W-2 SSN truncation is coming, just not yet

Proposed regulations to be published in the Sept. 20, 2017, issue of the Federal Register would make good on 2015 legislation that allows you to truncate employees’ Social Security numbers (SSNs) on their copies of W-2s. Truncated SSNs will be called TTINs.

It’s not as easy as it seems: To give states time to catch up and adjust their computer systems to accept TTINs—something the IRS didn’t do when it advanced the W-2 filing date to Jan. 31—the IRS proposes that these regs become final for W-2s filed in 2019.

Details of SSN truncation

As with SSN truncation on 1099-MISC and 1095 forms, W-2 SSN truncation won’t be mandatory. W-2 SSN truncation will follow SSN truncation on 1099s and 1095s: You will truncate by substituting characters for the first five digits, like this:

XXX-XX-1234

or

***-**-1234

You won’t be able to truncate on Copy A, which is filed with the Social Security Administration. And you won’t be able to truncate your Employer Identification Number, either.

Unaddressed in these proposed regs is whether you’ll be able to truncate on Form W-2c, although we think that was just an oversight. It probably will be allowed.

In addition to truncating on W-2s, the proposed regs would allow you to truncate SSNs on W-2s that are furnished to employees that report third-party sick pay, and on copies of W-2s that are furnished to former employees regarding the payment of wages in the form of group-term life insurance.

Care to comment

The IRS is accepting comments on these regulations through Dec. 18, 2017. You may submit comments electronically or on paper. Whichever method you choose, you must identify your comment by using REG-105004-16.

  • Electronic Comments: Go to www.regulations.gov. Enter either REG-105004-16 or RIN 1545-BN35 in the search box on the home page and follow the instructions for submitting comments.
  • Mail: Address written submissions to: CC:PA:LPD:PR (REG-105004-16), room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044. Be sure to identify your comments with REG-105004-16.

Remember: Your comments are part of the public record. Be nice.