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.

SSA online services update

As regular readers know, many Social Security activities can be completed online. 

Social Security has available online services whether you do not expect to be receiving Social Security anytime soon, are completing an application to begin SSA benefits, or are already receiving monthly benefits. Online services are available for specific groups, including employers for W-2 wage reporting and verification of employee Social Security numbers.

From the start of Fiscal Year 2014 in October 2013 through April 2014, here are examples of public online use for Social Security activities:

Through my Social Security, with services for people both receiving or not yet receiving benefits:

14,898,898 views of personal Social Security Statements for estimates and to see earnings records

664,649 changes to a current beneficiary mailing address or of direct deposit bank information (electronic fund transfer)

Applications:

Just over 50 percent of retirement and disability applications are now received online.

760,095 Retirement applications

760,825 Disability applications

391,534 Medicare only applications, for people age 65 but not starting SSA retirement

Other online actions:

145,990 requests to replace a Medicare card

128,589 requests to replace Form 1099 for filing taxes (largely during February – March)

Online services are available for you through the Social Security website, www.socialsecurity.gov, anytime at your convenience without calling or visiting an SSA office but those options are available if preferred.

The national SSA toll-free number is 1-800-772-1213 (TTY 1-800-325-0778). Both numbers have representatives Monday – Friday, excluding holidays, between 7:00am – 7:00pm, local time. Automated services are available 24 hours a day at 1-800-772-1213. Appointments can be made for your local office by calling the national numbers.

Local office public hours are usually Monday, Tuesday, Thursday and Friday from 9:00am – 3:00pm with Wednesday hours of 9:00am – noon. Small offices can have different public hours. Learn local office addresses and public hours here.

Did you know? The original Social Security website was launched in May 1994, just over 20 years ago. That first site received about 17,000 visits in its first month.  Now, in 2014, the SSA website averages more than 17 million visits monthly, contains roughly 45,000 pages of information including retirement planning tools and provides online services. Visit it at www.socialsecurity.gov.

Is your W-2 correct?

Q: Everyone at work calls me Bill rather than my formal name of William. I just received my W-2 form and it used Bill. Will this be a problem since my Social Security card shows my name as William?

A: This will not be a problem but it is strongly recommended that both your Social Security number (SSN) card and W-2 form use your legal name. 

 

Although popular nicknames such as Bill for William will match to Social Security records, you should bring this to the attention of your employer immediately for correction. W-2 forms should also be reviewed to be sure your SSN is correctly shown, with your employer immediately told of any problems.

 

If reversed, with your name correct on your W-2 form but not your Social Security card, you should correct your SSN record very soon. Whether for marriage, divorce or other reason, make sure you change your name with Social Security as well as with your employer. A mismatch could delay your tax refund and cause problems with your Social Security benefits in the future.

  

Name changes and all other Social Security number actions are provided at no charge by Social Security. See http://www.socialsecurity.gov/ssnumber/ for instructions.

 

Employers: You can still register for Social Security Business Services Online (BSO) to transmit your 2013 W-2 information electronically. Registration instructions are in the BSO Handbooks, Tutorial & Videos section. For additional assistance, call the employer support phone number.

 

 

 

 

ID theft and your SSN

Posting about identity theft is not the most cheerful way of closing out the year but I have received questions on the topic, answered below, due to the recent theft of personal information from a major retailer.

The Federal Trade Commission (FTC) website (www.ftc.gov) has a lot of information related to identify theft including about the recent retailer data theft. See the FTC consumber information section at http://www.consumer.ftc.gov/.  

Q: Will the Social Security Administration know if someone is misusing my Social Security number (SSN)? 

A: Eventually, perhaps. You will likely know long before Social Security does. Although other agencies and organizations use SSN’s, within Social Security the primary use of the SSN is to associate wages or self-employment earnings with a person’s individual record so that Social Security retirement, survivors and disabilty amounts are properly computed.

Individual earnings information is received from employers, or the self-employed, once a year when W-2 data is reported or with self-employment tax returns. This is posted to individual records on a flow basis all during the year and, for paper W-2s, usually completed in the fall of the following year. For example, calendar year 2012 earnings were almost all posted by the fall of 2013. Posting is faster for W-2 information electronically transmitted to Social Security using the free Business Services Online tools. Posting of wages just updates a record. It does not automatically identify if those wages are actually yours or if someone has stolen your identity and using your Social Security number.

