What’s a “no-match” letter, you ask? It’s a letter sent by the Social Security Administration (SSA) to employers who are identified as having at least one name and Social Security Number (SSN) combination reported on Form W2 that does not match SSA records. This notice, commonly referred to as no-match letter, informs the employer that corrections are needed along with sample notices that are being sent, step by step instructions on finding/resolving errors and frequently asked questions.
No-match letters are not unheard of; employers may recall receiving these letters from the SSA as far back as 1993, but this practice ended in 2012 only to be reinstated in 2019.
So … what’s the deal and what should an employer expect?
- Notice letters will be sent out during two different periods in 2019. The first batch was mailed out at the tail end of March 2019 to all employers who electronically filed by the January 31, 2019 due date. The second batch will go out in the fall of 2019 to employers who filed paper W2s or filed electronically after January 31, 2019.
- Once the notice is received, the employer is required to review and resolve any discrepancies. The employer may have to work with the employee to resolve the error.
- Any errors may be corrected on Form W2-C, Corrected Wage and Tax Statement.
- Employees will not receive a no-match letter.
How does a mis-match occur?
A mis-match of an employee’s record to SSA records may be due to a variety of reasons, such as:
- Simple reporting errors by the employer or employee.
- The employee had a name change and did not update this information with the SSA or with the employer.
- The employee simplified his/her name or used a nickname when completing the employment forms.
- Input error by the SSA.
- Identity theft.
Adverse action against employees … big fat no-no!!
The no-match letter clearly states that the SSA is not implying that the employer or employee intentionally gave the government wrong information. It also states that this letter is not addressing the employee’s work authorization or immigration status and that the employer should not use the letter to take any adverse action against an employee. Firing, laying off, suspending or discriminating against an employee because the employee’s SSN does not match the SSA records is considered adverse actions and could violate state and/or federal law.
What can an employer do to reduce the chance of getting a no-match letter?
Employers can be pro-active in this matter to reduce their chances of getting a letter while simultaneously reducing operating costs in a variety of ways:
- Recommend to their employees to use their names exactly as they appear on their Social Security cards when completing employment forms.
- Keep a copy of the employee’s SSN card (legally okay) and compare to the data provided on the employment forms.
- Review Forms W2 for any typos before filing … this sounds so simple but can save an employer a future headache!
- The SSA recommends employers use the Social Security Number Verification Service (SSNVS), a free online service tool available to employers to allow them to verify the name and SSNs of employees using against SSA records. Registration for SSNVS is required through the Business Services Online Welcome Page.
As always, contact your Henry+Horne tax advisor if you have questions.
Sahar T. Clancy, CPA