Determine if the Form W-2 or “free Form W-2” is acceptable as evidence of earnings per RS 01403.040 - 048. Also apply the following rules:
The Form W-2 must be for a period in which the time limitations for correcting the record has not expired.
The Form W-2 can be for a period in which the time limitation has expired if one of the exceptions to the time limitation is applicable. See RS 02201.020.
There must be no evidence that a disputed coverage or wage issue is involved.
There can be no contrary evidence in file such as an incorrect copy of the Form W-2 or an adjustment report which reduced the earnings below the amount shown on the Form W-2.
If our microfilm record of the processed W-2 shows a different amount of FICA wages than the employee's copy, have the field office 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 that the originally reported amount is correct.
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:
FORM W-2 OR STATEMENT IS FOR A LAG YEAR
Process per RM 03812.010B.
MULTIPLE DISCREPANT EMPLOYERS ARE INVOLVED AND AN ACCEPTABLE FORM W-2 OR STATEMENT IS NOT IN FILE FOR ALL DISCREPANT EMPLOYERS
Process as follows:
For the employer(s) for which a Form W-2 or statement is in file, annotate the SSA-7009 or MEF/SSA-1826 printout(s) “Acceptable W-2 in file.”
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.
POSTED EARNINGS ARE GREATER THAN ALLEGATION OR FORM W-2/STATEMENT
Establish an ED and forward to the appropriate FO per RM03803.055.
Before preparing an SSA-7010 U5 per D. below, apply the following rules:
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.
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.
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.
Prepare a draft of Form SSA-7010 U5 per RM 02200ff to adjust the earnings record based on the Form W-2/statement furnished. If quarterly wages are involved, apply the following instructions:
Determine the correct amount of earnings for each discrepant period by considering the period alleged, the total wages earned, and the pattern of reporting.
W-2 shows total wages of $25,000 and FICA wages of $10,800 for 1973. The E/R shows the following: $6250 for 3/73; NR for 6/73; 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.
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.
If the correct amount(s) for each period can be determined:
Check column 11(b) or 11(c) (“NR” or “EO”) or enter in 11(d) the amount already posted, as appropriate.
Enter in column 11(e) the correct amount of earnings for the period(s).
Enter in block 13 “Amount(s) based on Form W-2 issued by employer showing $ (enter total) total FICA wages. Amount(s) may not agree with employer's quarterly reports.”
If the correct amount(s) for each period cannot be determined and earnings are posted for all alleged quarters:
Enter in column 11(a) the latest period posted for the year in question.
Enter in column 11(d) the amount of earnings already posted.
Enter in column 11(e) the difference between the total FICA wages shown on Form W-2 and the total of the earnings posted in the other periods.
Enter in block 13 “Amount based on Form W-2 issued by employer showing $ (enter total) total FICA wages. Earnings may not be added to the correct quarter. Employer also reported (show the other quarterly amounts and periods for the year.)”
If the correct amount(s) for each period cannot be determined and earnings are not posted for all alleged periods:
If one open period, enter in column 11(e) the difference between the total FICA wages shown on Form W-2 and the total of the earnings posted in the other periods.
If more than one open period, enter in column 11(e) an equal amount of the difference for each alleged open period.
Check column 11(b) or 11(c) (“NR” or “EO”) as appropriate for each period being adjusted.
Enter in block 13 “Amount(s) based on Form W-2 issued by employer showing $ (enter total) total FICA wages. Amounts shown are allocated from the annual total and may not agree with the employer's quarterly report.”
NOTE: Substitute “wage and tax statement” for “Form W-2” in block 13 whenever applicable.
Prepare a Form SSA-6222, Correspondence Assignment Sheet, to have a closeout letter typed per RM 03803.071 on each ED case for which a Form SSA-7010 U5 has been completed.
Include the following information in the closeout letter:
Inform the individual of any action taken to correct his/her earnings record.
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 he/she has reported SEI in excess of the maximum and may be entitled to a refund of SE tax. Advise him/her 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 in which self-employment income was derived.
If there is a variance between total wages and FICA wages shown on the W-2 /statement and the individual alleged total wages, explain that the total pay apparently included an amount that was not wages for social security purposes. We have 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.
Itemize only to the extent that the file indicates is necessary, and answer any questions that were asked.
Include the reconsideration paragraph in each letter.
In any case where an original W-2 is received, obtain a machine copy of the document, and return the original with the reply to the individual.
NOTE: The original W-2 may be returned to the wage earner with Form SSA-L3423 prior to release of the closeout letter in order to ensure that it does not get lost. A machine copy of the document must be retained with the case.
Place the case material in an ED folder.
Annotate the control system that the case is an ED per RM 05000ff.
Attach the SSA-7010 U5(s) (draft) and the SSA-6222 to the outside front flap of the ED folder and forward for typing.
Review the typed letter and Form(s) SSA-7010 U5 for errors.
Assemble all case material, indicate filing, and complete the disposition block on the ED folder per established procedure.
Release the case material, the letter, and copies 1, 2, 3, and 4 of the SSA-7010 U5 for review per established guidelines.
Review the case material, letter, and SSA-7010 U5(s) for accuracy per established procedures.
Release letter for mailing and the SSA-7010 U5(s) for processing per RM 02200ff.
Return case material for filing.
Close the case on the electronic control system.