Employers may voluntarily shorten Social Security numbers on employee copies of W-2 forms, the IRS said in final regulations.
The rules (T.D. 9861), released July 2, are aimed at preventing identity theft. If an employer chooses to shorten its employees’ nine-digit Social Security numbers, the numbers will appear on copies of Form W-2, Wage and Tax Statement, as truncated taxpayer identification numbers (TTINs).
- The IRS noted that some commenters disagreed with the change because permitting shortened SSNs could have unintended consequences. They said, for example, that it could make it more difficult for tax return preparers to verify that a taxpayer has provided the correct number, or it could confuse employees who receive multiple Forms W-2—some with truncated SSNs and others with complete SSNs.
- But “the benefit of allowing employers to protect their employees from identity theft by truncating employees’ SSNs to appear in the form of a TTIN outweighs the risk that the unintended consequences identified by the commenters will occur,” the agency said in the regulations, which pertain to tax code Sections 6051 and 6052.
- The final rules amend rules under Section 6109 to clarify the application of the new truncation guidance and add an illustrative example.
- Employers can begin applying the new rules to 2020 W-2s, filed in 2021.
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(Updates with applicability date. )