Employers – register for Business Services Online now

The W-2 season is only a few months away.

Now is the time for employers to register to use Social Security Business Services Online (BSO).

A registered employer can verify the Social Security number (SSN) of newly hired and existing employees online or overnight, without seeing the paper SSN card.

Verifying now that you have the correct SSN prevents future reporting problems due to having a wrong SSN or name. If an employee’s name and SSN does not verify, have him or her contact Social Security to correct the problem. This is especially useful if your business has high employee turnover, such as the hospitality industry.

Another BSO service provides for electronic transmission of your W-2 information at the end of the year, with incentive to do so.

Firms providing payroll services register once to use these Business Services for all their clients.

There is no charge to use Social Security Business Services Online.

Business Service Online details are at www.socialsecurity.gov/thirdparty/business.html. Registration instructions and tutorials are in the Employer section as is customer support information that is dedicated to BSO related questions. Local Social Security office staff generally cannot answer BSO questions.

Note that the employee registering to use these Business Services on behalf of an employer is asked for some personal information as a security feature. Before allowing the registration to be completed, the employee work record is checked to verify employment with the employer. Newly hired employees can register for Business Services Online through customer support.



Correcting your work record

Q: I work part-time as an employee for a business and receive a W-2 for those wages plus I have separate self-employment earnings that I pay taxes on when filing my taxes each year. Only the W-2 wages appear on my most recent Social Security Statement. Since I have been paying self-employment taxes, shouldn’t they be on my Social Security number earnings history as well? How do I fix this?

A: Most people who pay into Social Security work for an employer. Their employer deducts Social Security taxes from their paycheck, matches that contribution, sends taxes to the Internal Revenue Service (IRS), and reports wages to Social Security. If registered for SSA Business Services, employers can verify employee Social Security numbers online and report W-2 wage information electronically.

Self-employed people must report their earnings and pay their taxes directly to IRS. If self-employed, you report your earnings for Social Security when you file your federal income tax return. If your net earnings are $400 or more in a year, you must report your earnings on Schedule SE, in addition to the other tax forms you must file.

All employment earnings for a year are usually posted to your personal work record near the end of October of the following year so your total 2014 employment earnings should be posted to your record approximately the end of October 2015. This applies whether or not a person receives monthly Social Security benefits. When already receiving benefits, new earnings are automatically reviewed to see if they will increase the amount.

If earlier years are not correctly posted, your local Social Security office can help correct your record. Evidence generally needed includes proof of the earnings, such as a W-2 and 1099. For self-employment, tax return information including tax form Schedule SE and proof of tax payment is also needed.

If you received your Social Security Statement by mail, know that you can get a copy of it anytime at your convenience by creating a personal, pin and password protected, my Social Security account. More about doing this is at http://www.socialsecurity.gov/myaccount/.

Are Social Security numbers issued consecutively?

Q: Are Social Security numbers issued consecutively?

A: No. Social Security numbers (SSN’s) have been issued randomly since June 2011 to help protect number integrity and to extend longevity of the nine-digit SSN nationwide.

A Social Security number has three parts. Before numbers were issued randomly in 2011, the first three digits, called the Area Number, reflected the State where the card was issued and later the zip code of the SSN application address. In general, SSN’s issued on the east coast had the lowest numbers and became higher moving along to the west coast.

Remember that the Social Security number process was designed in 1936, long before computers. SSN applications of that period were stored in files organized by region and alphabetically. Having the Area Number reflect a geographic area was an internal bookkeeping device to organize manual SSN records.

The middle two digits of the SSN are the Group Number. Although not used consecutively, before the change to random issuance, a Group number could be used to determine when the SSN was issued. This ability was a tool to help employers determine if a SSN was real. Today employers can verify a SSN immediately online through Social Security Business Services.

The final four digits are the Serial Number. Before the change to random issuance, they were issued consecutively within each Group series but had no specific meaning.

For SSN’s issued since the random process started in 2011, there is no geographical significance to the first three digits, the Area Number, because they are no longer associated with any specific area of the country. This means more SSN’s are available across the country since any Area Number can be issued anywhere.

The middle two digits, the Group Number, no longer can be used to determine when the Social Security number was issued. Change to both Area and Group Numbers protect individuals by making it harder to figure out a SSN.

More about the random issuance of Social Security numbers is here.

Here is a 1930’s photo of filing cabinets used to store Social Security records:

SSN card files-1930's

Are SSA amounts based on where you live?

Q: Do Social Security retirement amounts change based on what state you live in?

A: No. Your retirement amount is based on your personal work history over many years and your age when starting benefits, not on where you live. It will not change if you move to a different state.

Your best 35 years of work are key when your retirement benefit is computed. These best 35 years, often including years immediately before retirement but selected from your full work history, are weighted for inflation and used to compute your Social Security retirement amount as if you were full retirement age (FRA). If you do not have 35 years of work, zeros are added in to reach 35 years.

When your full retirement age amount is known, the specific amount for the month you are starting Social Security is determined by reducing or increasing the FRA amount, depending on if you are younger or older than FRA for the month when benefits start. Go to the SSA Retirement Planner section to estimate your own Social Security retirement amount.

