We realize it may be a stretch for ordinary people to want to keep up with the comings and goings of the Social Security Administration, but sometimes circumstances permit where someone does want to follow the latest news regarding the agency due to a possible retirement or disability interest. This blog is an ongoing piecemeal of recent stories that have involved Social Security. Some are tidbits and some are important things that should be known in the world of retirement or disability and others are just interesting stories and nothing more.
The No-Match Letter
Social Security has gotten back to the practice of sending out “no-match” letters to employers when an employee’s wage and tax statement (W-2) does not match Social Security’s records. The letters, which the agency began sending out earlier this year after a hiatus, informs employers that corrections are needed for Social Security to post the correct earnings to Social Security earnings. The most common reasons wage and tax statements may differ from a Social Security records are transcribing errors to names or Social Security numbers or when a name change occurs, according to a recent story from Forbes.
These “no-match” letters are something employers need to deal with because if they go ignored there can be consequences. The first consequence is that the employee, which is subject of a “no-match” letter could have inaccurate earnings reported on their Social Security record that could limit future benefits. Another consequence is that if an employer ignores a “no-match” letter they could end up being fined by the IRS. Finally there are illegal immigration concerns as well. The Immigration and Customs Enforcement (ICE) does periodically ask employers whether or not if they have received “no-match” letters.
Social Security Numbers Exposed In Data Breach
It doesn’t take a data breach from Social Security to expose your Social Security number, which can happen from business transactions or even when you renew your driver’s license. It was recently reported that thousands of California residents had their Social Security numbers exposed in a data breach that involved information from the California Department of Motor Vehicles (DMV) being shared with unauthorized access to several other federal agencies. The breach was not a hack, according to the DMV, but an error. The information of more than 3,000 drivers was shared improperly according to the story.
Some States Tax Benefits And Some Don’t
It is up to individual states whether or not they will tax Social Security benefits, and some states do and some states don’t. Determining which states tax Social Security benefits may help some seniors decide where they want to retire. The federal government taxes up to 85 percent of Social Security benefits, but benefits are exempt from taxation in 28 states and seven others don’t tax Social Security benefits at all. There are 13 states where a portion of Social Security benefits are taxable, and another 10 states, including Minnesota, where the taxation of benefits depends on overall income and tax filing
