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In addition, report to the SSA special wage payments

2. Special Wage Payments

made during the reporting year to retired employees and

employees who continue to work while receiving social

A special wage payment (SWP) is an amount paid by an

security benefits. Submit reports after the close of the tax

employer to an employee (or former employee) for serv-

year. To avoid delays in processing, submit reports in time

ices performed in a prior year. Employers should report to

to reach the SSA by April 1. Use one of the following

the SSA special wage payments made to employees and

reporting methods.

former employees who are recipients of social security

retirement benefits. Special wage payments made to a

Electronic reporting. Special wage payment files can be

retired employee receiving social security or to an em-

sent electronically by logging onto Business Services On-

ployee who continues to work while receiving social secur-

line (BSO) via the socialsecurity.gov website. BSO en-

ity benefits may reduce the benefits the individual receives

ables organizations and authorized individuals to conduct

if not reported to the SSA. Special wage payments may

business with and submit confidential information to the

include (but are not limited to):

Social Security Administration. You must register to use

this website. The web address is

•

Accumulated sick and vacation pay,

•

Back pay,

Use the specifications and record layout shown in

•

Table 2

on page 10. Only one file at a time may be

Bonuses,

submitted. If your file is large (>10MB), or you have a slow

•

Deferred compensation,

internet connection, the transmission will be faster if the file

•

Payments because of retirement,

is zipped. WinZip and PKZIP are examples of acceptable

compression packages. (A ZIP file contains a file that has

•

Sales commissions,

been compressed to reduce its file size.)

•

Severance pay, and

Electronic submissions not meeting the specifications in

•

Table 2 will be rejected.

Stock options.

Magnetic media. Special wage payments may be re-

ported on magnetic computer tape or 3490 and 3480 tape

Note. Payments made after retirement that are part of

cartridge models only. The SSA does not accept special

the normal payroll cycle should not be routinely reported as

wage payment reports on diskettes. Use the specifications

special wage payments.

and record layout shown in

Table 3

on page 11. Include a

Earnings Test. Benefits paid to a social security benefi-

transmittal using the format shown in

Table 4

on page 12

ciary under full retirement age may be reduced if the

for each tape or cartridge submission. Mail magnetic me-

beneficiary continues to work. The SSA uses the informa-

dia reports to the SSA at the address shown in Table 4.

tion in boxes 1, 3, and 5 of Form W-2 to determine the

Tapes or cartridges not meeting the specifications in

beneficiary’s current year earnings. Special wage pay-

Table 3 will be rejected. All data must be in capital letters.

ments, which are for services performed in a prior year, will

“Year” refers to the year the payment was reported as

increase the current year earnings on Form W-2, which

wages on Form W-2. Do not include prefixes or suffixes

also may result in a reduction in the beneficiary’s benefits.

(e.g., Dr., Ms., Jr., III, MD), numbers, special characters, or

If a benefit is reduced because of a special wage payment,

punctuation (including hyphens and apostrophes) in the

the beneficiary must get documentation from the employer

name fields.

before the SSA can restore the deducted portion. There-

fore, employer reports of special wage payments help

Paper listing. A paper listing can be used to report spe-

prevent incorrect benefit reductions.

cial wage payments to several employees. Use the format

shown in

Table 5

on page 13. Submit paper listings to the

Reporting Special Wage Payments

local SSA office nearest your place of business. Visit

www.

socialsecurity.gov/locator

to find a Social Security office

Employers must report special wage payments for income

near you.

tax purposes and social security and Medicare taxes in the

year received. Report income, social security, and/or

Form SSA-131. Use Form SSA-131 (see page 6) to re-

Medicare taxes for special wage payments on Form W-2.

port special wage payments made to an employee. Also

See below for reporting nonqualified deferred

use this form to report nonqualified deferred compensation

compensation plan deferrals and payments on

and section 457 plan deferrals and payments that could

Form W-2.

not be reported in box 11 of Form W-2.

CAUTION

Publication 957 (May 2010)

Page 5

Publication 957 - Reporting Back Pay And Special Wage Payments To The Social Security Administration Page 5

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