Once receiving Social Security benefits, any cost-of-living increase is computed nationally based on changes in a consumer price index from one year to the next, not where you live.

In a related manner, benefits to you if disabled or survivors benefits to your family if you die are also based on your personal work history and not where you live.

Your Social Security work record is based on employer W-2 reports or your Schedule SE tax return if self-employed. Check it for accuracy by creating a personal my Social Security account at http://www.socialsecurity.gov/myaccount/ and viewing your SSA Statement.

Earnings for 2014 will not show on your record until approximately October 2015. It is very important for your future benefits that your work record be accurate. If it has an error, contact your local office to correct it.

Social Security Outperforms America’s Top Websites

Today’s post is mostly from the February 2015 edition of the Social Security newsletter. Read the full newsletter here.

Social Security has done it again! Social Security’s websites scored higher in customer satisfaction than those of some of the leading private sector companies in America, according to the ForeSee E-government Satisfaction Index. The Index also reported that of the 100 top-ranked federal sites, 5 of the top 6 belong to SSA.

The study analyzed 220,000 survey responses collected from users across 100 federal government websites. Social Security’s Extra Help with Medicare Prescription Drug Plan Costs, Retirement Estimator, Business Services Online, my Social Security, and online retirement application websites were all top-ranked. These websites outperformed those of private-sector customer service icons, including Amazon, L. L. Bean, and Apple.

Social Security’s websites outperform so many others because they are easy to navigate, and the information is easy to find. In addition, we employ acceptance testing, focus groups, and surveys to develop online applications and Web pages that will meet the expectations of users.

Check out all the great Social Security online services, including online applications, by visiting www.socialsecurity.gov/onlineservices.

All the above website locations are available through www.socialsecurity.gov. Specific sites named above follow:  

Extra Help with Medicare Prescription Drug Plan Costs

Retirement Estimator

Business Services Online (BSO)

my Social Security


Recently change your name?

Recently change your name?

Is your name the same on your W-2 form as on your Social Security number (SSN) card? 

If you need to update your name on your Social Security card, remember that doing so is free. Social Security does not charge a fee for Social Security number actions whether name change, replacement of a lost card or issuing an original number.  

See the Numbers & Cards section at www.socialsecurity.gov for needed evidence and a downloadable application. The direct link is www.socialsecurity.gov/ssnumber. An easy to use decision tree provides instructions.

To protect your personal information and avoid identity theft, you cannot electronically submit the Social Security number application. While a few areas of the country have centralized sites to process SSN card actions, in North Dakota completed applications, with evidence, can be brought or mailed to a local office. Locations for other areas are part of the decision tree instructions in the Numbers & Cards section. 

To speed your request, be sure to read instructions and have needed information available. Local offices routinely see people who do not have what they need. Unfortunately, they must be sent away wasting their time and ours.

It is important that any document submitted as evidence must be an original or a copy certified by the issuing agency. Photocopies you made yourself or that you had notarized cannot be used. State agency addresses if you need a certified copy of a document showing a birth, marriage or divorce within the United States are linked from the website. All documents are returned to you.

SSN cards are mailed from a central location when processing is complete. Allow approximately two weeks to receive your corrected or replacement card.

The name on your card should be the same as reported by your employer so that your wages are correctly shown on your work record. Have your employer correct your payroll record after your SSN card is updated. Employers can verify the SSN of employees and transmit W-2 data with the free SSA Business Services Online at www.socialsecurity.gov/thirdparty/business.html

Warning: Be careful when searching the Internet for Social Security information. Avoid private for-profit websites that charge for services provided free by Social Security, including name changes to your SSN card. Go to www.socialsecurity.gov or www.ssa.gov for accurate information and free services.  



Is payroll tax withheld if I work and receive Social Security?

Q: I stopped working full-time at the end of 2014 and started Social Security retirement. For the next few months I will work part-time and then retire completely.

Will Social Security payroll tax be held from my paycheck? If yes, will this increase my retirement amount? 

A: Yes, you continue to pay Social Security and Medicare payroll taxes. Your employer will continue doing so too. Everyone working in employment or self-employment covered by Social Security must pay payroll taxes regardless of age or eligibility to Social Security benefits. Current and historical Social Security and Medicare tax rates are shown here. 

If you are younger than full retirement age, remember annual earnings test limits.

Your new earnings would have to be better than the ones already used to compute your retirement amount to increase your monthly retirement amount. While possible, it is doubtful that a few months of part-time work will change your monthly retirement amount since the best 35 years of your working career are used.  

Benefit amounts of everyone receiving Social Security benefits are automatically reviewed when new earnings are posted to their work record even when low earnings are involved. Due to this, your retirement amount will be automatically reviewed once these 2015 earnings appear on your work record. 

Since you worked full-time all of 2014, it is much more likely that your 2014 earnings will increase your retirement amount when automatically reviewed. 

