As part of the Annual Wage Reporting process, the Social Security Administration (SSA) verifies the names and SSNs on Wage and Tax Statements (Form W-2) to ensure the reported name and SSN is accurate before SSA posts the information from the W-2 to the Master Earnings File. When SSA’s data indicate a wage earner is a child age 6 or younger, SSA places the earnings in the Earnings Suspense File (ESF), a repository for unmatched wage items, and assigns a Young Children’s Earnings (YCER) indicator. SSA mails notices to employers and employees to confirm the children legitimately earned the wages. However, SSA does not have a process for children between ages 7 and 13. SSA posts these children’s wages to their earnings records.
In addition, if the data include a date of death, SSA places in the ESF all the earnings reported after the year of death and assigns an Earnings After Death indicator. SSA sends notices to the employers and employees to confirm employment.
The purpose of this audit was to determine whether employees were improperly using children’s SSNs for work purposes.