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Montana Tax Agency Clarifies SSN Truncation Guidance

BY: Lia Coniglio, Esq. | 03/12/21

The Montana Department of Revenue (DOR) has updated its guidance regarding truncating or masking employee social security numbers (SSNs) on forms filed with the DOR. The DOR will not accept truncated SSNs on Copy 1 of Forms W-2 and 1099, but will accept them on Copy 2. Previously, the DOR said it would not accept truncated SSNs on state copies (Copies 1 and 2).

According to the DOR, employers may provide employees with Forms W-2 or 1099 with truncated identifying numbers for increased security. Thus, truncated SSNs are permitted on Copy 2 of Form W-2, which is the copy employers furnish to employees. Employees may still use these forms when filing individual income tax returns.

Employers may not submit truncated identification numbers to the DOR, IRS, or SSA. Thus, employers may not truncate employee SSNs on Copy 1 of Form W-2, which is the copy the employer files with the state.

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Lia Coniglio, Esq., is Managing Editor of PayState Update and Manager of State Payroll Information Resources for the APA.