SSA Opens Accelerated Tax-Filing Season By Processing 177 Million 2016 Forms W-2s

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By Caitlin Reilly

The 2017 filing season opened with about 177 million employer-filed copies of Form W-2, Wage and Tax Statement, sent to the Social Security Administration a month earlier than in 2016, an agency official said. Feb. 2.

Employers were to file the tax year 2016 W-2 with SSA by Jan. 31, about a month earlier than in previous years. About 162 million of the forms were sent to the Internal Revenue Service, said Tim McGarvey, the agency's information technology manager. The SSA, which has the capacity to process up to 25 million W-2s a day, sends complete information to the IRS, he said.

The SSA received 99 percent of the forms it expected, based on forms filed in 2016 for tax year 2015, McGarvey said. The agency received close to 1.4 million wage submissions from employers and payroll providers, he said.

Filing season for tax year 2016 forms started Dec. 9, 2016, and the SSA encouraged employers to file early to avoid a flood of forms in the last days of the filing season, McGarvey said. The effort was “successful to a point,” and the agency plans to continue to encourage early filing in the future, he said.

The SSA is concentrating on electronic data, but expects 10 percent of the forms it receives to be submitted on paper, McGarvey said. The agency expects to turn attention to forms submitted on paper by mid-February, he said.

Deadline Moved Up to Help Fight Tax Fraud

The 2017 filing season was the first year with an accelerated wage reporting schedule. For 2017, employer W-2 copies were to be filed with the SSA by Jan. 31. The deadline was moved up from the Feb. 29, 2016, deadline for forms submitted on paper and March 31 deadline for forms submitted electronically, under the 2015 Consolidated Appropriations Act (Pub. L. 114-113) signed Dec. 18, 2015, by President Barack Obama.

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

Additionally, about 48 million 2016 W-2s included placement of a verification code in Box 9 on copies B and C as part of a pilot program to fight tax fraud and identity theft. The program included the code on 1.7 million W-2s for tax year 2015. The verification code box again is included on the 2017 W-2, which was released Jan. 30 by the IRS. Efforts to continue expanding the verification programs are under consideration at the agency.

The decision to move the filing date earlier appears to have had a beneficial effect. In 2016, 135 million forms were processed by the SSA by March 3, three days after the deadline for printed W-2s but before the March 31 deadline for electronic versions of the form, said Ed Kernan, a senior SSA analyst. That number represented about half the forms expected to be filed by the close of filing season March 31, he said.

So far this filing season, rejections were in line with W-2 forms filed last year, McGarvey said.

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