The Importance of Verifying Your Social Security Earnings Statement - AMAC Foundation
Most folks realize that their Social Security benefit is based on a set of parameters, including your age, the start date for monthly payments, and their work history as maintained in the Social Security Administration’s records. While the first two are based on points in time, the third is the result of an annual process in which information from federal tax returns is transmitted to Social Security and added to the work history. When benefits are claimed, this work history becomes the starting point in a multi-part formula that calculates what will be a monthly benefit payment.
There are many moving parts in this process, especially regarding the annual updating of work history records. Mistakes and omissions can occur, and the result could be an incorrect—often lower—monthly benefit amount, which has a permanent impact if not corrected. Accordingly, verifying your Social Security earnings record is essential to ensure your future benefits are calculated correctly, and it is recommended that you verify your Social Security earnings statements annually.
If you find an error
There is a set period to fix or add missing earnings—three years, three months, and 15 days after the year in which the wages were paid, or self-employment was earned. Your Social Security benefit is based on your highest 35 years of earnings, so be sure you get credit for each year.
Ordinarily, you cannot correct your earnings after 3 years, 3 months, and 15 days from the end of the taxable year in which your wages were paid. However, you can correct your record after that length of time to:
- Confirm records with tax returns filed with the Internal Revenue Service.
- Correct errors due to omissions from processed employer reports or missing employer reports.
- Correct errors “on the face of the record,” that is, errors we can find by examining our records of processed reports.
- Include wages reported by an employer as paid to a person but not shown in our records. You can correct your record after the standard time limit in special circumstances.
- Ordinarily, you cannot correct your earnings after 3 years, 3 months, and 15 days from the end of the taxable year in which your wages were paid. However, you can correct your record after that length of time under certain circumstances.
To correct errors on your Social Security earnings record, complete a “Request for Correction of Earnings Record,” Form SSA-7008 https://www.ssa.gov/forms/ssa-7008.pdf. Follow the step-by-step process and gather your employment documents, such as W-2s or Federal tax returns. Submit the form along with your documentation to Social Security.
Of course, there are exceptions
There are exceptions to this time limit. For example, if an error was caused by fraud, a clerical mistake, or an employer failing to properly report earnings, the SSA may review and allow corrections beyond the usual deadline. In these cases, you must provide supporting documentation as part of the exception process.
In these exception cases, the SSA may allow corrections past the usual time limit to ensure your earnings record is accurate. You will need to provide supporting evidence showing that one of these exceptions applies.
The Importance of correcting errors in a timely manner
If you miss the correction deadline, fixing earnings errors is much harder, but possible if you provide strong proof. The SSA reviews late requests individually. If you can submit missing W-2s for the affected years, the SSA may accept them and update your record.
If they are older years, and you no longer have the W-2s for the years’ earnings that were omitted, you will have to complete Form SSA-7050 https://www.ssa.gov/forms/ssa-7050.pdf. There is no charge if they are needed for Social Security purposes. SSA can provide copies of your W-2s from 1978 to the present. Attach a letter to this form stating which years you are requesting W-2 forms for and the reason for your request. Example: To correct my earnings statement. This process can take up to 120 days.
You may want to consider requesting an IRS wage and income transcript if you need wage information quickly. These transcripts are often free and can be delivered within 5 to 10 days, though they only include federal tax information. You have three options for getting a transcript.
1)Complete Form 4506-T and mail it to the IRS. https://www.irs.gov/pub/irs-pdf/f4506t.pdf
2) Log in to your IRS Individual Online Account. Use your ID.me account https://id.me
3) Call (800) 908-9946
Help is Available
The easiest way to ensure your earnings are applied each year correctly is to create a My Social Security Account online. Create an account at https://www.ssa.gov/myaccount/
If you still need assistance, know that the AMAC Foundation’s Social Security Advisory Service is available to help you. Click here to learn more about this free service and how to access it.