State Agencies Bulletin No. 1768

Subject
Verification of Agency Return Address on Employee Form W-2 (Wage and Tax Statement) for Tax Year 2019
Date Issued
October 10, 2019

Purpose

The purpose of this bulletin is to reconcile employee Social Security Numbers and names in the NYS payroll system (PayServ) with the Social Security Administration (SSA) system through the continued partnership and collaborative efforts of agency Personnel/Payroll Officers and the Office of the State Comptroller (OSC).

Affected Employees

Employees who appear on the Control-D Report NPAY752 (Social Security Number Verification Report) will be affected.

Effective Date(s)

Immediately

Background

Pursuant to Internal Revenue Service Publication 15 (Circular E), employers are required to enter a correct name and Social Security Number on their employees’ Form W-2. This requirement applies to resident and non-resident alien employees.

To ensure this requirement is met prior to the generation of 2019 Form W-2 Wage and Tax Statements, OSC and agency Personnel/Payroll Officers must reconcile employee Social Security Numbers and names in PayServ with SSA.

Internal Revenue Code §6721 imposes a penalty of $270 per infraction for every information return that is filed with a missing/incorrect taxpayer identification number (TIN). OSC reserves the right to pass along any penalties imposed by the IRS to any State Agency that is responsible for the inaccuracy of an employee’s job record in the NYS Payroll System.

OSC Actions

OSC has created a file of employees with taxable wages for 2019 and compared that information with SSA records using the SSA’s Social Security Number Verification System (SSNVS). Control-D Report NPAY752 identifies discrepancies per SSA records. The NPAY752 report contains the following information:

  • Employee’s Social Security Number
  • Employee’s Name
  • Reason Why SSN Not Verified.  Reasons provided by SSA may include:
    • SSN not in file (never issued to anyone)
    • Name does not match: DOB and gender code not checked
    • Other SSN
    • Deceased
  • Contact the SSA office for more information.

Agency Actions

Agencies must review the NPAY752 Control-D report and take the following actions to ensure that any discrepancies identified between PayServ and the SSA’s system are resolved by December 13, 2019: For employees identified with a Reason Why SSN Not Verified of “SSN not in file (never issued to anyone)”:

  • Verify that the employee’s correct SSN has been entered in the National ID field in Personal Information as follows: Workforce Administration>Personal Information>Modify a Person. On the Biographical Details tab, the National ID field must be populated with the employee’s Social Security Number.

For employees identified with a Reason Why SSN Not Verified of “Name does not match: DOB and gender code not checked” or “Other SSN”:

  • Send a notification letter to employees who appear on the NPAY752 with this reason requesting that the employee provide proof of updated information to the agency Personnel or Payroll Office as soon as possible. (A sample letter which agencies may use is provided. Agency letterhead should be used when providing a copy of the letter to the employee.) Agency payroll officers should retain a copy of each letter and any response from the employee for four (4) calendar years in the event of an OSC review and/or IRS audit.
  • If an agency determines that the employee has recently changed his or her name and has not yet obtained a new card from the SSA, provide the employee with Form SS-5 for completion and submission to the SSA.
  • Verify that the Social Security card presented by the employee is the most recent card issued by the SSA. If the information reported in PayServ does not match the information on the Social Security card, the agency must enter the correct information into the employee’s Personal Information page as soon as possible. Agencies must not intentionally populate an employee’s record with an incorrect SSN.
  • If the employee believes that the SSN information reported in PayServ is correct, instruct the employee to contact the SSA to verify and correct their records. Agencies should document and retain this information for four (4) calendar years in the event of an OSC review and/or IRS audit.

For employees identified with a Reason Why SSN Not Verified of “Deceased”:

  • If an employee is listed on the NPAY752 with this reason, obtain a copy of the death certificate and enter the termination with an Action of “Termination” and a Reason of “DEA” as follows: Workforce Administration>Job information>Job Data (Agency). Note that when the termination reason is “Deceased” the employee’s status becomes “Deceased” effective the day before the Effective Date on the Work Location Page. The Date of Death field on the Biographical Details Tab in Workforce Administration>Personal Information>Modify a Person will automatically be updated (effective the day before the Effective Date on the Work Location Page).

Date of Death must be populated using the format of MM/DD/YYYY.

NOTE: When an agency is made aware that an employee who has previously separated from State service is deceased, the agency must report this information in PayServ to ensure any future payments due the employee are taxed and reported accurately.

Questions

Questions regarding this bulletin may be emailed to the Tax and Compliance mailbox.