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Table of Contents

What is the SSA/IRS Employer Earnings Reconciliation Process?

How to Avoid Reconciliation Errors

What IRS Forms are Used in the SSA/IRS Employer Earning Reconciliation Process?
What SSA Questionnaires/Notices are Used in the SSA/IRS Employer Earnings Reconciliation Process?
What is the SSA/IRS Employer Earnings Reconciliation Process?

The SSA/IRS Earnings Reconciliation Process compares employees' wage data submitted to IRS against employees' wage data submitted to SSA. This data is submitted to both agencies by employers, their representatives, third parties and agents.

When more wages were reported to IRS than to SSA, then SSA is concerned that employees' earnings are not credited correctly to the agency's records. SSA examines some of these cases and makes an effort to resolve the difference without contacting the employer.

When an effort to resolve the discrepancy is unsuccessful or a resolution is not possible without employer assistance, SSA sends a notice and questionnaire to the employer, requesting the earnings data needed to resolve the case. If SSA does not receive a response after 120 days, the employer is sent a second notice. When no response is received after the second notice, IRS is responsible for contacting the employer and may impose penalties, if necessary.

If you are contacted by IRS or SSA about an Earnings Reconciliation issue go to: What Employers Need to Know about the SSA/IRS Employer Earnings Reconciliation Process.

 

How to Avoid Reconciliation Errors

Each January or February review the prior year's Form 941s, Schedule H or 943s against your payroll records. Compare the amounts to be reported to SSA on Form W-3 to the sum of the amounts you reported to IRS on Form 941s, 943s or Schedule H for the tax year. The following amounts on the IRS and SSA report should match:

ITEM W-3
Block
941
Line
942
Line
943
Line
Social Security Wages 3 6a 1 2
Social Security Tips 7 6b - -
Medicare Wages/Tips 5 7 3 4
Federal Income Tax Withheld 2 3 5 6
Adv. Earned Income Credit Payments 9 12 7 10

When filing reports electronically, on magnetic tape, diskette, or cartridge, the total of all employee wage ("RW") records should agree with the amount entered in the "RT" record.

When the amounts shown above do not match on the IRS and SSA reports, please consult your wage reporting instructions and double check your wage reports.

 
What IRS Forms are Used in the SSA/IRS Employer Earnings Reconciliation Process?

To obtain these forms go to www.ssa.gov/employer/pub.htm

What SSA Questionnaires/Notices are Used in the SSA/IRS Employer Earnings Reconciliation Process?

The following questionnaires/notices are used by SSA in the SSA/IRS Employer Earnings Reconciliation Process.

diamond symbol 1st Request Cover Letter - (Sent with SSA Has No Record of Employer Report or Discrepancy Between IRS and SSA Records Questionnaire) SSA-L-93-SM
diamond symbol 1st Request Questionnaire - SSA Has No Record of Employer Report (SSA-95-SM)
diamond symbol 1st Request Employer Questionnaire - Discrepancy Between IRS and SSA Records (SSA-97-SM)
diamond symbol 2nd Request Cover Letter (Sent with 2nd Request SSA Has No Record of Employer Report or Discrepancy Between IRS and SSA Records Questionnaire)(SSA-L-94-SM)
diamond symbol 2nd Request Questionnaire - SSA Has No Record of Employer Report (SSA-95-SM)
diamond symbol 2nd Request Questionnaire - Discrepancy Between IRS and SSA Records (SSA-97-SM)

 

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