For information on the relevant law, publications, and other resources for administering Section 218 policies, see SL 10001.130C.

Compare the submitted Modification to the example language in the Agreement and Modification Exhibits, SL 40001.490.

Confirm that the State included any mandatory language in the Modification. For example, if closing agreement language is required by the nature of the Modification, ensure that the language appears in the Modification.

Confirm that the entity is a political subdivision (see 42 U.S.C. § 418(b)(2); 20 C.F.R. § 404.1202 for definitions). For information on political subdivisions, see SL 30001.311B – SL 30001.311C. The State should include a reference to the statutory authority that established the political subdivision's status. The State can provide this information on a separate sheet or include it within the Modification.

Confirm that the Modification includes the EIN for the entity seeking coverage.

Before 1983, federal law allowed the termination of coverage Agreements; federal law no longer allows termination of a coverage Agreement.

If a Modification concerns an entity that previously had a coverage Agreement that was later terminated, confirm that the Modification includes the following information per SL 40001.440:

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  A statement that the group’s coverage was previously terminated;

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  Effective date of the termination;

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  Previously assigned EIN; and

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  Modification number of the Agreement that was terminated.

Confirm that the effective date of coverage is not earlier than the last day of the sixth calendar year preceding the year in which the State mails or delivers by other means the Modification to SSA. For example, if the mailing or delivery date was December 26, 2027, the effective date of coverage for this Modification cannot be earlier than the last day of the sixth calendar year preceding 2027, which would be December 31, 2021. For additional information on the effective date of coverage, see 20 C.F.R. § 404.1215(d) and SL 30001.375.

Confirm that the controlling date, if specified by the State, is not earlier than the date the State mails or otherwise delivers the Modification to SSA. For additional information on the controlling date, see 20 C.F.R. § 404.1215(b) Controlling date for retroactive coverage and SL 30001.375 Effective Dates of Coverage.

EXCEPTION: In cases where the State submits an Error Modification to obtain retroactive coverage for erroneous contributions, the date of the error is the controlling date.

Check for optional exclusions contained in the Modification that are permitted by Federal and State laws (see SL 30001.357 Optional Exclusions). Make sure the descriptions of the optional exclusions conform to Federal law. If the State excludes part-time positions, the definition of part-time positions should be included in the Modification (see SL 40001.420B.1).

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  Check for and investigate any significant discrepancies between the name associated with the assigned EIN and the name listed in the Modification;

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  Check for and correct any misspellings in the name listed in the Modification, the accompanying certificate of referendum, or on any resolution or supporting documents provided; and

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  Check for and correct any discrepancies between the name listed in the Modification, the name in the certificate of referendum, and the name on any resolution or supporting documents provided.

Name discrepancies and misspellings may be corrected by using the procedures for minor corrections (see SL 40001.420E).

Confirm that the authorized State official(s) signed the Modification. When confirming that the required signatures are present, check to see if the State requires more than one signature. If the required signatures are not present, return the Modification to the State for the proper signatures.

If the State wants to add a signing official's name to the list of authorized officials, the State should inform the Section 218 specialist of the official's name, title, address, and extent of authority.

If the State has not opted into the electronic signing process, or if it has opted in but requests paper processing, then confirm that the State submitted at least two original Modifications with the handwritten signatures of the authorized State official(s).

If the State has opted into the electronic signing process, it may submit an electronic modification in PDF with electronic signature(s) of the authorized State official(s), rather than submitting paper copies with handwritten signatures.

For information on the State’s responsibilities when preparing a Modification, see SL 40001.420B.1 and, for States that have opted into the electronic signing process, see SL 40001.421D.4.

If the State's Agreement previously covered the entity being covered in the Modification but that coverage was terminated, the Section 218 specialist prepares and provides information with the relevant coverage history for the entity to Program, Fiscal, and Disclosure Law (PFDL) (see SL 40001.440 for coverage of a previously terminated group).

This information may include:

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  A statement regarding entity’s termination history;

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  The effective date of termination; and

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  Any previously assigned employer identification number (69-number) and Modification number that were terminated.

Confirm that the effective date specified in the Error Modification is the first day of the first period (quarter or year) for which the entity first filed erroneous wage reports. For Modification of an Agreement to correct errors, see 20 C.F.R. § 404.1216(b); SL 40001.465.

Use the Employer Query Report (ERQY) to confirm the date on which Social Security first reported and processed wages.

Use the Detailed Earnings Report (DEQY) to confirm the date on which erroneous payments began.

Confirm that the State or political subdivision did not receive a refund from IRS for the erroneous contributions. The State should include language in the Modification acknowledging no refund was received by the entity and must provide a written statement from the entity verifying that it received no refund.

Confirm that the State has provided a certification of referendum if the Modification involves a retirement system group.

Confirm whether the Modification seeks retroactive coverage. If the State requests retroactive coverage and that retroactivity will extend beyond IRS’s three-year statute of limitations on assessments, confirm that the Modification includes the required closing agreement language. However, if the State has provided evidence verifying FICA was paid for the entire retroactive period predating IRS’s statute of limitation and the Section 218 specialist confirmed the past payment of FICA is reflected in SSA’s existing records, no closing agreement is needed (see SL 40001.420J.2).

For more information on closing agreements, see SL 40001.420J.

If SSA approves the Modification, the Section 218 specialist should:

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  Contact the IRS closing agreement coordinator, via e-fax at 855-243-4014, to begin the closing agreement process (see SL 40001.420H.4) and

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  Notify the state administrator that the closing agreement process has begun with the IRS so the state administrator can assist the entity with following through on their obligation to enter into a closing agreement with the IRS.

Confirm that the State's notification of dissolution includes the following:

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  The name of the dissolved political subdivision;

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  The EIN assigned to this entity;

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  The relevant Modification Agreements that extended coverage to this entity;

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  The date of dissolution; and

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  The legal basis for dissolution.

Confirm that the State has submitted a separate notice of dissolution for each dissolved entity.

Obtain evidence from the State proving that the dissolution occurred as a matter of law. Where possible, the State should provide primary evidence of the dissolution. In cases where primary evidence of the dissolution is insufficient or unavailable, the State should provide additional secondary evidence of the dissolution.