IRS Finalizes Rules to Allow Employers to Mask SSNs on Employees’ W-2s
The IRS has finalized regulations to allow employers to voluntarily truncate employee social security numbers (SSNs) on copies of Forms W-2, Wage and Tax Statement, furnished to employees after December 31, 2020 [84 F.R. 31717, 7-3-19].
The regulations allow employers to voluntarily mask SSNs so they appear in the form of IRS truncated taxpayer identification numbers (TTINs), which display only the last four digits of a taxpayer identification number (TIN) and use X’s or asterisks for the first five digits (i.e., XXX-XX-1234 or ***-**-1234).
Truncation Allowed on Employee W-2 Copies Only
The final regulations permit employers to truncate employees’ SSNs to appear in the form of a TTIN on copies of Forms W-2 that are furnished to employees under IRC §6051 (copies B, C, and 2). It is important to note that truncation of SSNs on employee copies of Form W-2 will not be required. The decision is entirely up to the employer.
Truncation Not Allowed on W-2s Sent to SSA
The final regulations clarify that employers may not truncate an employee’s SSN to appear in the form of a TTIN on copy A of a Form W-2 filed with the Social Security Administration (SSA). Both the IRS and SSA need the full SSN on Forms W-2 to identify individuals. The IRS receives the full SSN when SSA sends the employer’s W-2 file to IRS once it has finished processing the file.
For more about the final regulations, see the July issue of Payroll Currently.
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