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d. The amount of the back pay award excluding any

State statutes that protect rights to employment and

amounts specifically designated otherwise, for ex-

wages.

ample, damages for personal injury, interest, pen-

alties, and legal fees.

Payments based on laws that have a similar effect to

those listed above also may qualify as payments made

e. The period(s) the back pay award covers (begin-

under a statute.

ning and ending dates—month and year).

Back pay awards, under some of the statutes

f. The other wages paid subject to social security

listed above, may be compensation for personal

and/or Medicare taxes and reported in the same

injury and not pay for employment. Such awards

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

CAUTION

are not wages for social security coverage purposes.

Do not include the back pay award shown in that

If a court-approved or sanctioned settlement agreement

wage report. If you originally submitted the report

under an establishment number, show that num-

states that the agreement is not an admission of discrimi-

ber and the amount of money that is to remain

nation, liability, or act of wrongdoing, the statement does

under that establishment number.

not change the nature of a back pay award. The payments

made in such a settlement may still be back pay and wages

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

under the rules discussed here.

This includes any amount you want allocated (if

applicable) to the tax year of the award payment.

Nonstatutory Back Pay

If you do not give the SSA specific amounts to

allocate, the SSA does the allocation by dividing

the back pay award by the number of months or

A payment for back wages negotiated between an em-

years covered by the award.

ployer and employee without an award, determination, or

sanction by a court or government agency is back pay.

However, it is not made under a statute. Delayed wage

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

payments and retroactive pay increases resulting from

uary 1, 1981, for state and local government employers

union negotiation or payments under local ordinances or

covered by a Section 218 agreement), show the wage

regulations are back pay and are wages. However, they

amounts for each calendar quarter ending March 31, June

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

are not payments made under a statute.

show and identify the social security and/or Medicare

If you are uncertain whether the back pay award was

Qualified Government Employment (MQGE) wages

under a qualified statute, you may need to contact your

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

personnel department or legal counsel or the attorney who

eral employees beginning in 1983, and for certain state

filed the suit.

and local government employees beginning in 1986. For

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

Format for Report to the SSA

care wages separately. If you originally reported the indi-

vidual’s wages under an establishment or payroll record

Use the format shown in

Table 1

on page 4 to send the

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

SSA the information needed to properly credit back pay

award year for that number and furnish that number to the

under a statute.

SSA along with the EIN.

In a cover letter, include the following information:

Back Pay Under a Statute

1. The name and address of the employer,

Back pay awarded under a statute is a payment by an

2. The statute under which you paid the back pay,

employer pursuant to an award, determination, or agree-

3. The name and telephone number of the employer

ment approved or sanctioned by a court or government

agency responsible for enforcing a federal or state statute

contact, and

that protects an employee’s right to employment or wages.

4. The signature of the reporting official.

Examples of pertinent statutes include:

•

Under certain circumstances, back pay may be a

Age Discrimination in Employment Act,

special wage payment and excluded from wages

TIP

•

Americans with Disabilities Act,

counted under the social security earnings test. If

•

Equal Pay Act,

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

to the SSA in accordance with this section. Read

Special

•

Fair Labor Standards Act,

Wage Payments

on page 5 for additional reporting instruc-

•

National Labor Relations Act,

tions.

•

State minimum wage laws, and

Publication 957 (May 2010)

Page 3

Publication 957 - Reporting Back Pay And Special Wage Payments To The Social Security Administration Page 3

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