of technological advances and because the SSA and the Internal Revenue Service improved the electronic filing, said Adam Lambert, national leader for the employment tax services practice of Grant Thornton LLP.

“It's a lot easier to format records on your system into a file that can be easily uploaded,” Lambert told Bloomberg BNA in a phone interview April 21.

Decrease in Number of Forms Sent to SSA Holding File

The annual number of Forms W-2 with earnings data that the SSA was unable to post to employees' work credit accounts because of identification information mismatches has declined.

Although data regarding uncredited 2012 and 2013 Forms W-2 are unavailable, more than 7.1 million W-2s filed for 2011 were placed in an SSA holding file because they contained names or Social Security numbers that did not match those on record, Bricker said. The 7.1 million forms represented 3.2 percent of all W-2s filed for 2011, compared with 3.4 percent for 2010.

Compliance has increased because employers recognized that the IRS has been issuing penalties for using incorrect taxpayer identification numbers, Lambert said, adding that employees also benefit from improved accuracy.

“There is a vested interest by employees so they have proper credits for Social Security wage purposes, and there is a vested interest by employers to reduce penalties by having stronger procedures in place,” Lambert said.

In February, Bricker said the SSA would not accept forms with invalid employer identification codes, starting with electronic Forms W-2 and W-2c filed for tax year 2014.

 

To contact the reporter on this story: Howard Perlman in Washington at hperlman@bna.com

To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bna.com