Have you checked your retirement earnings record? Mistakes can lower the amount you’ve earned
Whether you’re near retirement or in your first few years of work experience, it’s crucial to know if your earnings record is correct.
The Social Security Administration (SSA) has recently updated its Frequently Asked Questions page on how to correct your earnings record, that is, your most recent earnings history.
But why is it so important that the earnings record is correct?
This earnings history records the correct amount, entered each year, of all your working life earnings, which determines the total amount of the check you will receive from your Social Security benefits.
The SSA says it’s a good idea to correct the data on the Request for Correction of Earnings Record form because if there are errors, for whatever reason, you won’t get the correct credit for the money paid in payroll taxes and future Social Security benefits will be lower than what you should receive.
If earnings are missing, the check amount will be less than the amount of the retirement, disability, or survivor benefits you or your family are entitled to.
Although they are not easy to see at a glance, errors in the earnings record are quite common, as evidenced by the existence of an earning suspense file, where earnings reports are stored with a name and a social security number (SSN) that don’t match.
In fact, the SSA reports annually on the billions in wages that are added each year to the earnings suspense file because wages couldn’t be matched to the earnings record.
Given these astronomical figures, many wonder why there are so many errors in Social Security earnings records. Most are not SSA’s fault but are due to clerical errors or failures in employers’ reports.
UPDATE SOCIAL SECURITY EARNINGS RECORD
In general, earnings cannot be corrected after three years, three months, and 15 days from the end of the taxable year for which wages were paid or selfemployment income derived.
But you can correct the earnings record after that time period under certain conditions:
• Confirm records with tax returns filed with the Internal Revenue Service (IRS).
• Correct errors in employer reports already processed or add reports skipped by employees.
• Correct errors that are “visible in the record,” that is, those that we can find when examining our records of the processed reports. Mechanical, administrative, obvious errors, among others.
• Include earnings reported by an employer as they were paid to an individual, and not as they appear in the record to add wages paid in a period without informing the worker or if the employer increases the amount originally reported for the period.
Also, to add or remove wages based on the wage report filed by the employer with the IRS.
• Correct an entry considered as fraud.
• Correct errors in crediting earnings to the wrong person or to the wrong period.
• Add self-employment income in a taxable year if an individual or the individual’s survivor establishes that he or she filed a selfemployment tax return for that year before the time limit expired. Also, when the income does not appear in the record, or the income is less than the one in the tax return.
• Add the income from self-employment for any taxable year up to the amount of earnings that were erroneously recorded as wages and then eliminated, only within three years, three months and 15 days after the taxable year in which the earnings incorrectly recorded as wages were removed.
The self-employment income must be from the same taxable year in which the wages were eliminated and are included on the individual’s Social Security record.
• Before the time period expires, the worker or the worker’s survivor must have applied for benefits, declared that earnings for one or more years were incorrect, and have requested a review of his or her earnings record for one or more years.
WHY ARE THERE ERRORS IN EARNED INCOME?
The SSA informs that there is cause for concern if the missing earnings on the earnings record history are from this taxable year or the previous one, as they are recorded in the system and will show up on a later return.
But earnings from previous years do not appear in the record history for one of the following reasons:
• The employer reported the worker’s earnings using the wrong name or a different Social Security number (SSN).
• The employer reported earnings incorrectly.
• The worker got married or divorced, changing his or her name, but never reported the change to the SSA.
• The employee has been working with an SSN that didn’t belong to the employee.
WHAT TO DO IF YOU LACK MONEY FOR RETIREMENT
The first thing you need to do if you notice a lack of earnings on your record history is to find proof of that earnings from work.
The more time passes, the more difficult it is to obtain older tax documents. Some employers may no longer exist or may no longer be able to provide prior payroll information.
Documents considered proof of work income are:
• A W-2 form, Wage and Tax Statement.
• A tax return.
• A salary stub or proof of payment.
• Your own salary records.
• Other documents that show that you have worked.
The SSA recommends that if you can’t find any written documents showing your earnings, try to remember and write down where you worked, the name of your employer, the dates you worked, how much you earned, and the social security number you used.
After writing this data from memory, contact the SSA to help you correct your earnings record. In this case, the SSA informs that this process could take some time, depending on the information provided and the verification of information with the employer.
HOW TO MAKE CHANGES TO THE EARNINGS RECORD
• Employers must make the correction using Form W-2c, either electronically or using a printed Form W-2c. Employees don’t need to make corrections if their employer has already filed the W-2c.
• Employees can make changes through a “my Social Security” account online and refer to the SSA Request for Correction of Earnings Record form.
• Also, by calling 1-800772-1213.
• You can get an itemized statement of your earnings that includes your employers or a certified copy of your annual earnings and tax record.
• Receiving the full amount of your annual earnings is free.
• If you need this certified annual earnings statement or an itemized earnings statement, certified or not, fill out Form 7050 Request for Earnings Information, a request for earnings information that is only available in English.
• If the more detailed or certified statement is for a purpose unrelated to the programs or SSA, you will have to pay an upfront fee.