News Release : SOCIAL SECURITY

Social Security Announces Capability to Receive Annual Wage Reports (Forms W-2) Over the Internet.

The Social Security Administration (SSA) announces the availability of a new service to receive annual wage reports electronically using the Internet. The service will be available beginning January 7, 2002 to the nation’s 6.5 million employers responsible for submitting Copy A of Forms W-2, Wage and Tax Statements to SSA; e.g., employers, accountants, third-party preparers, etc. Employers may now register to use this service at www.ssa.gov/employer. The service began last year on a trial basis, and more than 22,000 companies submitted 25 million Forms W-2.

Software companies that develop wage reporting software will be particularly interested in SSA’s new internet service as the number of companies moving toward electronic filing continues to grow each year. Already, 27 percent of the 253 million Forms W-2 reported to SSA each year are being received electronically, and a recent study projects an increase to

95 percent by 2010. Over the next several years, more businesses are likely to seek wage reporting products or services that include an electronic filing option.

Another reason for the expected increase in electronic filers is SSA’s new reporting format for all businesses (except paper filers) entitled "Magnetic Media Reporting and Electronic Filing (MMREF)" which is required for filers of Forms W-2 to SSA beginning with tax year 2001. SSA changed its reporting format to offer improved wage reporting services and utilize only one record format regardless of whether a submitter files electronically, on magnetic tape, or on diskette. Once a business converts to the MMREF, it can file electronically in literally seconds.

The advantages to filing electronically are hard to pass up regardless of how a company processes its payroll. For instance, electronic filers get an extra 30 days to file (until the last day in March versus the last day in February).

This means more time to identify and correct errors before submitting wage reports to SSA. Employers also receive an immediate acknowledgement of receipt and can check processing status online.

For more information about SSA’s suite of online services for businesses, including system requirements, view the handbook online at www.ssa.gov/employer and look under How to File.