Identification Number:
SL 80001 TN 1
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:Reporting
Type:POMS Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part SL – State and Local Coverage Handbook
Chapter 800 – Reporting
Subchapter 01 – Reporting
Transmittal No. 1, 01/29/2020

Audience

Originating Component

OISP

Effective Date

Upon Receipt

Background

We are streamlining policy for clarity, merging sections, and archiving duplicate information. We are also amending the format in several of the sections, standardizing citations and abbreviations, and creating new policy to expand on existing sections for better understanding of content.

Summary of Changes

SL 80001.801 Reporting Responsibilities

  • We amended the title to remove the word “State,” as we are merging sections together.

  • We reformatted and renumbered the subsections. Content that was formerly in subsection A is now in subsection A2. Content that was formerly in subsection B is now in subsection A1.

  • We amended the heading for subsection A to “State Responsibilities.”

  • In subsection A.1, we:

    • Added a public law citation to give context for the information pre-1987.

    • Added the specific reference to the IRS Form needed for quarterly tax returns.

    • Reformatted the dash used in the bulleted list of applicable Sections of the Act for pre-1987 wages.

    • Removed in the Note a reference to a two-year period for filing an appeal in federal court, because it was a duplicative of information included in the prior paragraph.

  • We changed references to the SLCH in subsection A.2 to references to the SL POMS.

  • In subsection A.2, We added explanatory text to add context to 69-numbers for the purpose of pre-1987 contributions and further clarified the language, including updating the contact language for those that would have experienced a problem with a pre-1987 coverage Federal Reserve Bank deposit.

  • We added a note to subsection A2 which contains content that was formerly in SL 80001.805.

  • We renamed subsection B to “SSA Responsibilities” and folded in content into B1 that was formerly in SL 80001.810. Subsection B2 contains content that was formerly in SL 80001.820. This content was rephrased slightly for clarity purposes.

  • We created a new subsection C “IRS Responsibilities” and folded in content that was formerly in SL 80001.815.

SL 80001.805 State’s Request for Review (Pre-1987)

We archived this section and folded the content into SL 80001.801A.2 as a NOTE.

SL 80001.810 SSA Responsibilities

We archived this section and folded the content into SL 80001.801B.1.

SL 80001.815 IRS Responsibilities

We archived this section and folded the content into SL 80001.801C.

SL 80001.820 SSA Responsibilities for Pre-1987 Contributions

We archived this section and folded the content into SL 80001.801B.2.

SL 80001.830 Correction Reports

  • We reformatted the subsection titles from all CAPs to sentence case.

  • We updated subsections A, B, and C with current citations and information regarding Forms W-2, W-2c, W-3, and W-3c and removed references in these sections to magnetic media and provided electronic resources instead.

  • In subsection B, we added the publication numbers to the references to SSA instructions for filing Forms W-2 and W2c Electronically.

  • We expanded the section and created subsection D. We folded in content that was formerly in SL 80001.840.

  • We expanded the section and created subsection E. We folded in content that was formerly in SL 80001.835.

  • We created subsection F “References” that indicates SSA’s resource for Employer W-2 filing instructions.

SL 80001.835 Corrections for Tax Years Before 1991

We archived this section and folded the content into newly created subsection E under SL 80001.830.

SL 80001.840 Corrections for Tax Years 1991 and Later

We archived this section and folded the content into newly created subsection D under SL 80001.830.

Conversion Table
Old POMS ReferenceNew POMS Reference
SL 80001.805SL 80001.801
SL 80001.810SL 80001.801
SL 80001.815SL 80001.801
SL 80001.820SL 80001.801
SL 80001.835SL 80001.830
SL 80001.840SL 80001.830

SL 80001.801 Reporting Responsibilities

A. State Responsibilities

1. Beginning January 1, 1987

Section 9002 of Public Law 99-509 transferred responsibility for collecting Federal Insurance Contributions Act (FICA) taxes for wages paid under Section 218 Agreements from the Social Security Administration (SSA) and the States to the Internal Revenue Service (IRS). State and local employers are required to file quarterly IRS Form 941, Employer's Quarterly Federal Tax Return, with IRS. IRS is responsible for collecting Social Security and Medicare taxes, verifying the amount owed, and determining that the amount owed has been deposited.

The following subsections of Section 218 of the Social Security Act (Act) were repealed but still remain applicable to wages paid before 1987:

  • Section 218(e)—Payments and Reports by States;

  • Section 218(h)—Deposits in Trust Funds;

  • Section 218(i)—Regulations;

  • Section 218(j)—Failure to Make Payments;

  • Section 218(q)—Time Limitation on Assessments;

  • Section 218(r)—Time Limitation on Credits and Refunds;

  • Section 218(s)—Review by Secretary;

  • Section 218(t)—Review by Court; and

  • Section 218(w)—Payments of Medicare Tax.

Although the State’s liability and collection responsibility ended after 1986, States are still responsible for resolving Social Security payment and wage reporting questions concerning wages paid before 1987.

2. Pre-1987

SSA was responsible for ensuring that each State paid the correct amount of Social Security contributions for all employees covered under its Section 218 Agreement. The State Social Security Administrators were responsible for ensuring that State and local government employers filed timely and accurate returns and that they collected and paid the proper amount of Social Security and Medicare contributions to the Federal government.

With few exceptions, all required wage reports have been filed by all States for years prior to 1987 and all audits closed. Therefore, information regarding the reporting of pre-1987 wages, liability, auditing, adjustments, and corrections to pre-1987 wage reports is not included in the SL POMS. However, this information is still pertinent with respect to wages paid before 1987. Similarly, the statute of limitations concerning the extent of time under which States are held liable for contributions on wages paid prior to 1987 are not included in the SL POMS.

