What to do if your business receives a “no-match” letter

Businesses and employers nationwide have been receiving Employer Correction Request Notices (EDCOR, or “no-match” letters) from the Social Security Administration (SSA) over the past several months. These letters alert employers if there’s a discrepancy between the agency’s files and data reported on W-2 forms, which are given to employees and filed with the IRS.

Specifically, they point out that at least one employee’s name and Social Security number (SSN) don’t match the government’s records.

According to the SSA, the purpose of the letters is to let employers know that corrections are required in order for employees’ earnings to be posted to the correct IRS records. If a person’s earnings are missing, the worker may not qualify for all the Social Security benefits he or she is entitled to, or the benefit received may be incorrect.

Why discrepancies occur

There are multiple reasons why names and SSNs don’t match, including typographical errors when inputting numbers, identity theft, fraud, and name changes due to marriage or divorce. And, of course, employees could intentionally give the wrong information to employers, which can happen most often with undocumented workers.

Some lawmakers have expressed opposition to no-match letters. In a letter to the SSA commissioner, several members of the U.S. House of Representatives wrote that, under “the current immigration enforcement climate,” employers might “mistakenly believe that the no-match letter indicates that workers lack immigration status and will fire these workers — even those who can legally work in the United States.”

How to proceed

No-match letters of the past included a list of the data in question. Now, employers must register through the SSA’s Business Services Online (BSO) system in order to view the information that needs correction.

Once you have retrieved the list of name and SSN errors from the BSO, the SSA gives this advice:

  • Use the Social Security Number Verification Service (SSNVS) to verify employees’ names and SSNs.
  • Work with affected employees to correct the errors.
    • Check to see if your information matches the name and SSN on the employee’s Social Security card. If it doesn’t, ask the employee to provide you with the exact information as it is shown on the card.
    • If the information matches the employee’s card, ask your employee to check with the local Social Security office to resolve the issue.
    • Once resolved, the employee should inform you of any changes.
  • Fix errors by filing Form W-2c.

The SSA notes that the IRS handles penalties associated with W-2 forms that have incorrect information. If you have questions, contact us at KraftCPAs, or check these frequently asked questions from the SSA.

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