SSA sets sights on W-2 Web app
SSA sets sights on W-2 Web app
Agency, users give online pilot thumbs-up
By Patricia Daukantas
A recent pilot of employer wage reporting via the Internet has prompted the Social Security Administration to consider Web transactions as a permanent filing option.
A survey of the pilot's participants'101 employers of varying sizes'found that 91 percent considered the Internet process easier than SSA's current submission processes, and 100 percent would like to use it again.
For its pilot, SSA gave participants the choice of using the Web and digital signatures or encrypted e-mail to supply Form W-2 information.
SSA officials are meeting with the General Services Administration about using the agency's Access Certificates for Electronic Services (ACES) program to make online filing permanent.
Each year SSA receives 140 million W-2 Wage and Tax Statement forms from U.S. employers, SSA financial management analyst Chuck Liptz said. It must post the data to individuals' cumulative Social Security earnings records and forward the annual information to the IRS for income tax processing.
Of the 6.5 million employers that submit wage data, 5.5 million still send paper W-2 forms, which requires SSA workers to either scan the forms or key in the data.
Legally, any employer of more than 250 people must submit W-2 information electronically, but so far that has translated to companies sending SSA magnetic tapes or disks by postal mail, Liptz said. The agency also maintains a bulletin board posting system separate from the Web.
SSA officials said the Web will be the best way to receive the electronic transmissions in the future, but they want to make sure employers are ready to handle the process, Liptz said. Filers of W-2 data range from huge corporations, such as IBM Corp. and PepsiCo Inc., to 'mom-and-pop shops working at their dining-room tables,' he said.
Each year, the agency has what Liptz called 'a very short window of opportunity' for receiving W-2 data. Companies have until the end of February to submit the previous year's wage data on paper and until the end of March to submit the data electronically.
As things stand now, employers must include signatures on paper to submit W-2 data. Those that send paper W-2 forms must also include a copy of Form W-3, Transmittal of Income and Tax Statements, Liptz said. IRS Form 6559, Transmitter Report and Summary of Magnetic Media, must accompany submissions on tapes or disks.
'We believe it's redundant to send a piece of paper with magnetic media,' Liptz said, so SSA decided to test electronic signatures for the data submissions.
SSA chose Digital Signature Trust Co. of Salt Lake City to conduct the test. Digital Signature is one of three ACES contractors. SSA and Digital Signature signed the contract for the pilot last December, Liptz said.
SSA officials recruited potential pilot participants through its regional offices and through conferences. The participants included employers large and small'restaurants, schools, payroll service companies and a steel company, Liptz said.
The participants had the choice of using a mutually authenticated Secure Sockets Layer session or Secure Multipurpose Internet Mail Extensions encryption. Ninety companies filed through SSL and the Web, and 14 filed through S/MIME e-mail, said Tim Pinegar, a Digital Signature senior engineer.
Three companies filed using both methods. 'I think they were interested in researching what way is more efficient for them,' Pinegar said.
SSA officials also wanted to test whether SSL could handle large data files. At the start of the project, there was some uncertainty about the file sizes, Pinegar said.
SSA contacted an accounting firm that helps companies prepare their annual wage reports and had the firm put 276,000 W-2 reports into a single file, Pinegar said.
Uncompressed, the file took up 130M. Its transmission over the Internet required 74 minutes. Compressed with PKZip 2.04G from PKWare Inc. of Brown Deer, Wis., SSA's standard file-compression utility, the data occupied only 14.8M and took 10 minutes, 16 seconds for transmission to the pilot Web site.
SSA uses a fixed-length record format for W-2 data, so most records have a lot of empty space that a compression utility can squeeze out, Pinegar said.