SSA Moves Forward With Changes to Wage-Reporting System

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By Michael Baer  

The more than 1.2 million electronic files of 2013 Forms W-2 were processed through a Social Security Administration system that was designed to handle 125,000 submissions, said Tom Bricker, program analyst and project manager.

SSA has received nearly 202 million of the forms electronically and the agency is implementing changes to more efficiently receive and process the files, said Bricker, who spoke May 13 at the American Payroll Association's 2014 Congress in Minneapolis.

The federal government pays about 54 cents to fully process a valid Form W-2, Wage and Tax Statement, submitted on paper, Bricker said. Electronic Forms W-2 cost less than half a cent each to process, he said.

System Redesign

A redesigned system in how the earnings reports are accepted and recorded by the SSA is being implemented, Bricker said. The implementation is occurring with minimized effects on electronic filing formats, including the EFW2 format for W-2s and the EFW2C format for electronically filed Forms W-2c, he said.

The current system that allowed employers to make submissions without much review is to be eliminated, Bricker said.

Starting May 16, the SSA put in place tighter tolerances for errors in W-2 submissions, Bricker said. The SSA does not plan to accept as valid submissions filings with inaccurate record identification codes, invalid sequences, invalid record lengths and other extraneous data, he said.

In general, there will “zero tolerance” for formatting errors in electronic W-2 submissions, Bricker said.

Many of these issues can be resolved if employers use Accuwage, an SSA-provided software application that allows employers to check W-2 files prepared for electronic submission, Bricker said.

The new system would allow the SSA a quicker follow-up time with employers about submission failures. Correspondence is to be sent at 15 days after the original submission and again 30 days after a past-due date, Bricker said.

Additionally, changes are to allow the SSA to quickly transmit wage reports to the Internal Revenue Service. During one week in March, for example, the SSA transmitted more than 70 million W-2 wage reports to the IRS, Bricker said.

The Social Security Number Verification Service can be used to confirm that names and Social Security numbers of employees are valid, Bricker said. The service is not used to provide proof of identity, he said.

The Office of the Inspector General recently instructed the SSA to also alert employers when an individual is using a child's Social Security number, Bricker said. Work recently started on the delivery of the information, he said. Certain tolerances already were built in to the number verification system, he said, adding that a birth date can be one year off without triggering an error code.

To contact the reporter on this story: Michael Baer in Washington at mbaer@bna.com.

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