Employers report your earnings to the Social Security Administration as part of the W-2 process. Different employer deadlines apply based on how reporting is completed. Employers have a March 31 deadline if electronically reporting 2014 W-2 information using Social Security Business Services Online (BSO). If reporting by paper, the deadline is the last day of February.

However reported, national posting of all wage information is usually complete in approximately October, with automatic reviews of benefit amounts starting once wage posting is complete. If 2014 earnings increase retirement benefits, you will receive the increase in approximately December 2015, with payment retroactive to January 2015. 


Employers – remember SSA Business Services Online

Employers: You can still register for Social Security Business Services Online (BSO) and transmit your 2014 W-2 information electronically.  

Once registered, you can also immediately verify the Social Security number (SSN) of new and existing employees online or overnight, without seeing the paper SSN card, preventing future reporting problems due to having a wrong SSN or name. If an employee name and SSN do not correctly verify, have the employee contact Social Security. 

Firms providing payroll services register once to use BSO for all their clients.

There is no charge to use Social Security Business Services Online.

 Business Service Online details are at www.socialsecurity.gov/thirdparty/business.html. Registration instructions, tutorials and support contacts are in the Employer section. 

Do you work with payroll? Use SSA Business Services Online.

Are you an employer?

Do you work in a human services department?

Do you handle payroll services, whether for one business or many?  

Has your business registered to use the free Social Security Business Services Online (BSO) yet?   

Register now, then verify employee Social Security numbers online and be ready to transmit your 2014 W-2 information electronically. As long as you register in time to meet your W-2 reporting deadlines, there is not a firm BSO registration deadline. You have an extended deadline when using this electronic W-2 reporting. Register now and be ready.  

Business Services Online includes two methods to electronically file W-2s plus the Social Security number verification service (SSNVS), for online verification of employee Social Security numbers. 

To use Business Services Online, you or the appropriate people from your firm must register. Registration instructions are at www.socialsecurity.gov/employer/ in the Handbooks, Tutorial & Videos section. 

Registration is not difficult. As one of several security measures, those registering are asked for the business EIN number as well as their own name, Social Security number, and other information. A User ID and PIN is created for each person registering, not just one for the business.   

BSO provides two methods to electronically transmit W-2s. Your business can create and transmit a data file from your existing payroll software or use a Social Security provided W-2 template (W-2 Online). You can print copies suitable for distribution to employees with the SSA W-2 template. 

When you hire a new employee, use the Social Security number verification service (SSNVS) as part of your routine payroll process. Doing this avoids having incorrect employee Social Security numbers, saving your business additional work especially if the person is only a temporary hire. With SSNVS, you can immediately verify the SSN of new employees. If there is a verification problem, the new hire should contact Social Security to resolve it.  

SSNVS verifies that the employee name and provided SSN match Social Security records. It does not provide work authorization information. 

Have a question about Business Services Online? Ask.

When do I get credit for my 2013 earnings?

Q: I retired effective January 2014, so my current Social Security payment only reflects earnings through 2012. When will my retirement amount include 2013 wages? What do I need to do to make that happen?  

A: Earnings for 2013 are automatically reviewed for possible increase to your retirement benefits when posted to your work record, approximately by October 2014. You do not need to do anything for this to happen. The automatic review includes employment from wages and self-employment.  

Employers pay estimated taxes to IRS based on wages paid during the year but specific information of how much individual employees earned during a year are only sent to the Social Security Administration with annual W-2’s. Your employer reports earnings to Social Security at about the same time you receive your W-2 form. The employer report is a copy of the W-2.  

Employers of all sizes can register to report W-2 information electronically with Social Security Business Services Online. Incentives exist to encourage electronic W-2 reporting but many still are received by paper, requiring additional handling and processing time.  

W-2 processing for a year is usually completed during the fall of the following year, approximately October. Social Security receives more that 250 million wage reports annually. These are processed by employer report, not by individual employee. If you worked for more than one employer during the year, your total earnings will not be posted to your personal earnings record all at one time. Earnings from each employer will be added to your record when that employer’s report is processed.  

Your 2013 earnings will be automatically reviewed for possible increase to your retirement benefits when posted to your work record. While this review is automatic, it does not mean that benefit amounts will increase a significant amount or even at all. Retirement benefits are based on your best 35 years of employment, with the actual earnings amounts adjusted (indexed) to account for changes in average wages over the years. New earnings would have to replace earnings already used to increase your retirement amount. If 2013 earnings increase benefits, the increase is retroactive to the start of 2014.   

Since Social Security posts W-2 information all during the year, this automatic review might be sooner, especially if the employer reports W-2 data electronically with Social Security Business Services Online, but final reviews are completed when all W-2’s for the preceding year are processed in the fall. 

This review is done automatically every year that new earnings are posted to your work record. You do not need to take any action for this to happen.  See page 9 of “How Work Affects Your Benefits” at http://www.socialsecurity.gov/pubs/EN-05-10069.pdf.

Whether or not receiving monthly benefits, you can check your personal Social Security earnings record by creating your my Social Securityaccount and looking at your SSA Statement. Earnings on the Statement are updated as described above, with earnings for a year posted during the fall of the next.