TN 22 (03-21)

RM 03803.051 Processing Incomplete Cases Containing a Form W-2 or a Wage and Tax Statement in Lieu of a Form W-2

A. Determine if the Form W-2 or “free Form W-2” is acceptable earnings evidence per RS 01403.040 - 044. Also apply the following rules:

1. 1. 

   The Form W-2 must be for a period where the time limitations for correcting the record has not expired.

   Exception:

   The Form W-2 can be for a period where the time limitation has expired if one of the exceptions to the time limitation is applicable. See RS 02201.020.

2. 2. 

   There must be no evidence a disputed coverage or wage issue is involved.

3. 3. 

   There can be no contrary evidence in file, such as, an incorrect copy of the Form W-2 or an adjustment report that reduced the earnings below the amount shown on the Form W-2.

4. 4. 

   If the microfilm record of the processed W-2 shows a different amount of FICA wages than the employee's copy, request the field office (FO) contact the employer to explain the difference. Attach a copy of both the microfilm record and the employee's W-2 to the development request. Also, instruct the FO to contact the employee for acceptance of the employer statement or additional secondary evidence if the employer insists the originally reported amount is correct.

   B. If the Form(s) W-2 or statement(s) included with the case are determined to be acceptable per A above, review the case material for the following conditions and take the applicable action indicated:

   1. 1. 

      FORM W-2 OR STATEMENT IS FOR A LAG YEAR

      Process per RM 03812.010B.

      2. MULTIPLE DISCREPANT EMPLOYERS ARE INVOLVED AND AN ACCEPTABLE FORM W-2 OR STATEMENT IS NOT IN FILE FOR ALL DISCREPANT EMPLOYERS

      Process as follows:

   1. a. 

      For the employer(s) for which a Form W-2 or statement is in file, annotate the MEF/SSA-1826 printout(s) “Acceptable W-2 in file.”

   2. b. 

      For the employer(s) for which a Form W-2 or statement is not in file, process per applicable instructions in RM 03803.053 or RM 03803.055.

      3. POSTED EARNINGS ARE GREATER THAN ALLEGATION OR FORM W-2/STATEMENT

      Establish an earnings discrepancy (ED) and forward to the appropriate FO per RM 03803.055.

   C. Apply the following rules when processing incomplete cases:

   1. 1. 

      MAXIMUM EARNINGS INVOLVED

      Posted earnings plus SEI/wages being credited must not exceed the yearly maximum for each employer. Establish total FICA wages and SEI up to the maximum. If total SEI and FICA wages (shown on the Form W-2/statement) total more than the maximum, include in the closeout letter the information cited in E.2. below.

   2. 2. 

      VARIANCE BETWEEN TOTAL WAGES AND FICA WAGES SHOWN ON W-2/STATEMENT (NON-MAXIMUM SITUATION)

      Establish the amount shown as FICA wages (refer to RS 01403.044). Include in the closeout letter the information cited in E.3. below.

   3. 3. 

      MILITARY RESERVIST INVOLVED AND EARNINGS FROM ACTIVE DUTY FOR TRAINING ALLEGED

      The training period must be for 14 or more days to be covered for Social Security purposes. For years prior to 1978, add the wages to the quarter(s) in which the earnings were paid. If unknown, establish the earnings in the second quarter.

   D. Review a Detailed Earnings (DEQY) to determine if the earnings record needs to be adjusted based on the Form W-2/statement furnished. If quarterly wages are involved, apply the following instructions:

   1. 1. 

      Determine the correct amount of earnings for each discrepant period by considering the period alleged, the total wages earned, and the pattern of reporting.

      Example 1:

      W-2 shows total wages of $25,000 and FICA wages of $10,800 for 1973. The earnings record (E/R) shows the following: $6250 for 3/73; non receipt (NR) for 6/73; employee omitted (EO) for 9/73, and EO for 12/73. The additional earnings of $4550 should be added to the 6/73 quarter because the NH should have reached the maximum in the second quarter.

      Example 2:

      W-2 shows total and FICA wages of $8000 for 1977. The earnings record shows the following: $2000 for 03/77; $2000 for 06/77; $200 for 09/77, and $2000 for 12/77. The additional earnings of $1800 should be added to the 09/77 quarter because it is apparent from the pattern of reporting that the NH earned $2000 in each quarter.

   2. 2. 

      If the correct amount(s) for each period can be determined, follow the appropriate earnings adjustment procedures.

      1. a. 

      3. If the correct amount(s) for each period cannot be determined and earnings are posted for all alleged quarters, annotate the appropriate remarks on the electronic control system.

      4. If the correct amount(s) for each period cannot be determined and earnings are not posted for all alleged periods, annotate the appropriate remarks on the electronic control system.

   E. Prepare a closeout letter. Include the following information as appropriate on the electronic control system:

   1. 1. 

      Inform the individual of any action taken to correct their earnings record.

   2. 2. 

      If maximum earnings are involved and SEI and FICA wages (shown on the Form W-2/statement) total more than the maximum for the year in question, inform the NH that they reported SEI in excess of the maximum and may be entitled to a refund of SE tax. Advise the individual that, to obtain a refund, he/she must file an amended tax return with the Internal Revenue Service within 3 years, 3 months, and 15 days after the taxable year that the self-employment income originated.

   3. 3. 

      If there is a variance between total wages and FICA wages shown on the W-2 /statement and the individual alleged total wages, explain the total pay apparently included an amount that was not covered wages for Social Security purposes. Wages are established earnings based on the Social Security (FICA) contributions withheld.

      NOTE: If the earnings record agrees with the total FICA wages, no adjustment is necessary. Explain that since the amount reported is correct with respect to the Social Security (FICA) contributions withheld, as shown on the Form W-2, the pay reported appears to be correct.

   4. 4. 

      Itemize only to the extent the file indicates is necessary and respond to all questions.

   5. 5. 

      Include the reconsideration paragraph in each letter.

   F. If an original W-2 is received, photocopy the document, and return the original with the reply to the individual.

   NOTE: Photocopy the W-2 and return the original to the wage earner with Form SSA-L3423 prior to release of the closeout letter. Retain the copy with the case.

   G. Place the case material in an ED folder.

   H. Annotate the SSA-6629 that the case is an ED per RM 05015.004.

5. 5. 

   I. Assemble all case material, indicate filing, and complete the disposition block on the ED folder per established procedure.

6. 6. 

   J. Release the case material and the notice for review per established guidelines.

7. 7. 

   K. Review the case material and notice for accuracy per established procedures.

8. 8. 

   L. Release the notice for mailing per RM 02200ff.

9. 9. 

   M. Return case material for filing.

10. 10. 

    N. Close the case on the electronic control system.