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f. The other wages paid subject to social security

Back pay awards, under some of the statutes lis-

and/or Medicare taxes and reported in the same

ted above, may be compensation for personal in-

year as the back pay award (if none, show zero)*.

jury and not pay for employment. Such awards

CAUTION

Do not include the back pay award shown in that

are not wages for social security coverage purposes.

wage report. If you originally submitted the report

If a court-approved or sanctioned settlement agree-

under an establishment number, show that num-

ment states that the agreement is not an admission of dis-

ber and the amount of money that is to remain un-

crimination, liability, or act of wrongdoing, the statement

der that establishment number.

does not change the nature of a back pay award. The pay-

g. The amount to allocate to each reporting period*.

ments made in such a settlement may still be back pay

This includes any amount you want allocated (if

and wages under the rules discussed here.

applicable) to the tax year of the award payment. If

you do not give the SSA specific amounts to allo-

Nonstatutory Back Pay

cate, the SSA does the allocation by dividing the

back pay award by the number of months or years

A payment for back wages negotiated between an em-

covered by the award.

ployer and employee without an award, determination, or

*Note. For periods before January 1, 1978 (before

agreement approved or sanctioned by a court or govern-

January 1, 1981, for state and local government employ-

ment agency, the payment is not made under a statute.

ers covered by a Section 218 agreement), show the wage

Delayed wage payments and retroactive pay increases re-

amounts for each calendar quarter ending March 31, June

sulting from union negotiation or payments under local or-

30, September 30, and December 31. For all tax years,

dinances or regulations are back pay and are wages.

show and identify the social security and/or Medicare

However, they are not payments made under a statute.

Qualified Government Employment (MQGE) wages

If you are uncertain whether the back pay award was

(where applicable) separately. MQGE is applicable to fed-

under a qualified statute, you may need to contact your

eral employees beginning in 1983, and for certain state

personnel department or legal counsel or the attorney

and local government employees beginning in 1986. For

who filed the suit.

tax years 1991 and later, list the social security and Medi-

care wages separately. If you originally reported the indi-

Format for Report to the SSA

vidual's wages under an establishment or payroll record

unit number, show the amount of wages to remain in the

award year for that number and furnish that number to the

Use the format shown in

Table

1, later, to send the SSA

SSA along with the EIN.

the information needed to properly credit back pay under

a statute.

Back Pay Under a Statute

In a cover letter, include:

Back pay awarded under a statute is a payment by an em-

1. Name and address of the employer,

ployer following an award, determination, or agreement

2. Statute under which you paid the back pay,

approved or sanctioned by a court or government agency

responsible for enforcing a federal or state statute that

3. Name and telephone number of the employer contact,

protects an employee's right to employment or wages.

and

Examples of pertinent statutes include:

4. Signature of the reporting official.

Age Discrimination in Employment Act,

Under certain circumstances, back pay may be a

special wage payment and excluded from wages

TIP

Americans with Disabilities Act,

counted under the social security earnings test. If

you pay back pay to an employee age 61 or older, report it

Equal Pay Act,

to the SSA in accordance with this section. Read

Special

Fair Labor Standards Act,

Wage

Payments, later, for additional reporting instruc-

tions.

National Labor Relations Act,

Questions

State minimum wage laws, and

State statutes that protect rights to employment and

If you have questions concerning back pay under a stat-

wages.

ute, call the SSA at 1-800-772-6270.

Payments based on laws that have a similar effect to

Exception. If you are a state or local government em-

those listed above also may qualify as payments made

ployer who was covered by an agreement under Section

under a statute.

218 of the Social Security Act before January 1, 1987, and

you paid a back pay award before January 1, 1987, which

you did not report to the SSA, contact your state Social

Security Administrator's office.

Publication 957 (January 2013)

Page 3

Publication 957 - Reporting Back Pay And Special Wage Payments To The Social Security Administration - Internal Revenue Service Page 4

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