When reporting wages, do employers need to see a Social Security card?

For wage reporting purposes, employers periodically need to verify the identities of their employees. To do so, someone in your organization must lay hands and eyes on a worker’s Social Security card, right?

Not necessarily. In the Fall 2022 SSA/IRS Reporter, a quarterly newsletter published by the U.S. Social Security Administration, the federal agency reminds employers that they don’t need to physically inspect an employee’s Social Security card to verify a name and Social Security number.

Instead, employers may use the Social Security Number Verification Service, which is available through the Social Security Administration’s Business Services Online website. The service allows users to immediately verify up to 10 names and Social Security numbers online. Users can also upload up to 250,000 names and Social Security numbers, and usually receive next day results.

If you encounter a mismatch between the Social Security number presented by an employee and the results provided by the Social Security Number Verification Service, don’t immediately take an adverse action such as suspending or terminating the individual. Also keep in mind that a mismatch isn’t indicative of a worker’s immigration status.

Here are some commonly recommended steps to handling a mismatch:

• Review your own employment records to verify the Social Security number.
• Ask the employee to confirm the Social Security number on file.
• Double-check the spelling of the employee’s name — particularly if it’s hyphenated or relatively easy to misspell.

If your records and/or the employee confirms the Social Security number as accurate, but you still get a mismatch, ask the employee to check into the matter with the local Social Security office. Then, resubmit with updated information when it’s available.

In some cases, an employee might refuse to provide a current valid Social Security number. Or you may be unable to reach someone who works remotely. If either circumstance arises, carefully document your efforts to obtain the correct info and retain this documentation for at least three years.

Finally, should you furnish a W-2 with an incorrect name and/or Social Security number, you’ll need to submit a Form W-2c, “Corrected Wage and Tax Statement,” to the IRS. Contact us for further information on wage reporting or other issues related to payroll tax compliance.

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