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Special analysis: No-match letters are back (don’t panic)

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in Small Business Tax Deduction Strategies

It’s been popping up on the Internet—the Social Security Administration (SSA) has resumed sending employers letters regarding mismatches of em­ployees’ names and Social Security numbers (SSNs). Since employee name/SSN matches are critical to payroll administration, you’re right to be concerned. But there seems to be some confusion over these letters.

Background

The SSA used to send two no-match letters.

Employer no-match letters were issued to em­ployers that submitted W-2 reports containing more than 10 W-2s that the SSA couldn’t process and on which name/SSN mismatches represented more than 0.5% of the total forms submitted. Those employers also risked tax penalties for filing incorrect W-2 forms.

Employer no-match letters were an integral part of immigration regulations that were issued in the late 2000s. However, as soon as final regs were released, they were challenged in court. As a result, the SSA stopped issuing th...(register to read more)

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