In March 2019, the Social Security Administration (SSA) announced that it started mailing Employer Correction Request Notices (EDCOR) to employers. These letters are sent when there is at least one name and Social Security number (SSN) that do not match the SSA’s records on the Form W-2. This can be something as simple and innocent as a typo or a more serious issue like identity fraud.
This is the first time in seven years that the SSA is sending these letters and they have changed with the times. According to SHRM, the letter no longer includes the names and SSNs of employees with the mismatched SSN. The employer must register online with the SSA’s Business Services Online to find out which employees are affected. The SSA gives step-by-step instructions on how to find and resolve errors on their website.
Before we look into a few frequently asked questions, it is important to know what a Social Security number is and how you can easily determine fakes.
Social Security 101
As we explored in another blog post, the SSA began assigning number back in 1936 to track worker’s earnings over their lifetimes to pay benefits. Back in 2011, they SSA started randomizing the way they issue numbers to help prevent fraud and protect the integrity of the number.
Before, the SSA consisted of a three-digit area number, two-digit group number and a four-digit serial number. Now, they eliminated geographical significance and the importance of highest group number.
Now, besides just using the trustworthy online system, the SSA point out key ways one could easily spot an invalid SSN:
- The first three digits (former area number) as "000," "666,” or in the 900 series.
- The second group of two digits (former group number) as "00."
- The third group of four digits (former serial number) as "0000."
Once you verify that your employees’ SSN is correct, it is important to check your records against your payroll companies to ensure they are a match. It is possible that you, the employer, may have it listed correctly but the payroll company may not.
So, you did your best checking SSNs on your employees’ W-2s, but you still get the letter. Now what?
Again, the purpose of the EDCOR is to advise employers that corrections are needed in order for the SSA to properly post the employee’s earnings to the correct record.
If you receive the letter, here are your next steps:
- Register for Business Services Online (BSO). View instructions on how to register here.
- Input activation codes in BSO. This is a one-time step you must complete to retrieve the names and SSN errors.
- Retrieve the names and SSN errors.
- Use the Social Security Number Verification Service (SSNVS) to determine validity of SSN(s).
- Work with employees to resolve the errors.
- Fix errors using Form W-2C.
If you still have questions about what to do, the SSA have also created a list of the most frequently asked questions they receive from people who get the EDCOR letter.
Four Frequently Asked Questions (FAQs)
We will explore 4 of the 7 FAQs below. To view the full list, click here.
1.How can one verify employee’s Social Security numbers?
The Social Security Administration offers two verification options to use to ensure employees name and SSNs match. The first allows you to verify up to 10 names and SSNs online and receive immediate results. This is ideal when verifying new hires.
To verify an employment base, files may be uploaded overnight of up to 250,000 names and SSNs and generally receive results the next government business day. These services are available to all employers and third-party submitters for only current/former employees for W-2 purposes.
2. How do I file W-2s, W-2Cs, and W-3s for my employees?
Luckily, this can be done either electronically or by paper. To file W-2s and W-2Cs online, you must register for Business Services Online. If you opt to file paper forms, be sure that they printed accurately and are laser printed forms or the red-dropout ink forms. For more information on paper filing, click here.
3. What should an employer do if an employee’s name and SSN do not match IRS records?
Double check the name and SSN on the employee’s Social Security card. If it doesn’t match, ask the employee to provide the exact information shown on their card. If the info does match their card, ask the employee to check with the Social Security office to resolve the issue and notify the employer of the outcome once resolved.
4. How can an employee change or correct their name on their Social Security card?
If their name is legally changed through marriage, divorce, court order, or another reason, they must tell Social Security so they can receive a corrected card. To see the requirements to change the name, click here.
To ensure that your business does not receive the EDCOR often, it is important to verify SSN often. This helps to eliminate discrepancies and enable compliance.
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