2020 Year End Changes#

Record Changes #

For tax year 2020 there are no record layout changes.

Other Changes #

• The Social Security Wage Base for tax year 2020 is $137,700.
• The employer and employee tax rate for Social Security will be withheld at 6.2 percent (up to $8,537.40).
• The 2019 Social Security and Medicare coverage threshold for Household wages is $2,200.
• Appendix H – 16.0 - Maximum Wage and Tax Table: This table has been modified to include tax year 2020 Social Security wage amount changes, including Household wages.
• Some editorial changes and corrections for clarification have also been made

Important Notes #

Common Conditions That Will Cause the Social Security Administration (SSA) to Reject an Electronic and Paper Wage File
SSA will reject electronic and paper wage files which contain a W-2 with any of the following conditions:

Reports with Social Security Wages and/or Tips and Medicare Wages and Tips - Relational Edits

• Medicare Wages and Tips less than the sum of Social Security Wages and Social Security Tips;
• Social Security Tax greater than zero and Social Security Wages and Social Security Tips equal to zero; and
• Medicare Tax greater than zero and Medicare Wages and Tips equal to zero.

Household Reporting

• If the tax year is 1994 and later and the Employer’s Employment Code is Household (H); and
• The sum of Social Security Wages and Social Security Tips is less than the yearly Social Security
• minimum for coverage; and
• Medicare Wages and Tips is less than the yearly minimum for coverage
  

For additional information on Household reporting, please refer to IRS Publication 926, Household Employer’s Tax Guide at www.irs.gov/pub/irs-pdf/p926.pdf

What Happens if SSA Rejects My Electronic or Paper Wage File?
If the above condition occurs in an electronic wage file, SSA will notify the submitter by E-Mail or postal mail to correct their wage file, retest in AccuWage Online and resubmit the wage file to SSA. To ensure prompt notification, please verify that your E-Mail address in the RA (Submitter) Record is correct and complete.

If the above conditions occur in a paper wage file, SSA will notify the employer by E-Mail or postal mail to correct the wage file and resubmit a wage file to SSA.

If you wish to view your errors online via Business Services Online (BSO), please visit www.socialsecurity.gov/employer/ and follow the instructions to log in or register to use the online suite of services.

FILING REMINDERS #

Electronic Filing

• For tax year 2020, BSO filers can upload their files beginning December 7, 2020. Terminating businesses can file before that date. Please refer to Section 2.3: Terminating a Business, for more information.
• For tax year 2020, Electronic Data Transfer (EDT) filers can transmit their files beginning December 7, 2020

Filing Deadlines #

The Internal Revenue Service (IRS) deadline for electronic filing is February 1, 2021 http://www.irs.gov/pub/irs-pdf/iw2w3.pdf

Note: You may owe a penalty for each Form W-2 that you file late. Refer to IRS Publication 2019 “General Instructions for Forms W-2 and W-3” for information concerning late filing penalties and terminating a business.

Other Filing Reminders #

• SSA’s BSO no longer accepts incorrectly formatted W-2 files. Please test your wage file through AccuWage Online (within BSO) before uploading your wage file. For additional information, please visit SSA’s AccuWage Online website www.socialsecurity.gov/employer/accuwage.
• SSA encourages the use of AccuWage Online to test your files. (See Section 6.)
• SSA is not able to process multiple data files in a .ZIP file. Upload and send only one wage file at a time. Please see Section 7.3 (Data Requirements) for additional information.
• If you are running anti-spam software, be sure to configure it so that SSA correspondence is not identified as spam.
• Make sure that your data file is in text format.
• Make sure each data file submitted is complete (RA (Submitter) Record through RF (Final) Record).
• All submitters must obtain a BSO User Identification (ID) through our registration process (see Section 5) and must enter that BSO User ID in the RA (Submitter) Record.
• Make sure the BSO User ID assigned to the employee who is attesting to the accuracy of the W-2 data is included in the RA (Submitter) Record. See Section 5 (User Identification (User ID)/Password Registration Information) for additional information.
• RA (Submitter) Record Information: The National Association of Computerized Tax Processors (NACTP) code is only needed for companies that sell their software to others. Companies that develop their own software should not request an NACTP code.
• RA (Submitter) Record Information: It is imperative that the submitter’s telephone number and E-Mail address be entered in the appropriate positions. Failure to include correct and complete submitter contact information may delay processing.
• If you file 250 or more Forms W-2 during a calendar year, you must file them electronically unless the IRS grants you a waiver. (You may be charged a penalty if you fail to file electronically when required.)
• If your organization files on behalf of multiple employers, include no more than 1 million RW (Employee) Records or 50,000 RE (Employer) Records per submission. Following these guidelines will help to ensure that your wage data is processed in a timely manner.
• RE (Employer) Record Information: Following the last RW/RO/RS Record for the employee, create an RT/RU/RV Record, then create either: The RE (Employer) Record for the next employer in the submission; or An RF (Final) Record if this is the last report in the submission.
• If no RS (State) Records are prepared, do not prepare an RV (State Total) Record.
• Do not create a file that contains any data after the RF (Final) Record. Your submission will not be processed if it contains data after the RF (Final) Record.
• Be sure to confirm that the tax year entered in the RE (Employer) Record is correct.
• Be sure the Employer Identification Number (EIN) is entered correctly in the RE (Employer) Record. This is especially important for Agents; make sure the Employer EIN is entered in the correct positions. Please see Section 2.1.2 for additional information on Agent reporting. Note: This is the EIN SSA will use to post the W-2 data.
• The Tax Jurisdiction Code (position 220 on the RE (Employer)) Record relates to the type of income tax that the earnings are subject to.
• Third-party sick pay recap reports must not be filed electronically. For further information, refer to IRS Publication 15-A (Employer's Supplemental Tax Guide). (See Section 6.)
• For general information about employer wage reporting, visit SSA’s employer website at http://www.socialsecurity.gov/employer