SSA Seeks to Modernize, Simplify Filing Systems

The Social Security Administration is planning to open a new employer wage-reporting system in its Business Services Online portal in December, an agency official said March 17.

The new process for uploading Forms W-2, Wage and Tax Statement, is part of an effort to modernize all the SSA’s information technology systems, including wage-reporting systems, said Matthew Newton, a program manager with the SSA’s Office of Electronic Services and Technology.

“We’re trying to improve them for all levels of users, both from total novices who might be coming into our W-2 Online just to file one W-2 all the way up through major payroll providers who are filing millions of W-2s,” Newton said.

The new process was piloted in January for 24 employers and third-party reporters, Newton said at the American Payroll Association’s online Capital Summit.

Among the system’s new features is that it is to check some errors in real-time, which is designed to give feedback when a file has errors instantly instead of through a notice, Newton said. However, employers should still use the SSA’s AccuWage Online program to validate files before uploading, Newton said.

Additionally, while AccuWage requires a Business Services Online account to use, the SSA is exploring allowing businesses that do not file forms but may need to test files, such as software developers, to register and use AccuWage, Newton said.

Other goals of the SSA’s modernization program include creating more opportunities for users to resolve problems themselves without having to contact the agency, reducing or eliminating paper transactions, and allowing filers to provide feedback, Newton said.

Further Changes to Filing, Reporting

The Taxpayer First Act (Pub. L. 116-25) allowed, but did not require, the Internal Revenue Service to lower the electronic filing threshold to 100 forms in 2021 and to 10 forms in 2022, Newton said. The agency’s plan is anticipated to introduce the 100-form threshold in 2022 and the 10-form threshold in 2023, but no formal regulation has been introduced, he said.

The SSA expects 16,000 new e-filing registrations for tax year 2021 filing and 500,000 new registrations for tax year 2022 filing, which would increase the number of registrants by about 50%, but the agency recognizes that many of those employers may use payroll service providers instead of Business Services Online, Newton said.

About 94% of Forms W-2 are filed electronically and the percentage increases by about 1% each year, Newton said.

The SSA also is working with the IRS to introduce something similar to the IRS’s third-party consent, as SSA notices can now only be sent to employers and not, for example, to a payroll service provider that the employer may use, Newton said. The agencies are working to determine if the IRS has authority to share information on third-party agents with the SSA so that third parties do not have to register with both agencies, but work was slowed by the pandemic, he said.

Other developments discussed included that employer correction notices are to be mailed in April to electronic filers and in September to paper filers and any electronic filers missed in the first mailing, Newton said. However, as the previous mailing was in December 2020, those dates are estimates and may be delayed, he said.

The notices are sent to employers if a submitted Form W-2 has a name and Social Security number combination that does not match the SSA records.

Additionally, with regard to employee Social Security tax deferrals, amounts deferred in 2020 and withheld in 2021 must be reported on Form W-2c, Corrected Wage and Tax Statement, Newton said.

“We do not have a firm guess—we are certainly expecting at least a few million” Forms W-2c to be filed reporting deferrals, Newton said.