Payroll in Practice: 10.30.2023

Question: Can an employee’s Social Security earnings record be corrected if prior year Social Security wages were not reported or were under reported?

Answer: Generally, an earnings record can be corrected at any time up to three years, three months, and 15 days from the end of the taxable year in which the wages were paid or self-employment income was derived. For example, the period of correction for wages earned in 2020 is Jan.1, 2021 through April 15, 2024, and the record of earnings is final on April 16, 2024.

An earnings record shows an individual’s taxed Social Security and Medicare earnings for each year the individual had earnings reported to the Social Security Administration. Reported earnings include both wages and self-employment income.

It is important for workers to check their earnings records each year to make sure they are up to date. If an individual’s SSA records are incorrect, the individual might not receive all of their benefits. The yearly total earnings record may be accessed through a my Social Security account available from the SSA website. Detailed and certified earnings records may be requested using Form SSA 7050-F4, Request for Social Security Earnings Information.

Additional information is available in SSA Publication No. 05-10081, How to Correct Your Social Security Earnings Record.

The Social Security Handbook, in sections 1424 and 1425, lists the conditions under which an earnings record may be revised after the time limit. One of the conditions covers the situation of unreported or under-reported earnings.

Other examples of conditions include correction of an entry established through fraud, correction of a mechanical, clerical, or other obvious error, and correction of earnings credited to the wrong person or period.

An employer may correct earnings by filing Form W-2c. Employees are instructed to contact the nearest Social Security office or call the SSA’s toll free number 1-800-772-1213 for corrections to any periods, whether inside or outside the period of corrections, the employee is instructed to. It is best that the employee have supporting documentation available at the time of contact. This includes Forms W-2 or W-2c, pay stubs, employer records or statements.

The employee may request correction of earnings using Form SSA-7008, Request for Correction of Earnings Record. Supporting documentation and evidence should be attached as well as described on the Form. The SSA may contact the employer to request a statement of earnings or for confirmation of the changes.

If the employer initiated the change, the employer should retain any earlier prepared forms, as well as current documents that support the change. A narrative explaining the circumstances might help the employer answer any follow-up questions from the SSA. The employer should provide the employee copies of the relevant documentation that the employee can use to request the correction.

This column does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Patrick Haggerty is the owner of a tax practice in Chapel Hill, North Carolina, and an enrolled agent licensed to practice before the Internal Revenue Service. The author may be contacted at phaggerty@prodigy.net.

Do you have a question for Payroll in Practice? Send it to phaggerty@prodigy.net.