TN 19 (04-09)

RS 01403.018 End-of-Year Pay Statement or Pay Stub

A. Policy for acceptable primary evidence of earnings

We accept end-of-year pay statements or stubs, etc., as primary evidence of earnings when there is no doubt that the pay statement belongs to the individual, i.e., it contains sufficient identifying information to clearly establish the employee to whom the statement refers to (employee name, address, personal identification number, etc.) and to clearly establish the employer’s identity, (employer’s name and address, employer identification number (EIN), etc.)

In some instances, the social security number (SSN) may not be displayed on the statement or only a portion of the SSN may be shown. The pay statement may be accepted as long as there is no question that the statement was issued by the employer (or his payroll agency) and belongs to the number holder (NH).

The end-of-year pay statement should contain the same information as found on a W-2 concerning the identification of the NH, the total earnings, FICA taxes paid, etc.

Do not accept an end-of-year pay statement as primary evidence of earnings if:

  • The pay statement does not provided sufficient identifying information; or

  • There is question about the amount of earnings, e.g., the statement does not provide a total of earnings for the year; or

  • The pay statement does not show FICA and or MQGE taxes paid.

B. Procedure for Accepting End-of-year pay statement as primary evidence

  1. Review the information on the pay statement to verify that it belongs to the NH.

  2. Determine the year-to-date earnings. In most instances, the end of the calendar year and the final pay statement date for earnings paid in the calendar year are different. Question the NH concerning the length of the pay periods, the beginning and ending days for the pay period to verify the pay statement is the final one for the year.

    EXAMPLE: Mr. Smith’s final 2008 pay period began December 7, 2008, and ended December 20, 2008. He was paid for this period on December 29, 2008. Thus, his total earnings paid in 2008 are for his employment through December 20, 2008. While the first pay check Mr. Smith received in 2009 was for his earnings from December 21 through January 3, 2009, do not include these earnings when calculating his 2008 earnings, as they were paid and received in 2009. Earnings are credited based upon when they are paid, not when they are earned. (For when wages are earned for annual earnings test purposes see RS 02505.010)

  3. If there is a question that the pay statement presented may not be the final statement of the year contact the employer for verification.

  4. Verify the pay statement provides FICA and or MQGE taxes paid.

  5. If the year is a pre-lag earnings year, add the earnings via Earnings Modernization Item Correction System (ICOR). Pending the update to the ICOR Basis for Change field accepting end-of-year pay statements as primary evidence, the Basis for Change field should be completed as “Preferred secondary evidence.” The rationale should state simply: End-of-year pay statement-primary evidence.

  6. In order to prevent possible future overpayments when earnings are added as the result of an end-of-year pay statement, include the following statement in ICOR in Remarks (EMRK): Earnings are added using the end-of-year pay statement in lieu of a W-2. If a W-2 is presented at a later date, the W-2 takes precedence over any end-of-year pay statement or pay stub unless evidence indicates otherwise.

    EXAMPLE:

    The NH presents an end-of-year pay statement as evidence of his 2008 earnings. Earnings of $50,500 are added to the earnings record via ICOR. The employer subsequently submits a W-2 with earnings of $49,200. The pay statement did not reflect the payment to the NH’s 401 or deferred compensation plan. Since the earnings are not an exact duplicate, the original posting will remain on the social security record, creating a possible overpayment. The original posting of $50,500 may be deleted because the employer W-2 is of higher probative value.

  7. If the year in question is a lag earnings year, and the employer has not filed a report for the year, the earnings may not be added via ICOR (for MSOM EM 022.002) but should be used for computational purposes. (For development and use of lag earnings in claims cases, see RS 01404.005C.)

  8. If the year is a lag year and the employer has filed a report for the year, then the lag earnings may be added or corrected. For example: Mr. Smith applies for retirement benefits in June 2009. He presents the final pay statement for 2008 as proof of his 2008 earnings. A check of the employer reports for 2008 show that SSA has processed a report from his employer for 2008. However, no earnings are posted to Mr. Smith’s earnings record for 2008. Because an employer report has been filed, add the earnings via ICOR.

  9. Do not accept the pay statement as primary evidence if:

    1. there is a question concerning the identity of the NH;

    2. the pay statement does not belongs to the NH;

    3. the total amount of the y