Social Security Administration W-2 Correction Letters Could Serve as Warnings

Wendy Walker
April 26, 2019

Some organizations might have been surprised recently to receive a correction letter from the Social Security Administration (SSA) requesting corrected information on Form W-2 due to a name-social security number (SSN) mismatch. Although there is no penalty associated with the SSA letter, it could serve as a warning to help organizations stave off penalty notices from the IRS.

After a long hiatus, the SSA in March resumed sending Employer Correction Requests, or EDCOR, letters to organizations with name-SSN mismatches. The SSN is the same for individuals as a tax identification number (TIN). The letters are simple requests for organizations to file corrections via Form W-2C for Forms W-2 that have been identified as being filed with missing or incorrect name-SSN information.

A warning of IRS penalty notices (P notices)

EDCOR letters themselves do not carry the threat of financial penalties, but organizations should take them seriously nonetheless as they can potentially stave off the threat of P notices from the IRS. The SSA sent EDCOR letters in March. Organizations that received them won’t see P notices from the IRS for the same name-SSN errors until next year, in late summer 2020. Those organizations that heed the early warning in March from the SSN and provide correct information to both the SSA and IRS via Form W-2C can potentially avoid having the IRS send subsequent P notices for the same errors.

Resumption of EDCOR letters after pause

Correction letters from the SSA actually date back to tax year 1993. The administration ceased sending letters after tax year 2005 and formally discontinued the practice in 2011. However, the SSA resumed sending letters in 2018 to employers that submitted one or more names or SSNs that did not match SSA records. For calendar year 2019, the SSA has fully resumed sending EDCOR letters.  

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Author

Wendy Walker

Wendy Walker is the principal of Tax Information Reporting solutions at Sovos. She has more than 15 years of tax operations management and tax compliance experience with emphasis in large financial institutions, having held positions with CTI Technologies (a division of IHS Markit), Zions Bancorporation and JP Morgan Chase. Wendy has served as a member of several prominent industry advisory boards. She graduated with a BS in Process Engineering from Franklin University and earned her MBA from Ohio Dominican University, in Columbus, Ohio.
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