Q. One of our employees who has worked for us a little over 2 years just presented us with a new Social Security number (SSN) and said the old one we have been using is no longer her number. I have never heard of this before. Do we terminate the old record/file and rehire her with the new information, or do we just change the SSN and have her fill out a Form I-9?
A. You don’t need to rehire her, and you should retain her file with the wrong SSN. Although uncommon, there are certain legitimate situations in which the Social Security Administration (SSA) will change an individual’s SSN, including witness protection, domestic violence, the correction of an SSA error in which it assigned the same SSN to multiple individuals, and identity theft. Here’s an overview of the steps you need to take in this situation.
As you suggested, you will need to complete a new I-9. Write the original hire date in “The employee’s first day of employment” space in Section 2, and attach the new I-9 to the old I-9, along with a dated explanation of why the change was made. You will also want to re-examine and record original documents presented to complete Section 2, and if you participate in E-Verify, go ahead and E-Verify the new I-9 information.
Also, you will likely need to change your payroll records and any benefits and beneficiary information to reflect the updated information. As stated above, retain any and all records that reflect incorrect information and changes made to amend such information.
Reporting to IRS and SSA
A new SSN also requires corrections of previously reported information. The IRS requires you to record each employee’s name and SSN on Form W-2. When you discover that an employee’s SSN is incorrect, file a Form W-2c (Corrected Wage and Tax Statement) and a Form W-3c (Transmittal of Corrected Wage and Tax Statement), retain a copy of each form, and provide copies to the employee.
These forms ensure that any wages reported in error to someone else’s SSN are corrected. Complete these forms anytime you become aware of an incorrect SSN, whether for a past or current employee. Failure to promptly correct these mistakes once you become aware of them could lead to IRS penalties.
If you aren’t already doing so, you may want to begin using the free SSN Verification System (SSNVS), which quickly verifies whether a person’s name and SSN match the SSA’s records in the event an employee hasn’t provided a SSN card. Furthermore, if immigration status is an issue, you will likely want to contact counsel to evaluate how to proceed appropriately.