Overview of Social Security Employer No-Match Letters Process

Employers are required to report wages annually for each employee on Forms W-2 (Wage and Tax Statements). SSA processes these wage reports as an agent of the Internal Revenue Service (IRS). SSA uses earnings information to determine eligibility for and the amount of Social Security benefits to which that worker may be entitled. Accurate earnings information is necessary to ensure that SSA credits the correct earnings to the correct individual's record. Because wage report information is tax return information, SSA follows Department of Treasury regulations governing disclosure of this information.

Employers report wages on Forms W-2 (Wage and Tax Statement) annually, and the reports are generally timely filed between January 1 and March 31. Self-employed individuals report information on self-employment income to IRS on Schedule SE. IRS then sends this self-employment information to SSA.

As noted above, SSA processes Forms W-2 as an agent of the IRS. IRS regulations permit SSA to use the information reported on the Forms W-2 only to determine eligibility for, and the amount of, Social Security benefits.

• SSA sends processed Form W-2 data to IRS on a daily basis beginning in January. This file contains both employer and employee data. It contains (for each employer report) an employer record containing the employer identification/address/type of report data, the W-2 records that were reported by that employer, and the total amount of wages reported for that employer's report.

• Each W-2 record also contains an indicator that tells the IRS whether the name/Social Security Number (SSN) matches SSA's records. SSA has no enforcement authority.

NOTE : This information is considered tax information protected under section 6103 of the Internal Revenue Code (IRC); therefore, SSA cannot share information about mismatched name/SSN combinations on Forms W-2 with other Federal agencies.

Each year SSA receives approximately 245 million wage reports on Forms W-2 from employers, covering approximately 153 million workers.

If the combination of name and SSN on a Form W-2 can not be matched to an SSA record, SSA is unable to attribute the earnings to a worker's record. There are a number of reasons why reported information may not agree with our records, such as typographical errors, unreported name changes, inaccurate or incomplete employer records or misuse of an SSN.

After SSA processes the wage reports submitted by the employers, we attempt to resolve items that cannot be matched by sending letters to employees, employers and self-employed individuals to inform them when a reported name or SSN does not match SSA's records. These letters are referred to as "no-match" letters and their purpose is to obtain corrected information to help SSA identify the individual to whom the earnings belong so that the earnings can be posted to the individual's earnings record.

No-match letters fall under two categories:

• Employer No Match Letters -- These letters may also be referred to as Employer Correction Request or Educational Correspondence (EDCOR) letters; and

• No Match Letters sent to workers whose earnings could not be credited to SSA's records are referred to as Decentralized Correspondence or DECOR letters.

SSA began sending no-match letters to workers in 1979 and to employers in 1994.

Worker's Notices (DECOR)

When SSA processes wage reports, it notifies every worker whose name and SSN could not be matched to SSA's records. This letter is sent to the address on the worker's Form W-2. If there is no address or an address is not found in the Postal Service database of valid addresses, this letter is sent to the employer. The new DHS regulation does not address these letters.

Employer Notices (EDCOR)

Approximately two weeks after the release of the worker letters, SSA sends employer no-match letters. Currently, these are sent to any employer who reported more than 10 no-matches that represented more than 0.5% of the W-2s submitted by that employer.

The Employer notice advises of the no-matches and asks for corrected information.

•  Employer notices list up to 500 SSNs (no names) that could not be matched (the employer can contact SSA for a full list if there are more than 500 errors). The employer is asked to prepare Forms W-2c (Corrected Wage and Tax Statement) for each of the SSNs listed in the Employer notice that the employer is able to correct.