Social Security recommends that you review your personal earnings record at least annually. Do this by creating a my Social Security account at http://www.socialsecurity.gov/myaccount/ and then looking at the earnings on your Social Security Statement. If those earnings are wrong, provide the accurate information to Social Security and corrections can be made. 

The Statement also provides estimated benefit amounts for yourself and family members. See a sample at http://www.socialsecurity.gov/myaccount/SSA-7005-OL.pdf. Read the How We Verify and Protect Your Identy section when creating your my Social Security account.

Q: Can I get a new Social Security number (SSN) due to ID theft?

A: Not impossible, but definitely rare. This action is usually only for very severe and ongoing problems. Obtaining a new number will not solve all misuse problems and might actually create new ones since your work, credit, tax, banking information and more are referenced under the orginal number. A person receiving a new SSN cannot use the old number anymore.  

 

Just received: Tax Year 2013 Business Service Online updates

Last week I posted a reminder about the free Social Security Business Services Online. Once registered with BSO, you can verify employee Social Security numbers online and transmit W-2 information electronically.

For those already registered, todays post provides recently received Tax Year 2013 BSO reminders:

  • Changes to the Tax Year 2013 file format are here
  • To keep your existing Business Services Online account current, see these user reminders
  • On December 23, 2013, BSO will be available for accepting Tax Year 2013 and prior year files and Form W-2 online inputs.
  •  March 31, 2014, is the Internal Revenue Service (IRS) deadline for 2013 electronic W-2 filing.

To use Business Services Online, you or the appropriate people from your firm must register. Registration instructions are at http://www.ssa.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.  

Do you have questions about Business Services Online? See here.

Register now and use SSA Business Services Online

Are you an employer?

Do you operate a business having employees?

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? 

You still have time to register, verify employee Social Security numbers online and transmit your 2013 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. Since this is a hectic time of year, register now and be ready.

Business Services Online include two ways 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 http://www.ssa.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 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 used for new employees, the Social Security Number Verification Service (SSNVS) avoids having incorrect employee Social Security numbers, saving your business additional work especially if the person was only a temporary hire. With SSNVS you immediately verify the SSN of new employees. Did your business use SSNVS this year?

Have Business Services Online questions? Ask.

 

Timeline to post W-2 wages

Q: How long does it take for wages to appear on Social Security records?  My 2012 earnings were not yet on my record when I filed for benefits a few weeks ago. 

A: Employers report employee wages to Social Security only once during the year, when you receive your W-2. Posting from employer W-2 information to individual records goes on all year and usually completed by fall of the following year for records given to SSA by paper W-2. Nearly all 2012 wage records will be posted by the fall of 2013. W-2 data submitted electronically by employers using the free Social Security Business Services Online (BSO) posts faster.   

SSA representatives may request a prior year W-2 before earnings are posted so new beneficiaries receive credit for immediate past year wages. Whether or not this is done, the end result is the same because records of all beneficiaries are automatically reviewed when new earnings are posted. If the new earnings increase benefit amounts, any adjusted amount is retroactive. This applies to new beneficiairies and people receiving SSA benefits for years.

With different methods available, employers of all sizes can electronically report W-2 wage information by using the free SSA Business Services Online (BSO). Advance registration is required. Register now and transmit 2013 W-2 information electronically. Learn more at the Business & Government tab at www.socialsecurity.gov.

 

Are retirement amounts recalculated at FRA?

Q: Is there a review of your Social Security retirement amount once you reach full retirement age, even if you started benefits earlier?  For example, could earnings since you started Social Security increase the original amount? 

A: Starting reduced Social Security retirement benefits when younger than full retirement age (FRA) results in permanently reduced benefits. Your retirement amount will not increase just because you have gotten older, although you do receive cost-of-living increases.

However, two routine reviews can increase your original benefit amount. Both involve working while receiving Social Security retirement.  

First, when you reach full retirement age (FRA), there is a review of your existing benefits to be sure that all reductions for age applied. Benefits would increase for months that a person did not actually receive benefits because of work.  

