Purpose

To reconcile social security numbers and names in the State Payroll System and the Social Security Administration (SSA) files. This bulletin provides direction for the next step in the continuing collaborative effort between OSC and Personnel/Payroll Offices.

Affected Employees

Employees who appear on the SSA Verification Report (Reveal Report NPAY752).

Effective Date

Immediately

Background

OSC has issued Payroll Bulletin No. 357 alerting agencies of the recent IRS announcement to start imposing fines and penalties on employers/State agencies whose social security information does not match the SSA records.

Maintaining up-to-date social security information in the State Payroll System ensures accurate posting of social security earnings, and ensures that employees avoid potential problems with collecting future social security benefits to which they are entitled.

OSC issued Payroll Bulletin No. 364 to provide additional clarification and "Frequently Asked Questions" to respond to inquiries that resulted from Payroll Bulletin No. 357.

OSC Actions

OSC issued the 2002 W-2 data file for comparison with SSA database records using the SSA's Enumeration Verification System (EVS). Any changes to social security information entered in the payroll system after January 17, 2003 will not be reflected on this report. As a result, the report may contain social security information discrepancies that were updated after January 17, 2003.

A new Reveal Report NPAY752 is now available.

Agency Actions

1. Review the Reveal Report NPAY752.
2. Agencies must send a notification letter to the affected employees. Use the letter attached to Payroll Bulletin 357 as a guide. The Payroll Office must retain a copy of each letter (and any responses from the employee) for four (4) calendar years.
3. If the social security information reported is inaccurate, enter the correct information into the personal data panel as soon as possible.
4. If social security information is entered on the State Payroll System after January 17, 2003, a corrected 2002 W-2 must be prepared and submitted to OSC.
5. To ensure that we meet the IRS deadline for correcting discrepancies in social security information and avoid fines and penalties, agencies must update social security information and submit W-2Cs to OSC for processing by June 1, 2003.
6. If the employee believes that the social security information reported on the State Payroll System is correct, instruct the employee to contact the SSA to verify and correct their records. Agencies should document this and retain this information for four (4) calendar years.
7. Copies of letters and other documentation must be available in the event of an OSC review and/or IRS audit.

NOTE:

The Internal Revenue Service has issued the following guideline regarding employees who fail to resolve discrepancies subsequent to notification by the employer:

• If an employee fails to resolve the discrepancy, the employer should withhold at the highest rate (i.e., marital status of single, with zero withholding allowances), until the discrepancy is resolved and the employee provides a new W-4.

Questions

Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.