NOTE: 

Section 218(s) of the Act allowed a State to request administrative review of the following types of determinations issued to the State on wages paid prior to 1987:

  • An assessment by SSA of an amount due;

  • An allowance of a credit or refund of an overpayment; or

  • A disallowance of a State's claim for credit or refund.

The State had to file the request for review within 90 days after notification from SSA of the determination. Section 218(t) of the Act provided States the right to appeal SSA’s decision on the above determinations in Federal court within two years of receiving the Section 218(s) decision.

Although Sections 218(s) and (t) of the Act were repealed, Section 218(t) still applies to determinations SSA issued pursuant to Section 218(s).

B. SSA responsibilities

1. Current

  • Review and process Section 218 Agreements and Modifications;

  • Define and resolve issues related to Social Security coverage and benefits, including but not limited to, defining wages for Social Security coverage purposes;

  • Determine the amount of wages placed on an individual’s Social Security and Medicare earnings record, and correct erroneously posted amounts, as required by law;

  • Review Social Security and Medicare coverage, ensuring proper Social Security coverage and benefit payments;

  • Receive and process annual wage reports (IRS Forms W-2 and W-3 data) from employers;

  • Answer reporting questions from employers, whether filing via e-file , or paper; and assist employers in reporting correctly; and

  • Assist employers with reconciliation of Forms W-2 data with Form 941 totals.

2. Pre-1987 contributions

Prior to 1987, SSA assigned identification numbers (sometimes referred to as "69-numbers") to identify State and local entities and interstate instrumentalities that obtained Social Security coverage under a Section 218 Agreement. Because SSA was responsible for processing the wage reports and accounting for the Social Security contributions paid by State and local government employers, this number was used for reporting and record keeping purposes through tax year 1986.

Beginning with wages paid after 1986, State and local government employers with Section 218 Agreements report Social Security and/or Medicare Qualified Government Employment (MQGE) wages under their IRS-assigned Federal Employer Identification Numbers (EINs).

Some States, on their own, assign and use 69-numbers for administrative recordkeeping purposes. If a State uses a 69-number and submits a Modification that extends coverage to one or more years prior to 1987, the State should notify the SSA regional office in a cover letter what 69-number(s) should be used for the newly covered entity. However, the State still needs to provide the EIN number assigned by IRS in the Modification.

If retroactive coverage involves periods prior to 1987, the State needs to make the deposit with a Federal Reserve Bank (FRB) or branch in the same manner that pre-1987 deposits were made. This is because those subsections of Section 218 of the Act that were repealed by Public Law 99-509 are still in effect for pre-1987 years and continue to govern deposits. If the State experiences problems with a FRB deposit, contact the SSA Office of Income Security Programs.

C. IRS responsibilities

  • Advise and enforce reporting requirements for Social Security and Medicare taxes;

  • Advise and enforce withholding and depositing requirements for Social Security and Medicare taxes;

  • Receive and process IRS Forms 941;

  • Audit and collect Social Security and Medicare taxes;

  • Define and resolve employment tax liability issues;

  • Determine FICA refund requests; and

  • Advise SSA and state administrators of tax issues, clarify issues, and respond to questions from SSA, state administrators, and employers on tax matters.

SL 80001.830 Correction Reports

A. Paper reports

The Internal Revenue Service (IRS) publishes annual instructions (General Instructions for Forms W-2 and W-3 (Including Forms W-2AS, W-2CM, W-2GU, W-2VI, W-3SS, W-2c, and W-3c) for filing Forms W-2 (Wage and Tax Statement) and W-3 (Transmittal of Wage and Tax Statements). For information on correcting previously filed paper forms, refer to section heading General Instructions for Forms W-2c and W-3c.

B. Electronic reports

SSA annually publishes specifications for filing electronic W-2c (Corrected Wage and Tax Statements) and W-3c (Transmittal of Corrected Wage and Tax Statements). These instructions are contained in SSA’s Specifications for Filing Forms W-2 and W-2c Electronically (EFW2C Publication 42-007 and EFW3C Publication 42-014), respectively.

C. Specific instructions for making corrections

See IRS’ General Instructions for Forms W-2c and W-3c (Including Forms W-2AS, W-2CM, W-2GU, W-2VI, W-3SS, W-2c, and W-3c)) for special reporting situations involving Forms W-2c and W-3c as well as SSA’s publication (Specifications for Filing Forms W-2c Electronically (EFW2C) (Publication 42-014)).

D. Corrections for tax years 1991 and later

Forms W-2c correcting only Social Security wages and Social Security tips for an employee previously reported for Medicare Qualified Government Employment (MQGE)/Medicare for 1991 or later must show the total MQGE/Medicare wages previously reported in both the “Previously reported” and “Correct information” Medicare wages and tips fields, even if there is no change to the MQGE/Medicare wages and tips previously reported.

E. Corrections for tax years before 1991

Show corrections for Social Security and Medicare (full-Federal Insurance Contributions Act (FICA) wages, tips or taxes in the boxes labeled, "Social Security tax withheld," "Social Security wages," and "Social Security tips" only.

To show corrections for MQGE wages:

  • Paper reports—show changes in boxes labeled Medicare wages and tips and Medicare tax withheld and

  • Magnetic media reports—refer to MMREF-2 publication and contact your State’s Employer Service Liaison Officer (ESLO), if necessary.

If reporting MQGE wages for tax year 1986, report the wages under the IRS Federal Employment Identification Number (EIN). Do not use the 69-number.

F. References

For more information on filing corrected paper or electronic wage reports, or general information on employer wage reporting, visit SSA’s Employer W-2 Filing Instructions and Information. Several online guides are available to assist in resolving error conditions.


SL 80001 TN 1 - Reporting - 1/29/2020