For example, consider a person receiving Social Security retirement and working at the same time. If his or her earnings were low enough to permit ongoing payment of all monthly benefits, the review would not change the Social Security benefit because payment was received for all months. However, say earnings were high enough to prevent benefit payment for five months. Here the review at full retirement age would result in a benefit increase by the amount of those five months.  

A second review, also automatic, does not have to wait until full retirement age. Benefits are routinely reviewed to determine if earnings from new work activity can replace years previously used in computing a benefit amount. 

New and higher earnings on your record can replace one of the 35 years used to compute your original amount. When this happens, existing amounts are automatically recalculated and might increase benefits. Increases from this review can take place before full retirement age. This automatic review usually occurs in the fall, once employer W-2’s are all processed. For example, increases in benefits due to 2011 earnings were paid in November 2012, retroactive to January 2012. 

Other examples of these two reviews are in the booklet, How Work Affects Your Benefits, SSA publication 05-10069. Annual earnings test information for 2013 is also in this publication.

 

Employers – You still have time to use BSO for 2012

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

As long as you register in time to meet your W-2 reporting deadlines, there is not a firm BSO registration deadline. Allow time for the process as well as how hectic this time of year can be. Register now. 

Several posts during September and October, easily reachable through the Business Services Category on my Areavoices homepage, discussed available BSO services and registration.  

Services include two ways 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 http://www.ssa.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 one for the business.  

BSO is growing. Of W-2’s for 2011, approximately 185 million (85.5 percent) were online. About 31.8 million (14.5 percent) were paper. Electronic W-2 transmission reduces your business paperwork, and provides you with an additional W-2 processing month. Were your W-2s electronic or paper?

BSO provides two methods to electronically transmit W-2s. Your business can create and transmit a data file from 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.

Think your business is not large enough to use Business Services Online? Think again. For 2011, the average business using the W-2 Online template sent Social Security 5 W-2s.

When used for new employees, the Social Security Number Verification Service (SSNVS) avoids having incorrect employee Social Security numbers, saving your business additional workloads especially if the person was only a temporary hire. In 2011, the SSNVS was used 2.9 million times, with 105.8 million SSNs checked. Did your business make use of it?

 According to the BSO welcome page, beginning December 10, 2012, BSO will begin accepting W-2s and W-3s for Tax Year 2012. 

Has your business registered yet to use the free Social Security Business Services Online. You still can. Register now. Transmit your 2012 W-2s electronically. 

Have Business Services Online questions? Ask.

Employers – you can transmit W-2 data electronically

Recent posts about the free Social Security Business Services Online (BSO) covered BSO registration and the Social Security Number Verification Service (SSNVS). This BSO series ends today with submitting W-2 information online.  

Firms performing payroll services for multiple employers can register once to use BSO services for all clients. 

In addition to saving your business time and money in reduced handling and paperwork, with electronic W-2 transmission you have more time to provide W-2 information to Social Security. Unlike the paper W-2 deadline at the end of February, if submitting electronically, the deadline for submission to Social Security is March 31 (or on the following workday if this date falls on a Saturday, Sunday or holiday). Employee copies of the Form W-2 still must be given to employees by January 31 (or on the following workday if this date falls on a Saturday, Sunday or holiday).

There are two basic ways to file W-2’s online depending on your payroll system. 

With many commercial payroll software’s, you can create a data file for transmission to the Social Security Administration (SSA). Free SSA BSO software allows an accuracy check of your data before actually uploading the wage file to Social Security.

A second method is to use a provided W-2 template to create a transmission file of up to 50 Forms W-2 at a time. You can print copies suitable for distribution to employees, and additional W-2’s can be completed as needed. No special software is required. 

There is also BSO software for online W-2c’s, if needed. 

During January 2012, the third of three Social Security webinars about Business Services Online described online filing of W-2 and W-3’s. Although some website images have since changed, the basic process remains the same. Other tutorials are in the Handbook, Tutorial & Video section at http://www.ssa.gov/employer/. You might find these useful.

Personal assistance with SSA Business Services Online is available at http://www.ssa.gov/employer/. Note the customer support link at lower right of that page. This is specifically to help with business service online topics, not individual Social Security benefit questions.