Social Security Processes 240 Million W-2s So Far in 2018

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By Keith Hill

More than 240 million Forms W-2, Wage and Tax Statement, that were filed by employers for tax year 2017 were processed by the Social Security Administration by mid-April, an agency official said April 12.

The number of forms processed by April 11 compares with about 235 million W-2s for tax year 2016 processed by early March 2017.

The agency also processed about 1.57 million 2017 Forms W-2c, Corrected Wage and Tax Statement, by April 11, Scott Pedersen, SSA program manager, told Bloomberg Tax in an email. The agency processed almost twice that number in the 2017 filing season, the SSA said.

Recapping 2017 Filing Season

More than 253 million W-2s were processed by the Social Security Administration in 2017, up 2.4 percent from the 247 million W-2s processed in 2016, the agency told Bloomberg Tax on March 30. The agency has the ability to process about 25 million W-2s a day.

Additionally, about 6 million Forms W-2c were filed in 2017, the agency said.

The 2017 filing season was the first with an accelerated wage-reporting schedule. Employers were required to file copies of the 2016 W-2 with the SSA by Jan. 31, almost a month earlier than in previous years. The deadline was moved up from Feb. 29, 2016, for forms submitted on paper and March 31 for forms submitted electronically, under the 2015 Consolidated Appropriations Act (Pub. L. 114-113).

The number of late submissions in 2017 rose by several thousand, compared with 2016, most likely from the earlier deadline, the agency said.

The goal of earlier W-2 reporting was to allow the Internal Revenue Service to quickly verify income and not require the agency to contact employers of taxpayers whose returns were caught by identity-theft filters.

Looking Ahead to 2019

The IRS is assessing its W-2 verification code pilot program for effectiveness and enhancements, said Ken Corbin, IRS director of return integrity and compliance services. The program, which started in 2016, is expected to be renewed for the 2019 filing season, he said March 12.

The program uses a 16-character code to authenticate employee data and match individual tax returns with the proper refund amount. Participating payroll service providers include the code in Box 9 of copies B and C of employees’ W-2 that are filed electronically.

About 58 million W-2s that were issued with verification codes were received through Feb. 24, most of which had lower-case characters, compared with the use of upper-case and lower-case characters in 2017, Corbin said. The use of lower-case characters, which was adopted after the IRS received supporting feedback from employers and preparers, was expected to reduce filing errors, he said.

The SSA said it plans to work with the IRS in 2018 to determine if potential changes would be required in wage filing for tax year 2019.

To contact the reporter on this story: Keith Hill in Washington at khill@bloombergtax.com. To contact the editor responsible for this story: Michael Baer at mbaer@bloombergtax.com

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