We hope you verify the Social Security Numbers that new hires provide to you. We hope you never have any mismatches returned. However, chances are you’ve seen it all. Even with today’s strict governance of identification and attempts at fraud prevention, it seems like it must be pretty easy to steal, buy, or otherwise illegally get your hands on a Social Security Number.
What is a payroll professional to do when an employee presents and confesses that the SSN given upon hire actually belongs to someone else? Once an employee made this confession to me and, curious, I asked, why confess now? Turned out the true owner of the SSN had been arrested and taken to jail, and the employee did not want to be associated in any way with criminal activity. Interesting…
So, back to the payroll question – what should you, as a payroll administrator, do when you discover that you have been filing FICA and Medicare taxes under a REAL Social Security Number, but it’s the WRONG Social Security Number? In other words, it’s valid but inaccurate.
To correct this error you should file two W-2Cs. The first W-2C will reduce the earnings to zero under the originally reported/incorrect SSN. The second W-2C will add the earnings to the correct name/SSN. Per the IRS, if you do not know the correct SSN to use, you should fill with all zeros.