PROGRAM OPERATIONS MANUAL SYSTEMPart RS – Retirement and Survivors InsuranceChapter 014 – WagesSubchapter 03 – Wage EvidenceTransmittal No. 23, 04/29/2021
This is a Quick Action Transmittal. These revisions do not change or introduce new policy or procedure. We are providing clarification on existing POMS. Internal Revenue Service (IRS) issued final regulations (TD 9861, Use of Truncated Taxpayer Identification
Numbers on Forms W-2, Wage and Tax Statement, Furnished to Employees), which allow employers to truncate employees' Social Security Numbers on copies B and C of Forms W-2 that are furnished to employees, effective for Forms W-2 required to be furnished after 12/31/2020 (i.e., Forms W-2 for calendar year 2020).
Summary of Changes
RS 01403.040 Acceptance of Forms W-2/W-2c as Evidence of Wages
We are adding a NOTE to RS 01403.040A to provide clarification that SSA can accept W-2/W-2c copies (B and C) with truncated SSNs as evidence of wages.
Forms W-2/W-2c must be completed as required by IRS. Employer-prepared forms which meet IRS specifications are acceptable (see RS 01403.041 and RS 01403.042).
NOTE: IRS permits employers to truncate Social Security numbers (SSNs) on employee copies (B and C) of Forms W-2 and W-2c. Truncated SSNs are not allowed on Copy A (SSA copy).
Therefore, Forms W-2/W-2c, copies (B and C) with truncated SSN’s are acceptable evidence of wages as long as it contains sufficient identifying information to clearly establish the employee to whom W-2/W-2c 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.).
Form W-2 is accepted as evidence of lag wages if no coverage or wage issue is involved. Such an issue may be present if the Form W-2 does not show Social Security tax withheld.
Form W-2 is accepted as evidence of prelag wages provided:
insured status is not involved; and
there is no evidence that a coverage or wage issue is involved. Such an issue may be present if the Form W-2 does not show Social Security tax withheld. Refer to RS 01404.175 for policy guidelines.
Forms W-2/W-2c are multiple part forms. All copies are acceptable if the requirements in RS 01403.041 and RS 01403.042 are met. See RS 01403.043 for policy on acceptable copies of Forms W-2/W-2c.
Form 499 R-2/W-2 (Withholding Statement used in Puerto Rico) is acceptable as primary evidence for years 1979 and later, but is secondary evidence for years prior to 1979.
The same rule as in RS 01403.040A.5. also applies to other Form W-2's:
W-2AS for American Samoa;
W-2GU for Guam;
W-2NMI for the Commonwealth of Northern Mariana Islands; and
W-2VI for U.S. Virgin Islands.
These are not acceptable as evidence of wages.
NOTE: Prior to 1983, the Form W-2 contained a box identified as “corrected.”
Acceptable as evidence if:
used to correct wages reported for any year after
1977 in private and Federal government employment and after
1981 in State and local government employment;
there appears to be no question of authenticity of the data;
the form corrects information previously reported in items 13 and 14 on the W-2; and
blocks (a), (b), and (c) are completed.
Accept current year Form W-2's for work that has terminated, and assume that the Form W-2 will be reported properly to SSA.
Accept a Form W-2 from a third party payer of sick pay if the Social Security wages shown on it plus the Social Security wages paid by the individual's actual employer agree with the wages alleged. See RS 01402.105B.2. for coverage guidelines.
Individuals other than employees in covered wage relationships (e.g., self-employed commissioned salesperson, ministers, etc.) may have W-2/W-2c's issued to them for income tax purposes which will not reflect Social Security wages.
They are not acceptable as evidence of Social Security wages; however, they are acceptable for other purposes, e.g., for Annual Earnings Test (AET) purposes.
Develop to establish correct wages if:
there is disagreement between an individual's allegations and the total of wages plus sick pay; and
the PIA or deductions are affected.
Obtain statements from the employer and/or the third party sick payer to resolve disagreement. See RS 01403.013 and RS 01402.105B.2.