SSA signals changes to sick pay reporting

The Social Security Administration recently announced that it will discontinue processing paper third-party sick pay recaps beginning in calendar year 2015. Third-party sick pay recap reports will also not be accepted via electronic submission. More detailed information about this change will be included in the revision of Publication 15-A which is expected to post to IRS.gov in December. Presenting at the

IRS’ Nationwide Tax Forum in late August, the SSA also announced that it will begin returning electronic and paper wage reports to employers that contain a W-2 with any of the following conditions, effective January 2015:

• Medicare wages and tips less than the sum of social security wages and social security tips on the W-2.
• Social security tax is greater than zero and social security wages and social security tips equal to zero.
• Medicare tax is greater than zero and Medicare wages and tips are equal to zero.

The American Payroll Association attended the IRS’ most recent Nationwide Tax Forum, held in Maryland from August 19-21, to learn more about recent IRS developments and to represent the needs of the payroll profession. Leaders and experts from the IRS and SSA presided over three days of workshops and addressed a variety of issues that will impact payroll professionals in 2015.

The IRS also addressed changes regarding third-party sick pay recap reporting, but made it clear that preventing identity theft and refund fraud is a top priority for the IRS at the moment. In addition to individual ID theft, the IRS has seen a marked increase in business ID theft. This happens when a stolen business entity ID is used to file fraudulent individual tax returns and obtain the tax refunds of their victims. As a result, the IRS has now begun marking business accounts that have been victims of ID theft to keep an eye on those accounts.

The IRS recommends that individuals and businesses who are victims of ID theft follow these four steps:

• Report the theft to the police and get a copy of the report.
• Contact national credit bureaus to inform them of the theft.
• Contact credit card companies and financial institutions to inform them of the theft.
• Respond to IRS notices promptly so the agency can work fast to resolve your case.

Check out the September issue of Inside Washington for more information on these and other changes discussed during the IRS’ Nationwide Tax Forum. (Source: Brian O’Laughlin, Esq., Senior Manager of Government Relations and Multinational Certification, American Payroll Association; APA_Benefits@americanpayroll.org; October 17, 2014.)

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