Sensitive Areas - Avoiding W-2 Errors

• Make sure the EINs on the W-3, W-2, and/or e-file match the EIN on IRS Form 941/943/944 filed during the year.
• Watch out for
• transposed digits
• SSN entered instead of EIN
• EIN less than 9 digits

Employee Name and SSN (Social Security Number)

• See "Critical Links" under "Resources" at www.socialsecurity.gov/employer
• Watch out for
• transposed digits in SSN
• EIN entered instead of SSN
• SSN less than 9 digits
• names misspelled or recorded in payroll records incorrectly
• nicknames instead of proper first name
• titles (such as Dr., M.D., PhD)

Money Punctuation

• Never use a $ sign or commas.
• Always show dollars and cents.
• On paper copies, use a decimal point to separate cents.
• For e-filed reports, NEVER USE DECIMAL POINTS.

Reconciliation of Money Amounts with IRS Reports

• See "Employer Reconciliation Process" at www.socialsecurity.gov/employer

Social Security Wages

• A new wage base ("cap") is announced each October for the following tax year. See IRS W-2 instructions or www.socialsecurity.gov/employer if you need to confirm the wage base.
• Watch out for
• Social Security wages plus Social Security tips total (boxes 3 and 7 on a paper W-2 or the same fields in e-file) that is higher than the Social Security wage base for the year on the W-2
• Social Security wages equal to an earlier year's maximum (indicating failure to update the Social Security wage base).

Social Security Tax Withheld

• Show Social Security tax withheld (not including the employer's matching share) on the W-2 (box 4 on a paper W-2 or the same field in e-file).
• Watch out for
• Social Security tax withheld higher or lower than 6.2% of Social Security wages plus Social Security tips

Medicare Wages and Tips

• There is no maximum or wage base for Medicare wages beginning with 1994 wages. Medicare wages and tips (box 5 on a paper W-2 or the same field in e-file) must equal or exceed the total of Social Security wages and Social Security tips.
• Watch out for
• Medicare wages and tips amount less than the Social Security wages plus tips total

W-2 and W-3 (Paper Filers)

By law, paper Forms W-2 and W-3 must be machine readable!  Do not copy blank W-2 or W-3 forms from a publication or print forms from a web site to fill in and mail to SSA.  Also do not fill in forms by hand.

• Make sure printed data (fill-ins you print on forms) are dark and legible. If light, replace laser toner cartridge or ribbon.
• If you purchase paper forms from a vendor, make sure they meet current IRS Publication No. 1141 requirements (paper weight, size, ink, etc.).
• If your payroll/tax software prints paper Form W-3 and Copy A of Forms W-2 on plan paper, contact the vendor to make sure the forms were approved by Social Security for filing.