News & Resources


IRS Discontinues W-2 Verification Code Program

BY: Curtis E. Tatum, Esq. | 10/04/19

The IRS announced it will discontinue the Form W-2 Verification Code pilot program for the 2019 tax year. The IRS said that because federal law now requires employers to submit Forms W-2 by January 31 each year, it can combat fraud and identity theft without the need for the verification code.

In 2016, the IRS worked with four payroll service providers (PSPs) – ADP, Ceridian, Intuit, and Paychex – that placed a 16-character verification code on Forms W-2 issued to the employees of certain clients. Between 2016 and 2018, additional PSPs participated in the program and the number of W-2s on which the verification code appeared increased from approximately two million to more than 60 million.

The Form W-2 verification code pilot program “marked an unprecedented cooperative effort between payroll service providers, employers, tax software providers, tax professionals, the Social Security Administration, and the IRS to identify new avenues to ensure the accuracy of information reported on tax returns and to identify fraudulent tax returns,” the IRS said.

In its announcement that it would discontinue the program, the IRS “expresses its appreciation to the many stakeholders, especially the payroll service providers and industry software developers, who joined in the verification code project.”

To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!

Curtis E. Tatum, Esq., is Director of Federal Payroll Compliance for the APA.