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Final regulations: Truncated TINs for wage, tax statements furnished to employees

Truncated TINs for wage, tax statements

The U.S. Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9861) reflecting regulatory changes to allow the use of truncated social security numbers—that is, "truncated taxpayer identification numbers" (TTINs)—on statements that employers furnish to their employees, specifically on Form W-2.

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According to the preamble of the final regulations [PDF 324 KB], regulations that were proposed in 2017 are adopted “without substantive changes to the content of the rules.”

However, the final regulations reflect changes to the applicability date provisions, and will apply to returns, statements, and other documents required to be filed or furnished after December 31, 2020 (except for Reg. section 31.6051-2, as amended, which addresses forms filed with the Social Security Administration and will apply as of July 3, 2019, the date of publication of the final regulations in the Federal Register).

Summary

Employers use Form W-2, Wage and Tax Statement, as provided to each employee, to show that employee’s total amount of wages and the amounts of tax deducted and withheld from those wages (and other information) for the calendar year.

Changes made under the Protecting Americans from Tax Hikes (PATH) Act of 2015, replaced a requirement that a social security number be included on a Form W-2 with a provision that “an identifying number for the employee” instead be required on Form W-2. Because a social security number is no longer required by statute, today’s final regulations permit employers to truncate the employees’ social security numbers as TTINs on copies of Forms W-2 provided to employees.

Also permitted is the use of TTINs on copies of Forms W-2 furnished to payees that report third-party sick pay as well as copies of Forms W-2 furnished to employees to report wages in the form of group-term life insurance.

Regulations proposed in September 2017, and finalized today, clarify that employers may not truncate an employee’s social security number to appear in the form of a TTIN on a copy of a Form W-2 that is filed with the Social Security Administration. 

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