When Does the IRS Report Earnings to Social Security?
Understand the data exchange between the IRS and Social Security that ensures your earnings are correctly credited toward your future benefits.
The Internal Revenue Service (IRS) and the Social Security Administration (SSA) work together to ensure that a worker’s earnings are properly recorded. This relationship is important for the calculation of future Social Security benefits, which include retirement, disability, and survivor payments. The IRS is primarily responsible for collecting tax information from individuals and employers. This collected data, which contains details about annual earnings, is then systematically shared with the SSA.
The SSA uses this earnings information to update an individual’s lifelong earnings record. The accuracy of this record directly impacts the amount of benefits a person or their family may eventually receive.
The Annual Data Exchange Process
The reporting of earnings from the IRS to the SSA is an ongoing, automated process. After individuals and businesses file their annual tax returns, the IRS processes this information and the relevant earnings data is electronically transmitted to the SSA. This systematic exchange ensures that the SSA has up-to-date information to credit to individual earnings records.
This data exchange relies on a formal agreement between the two agencies. The IRS compares the income and tax withholding information reported by employers with the wage data that the SSA receives. This matching program helps identify discrepancies between what employers report to the IRS and what is reported to the SSA for individual employees.
Reporting Mechanism for Employees
For individuals who work for an employer, the process of reporting earnings to the SSA is handled by their employer. Employers are required to prepare and file a Form W-2, Wage and Tax Statement, for each employee. This form details the employee’s total wages, tips, other compensation, and the amount of Social Security and Medicare taxes withheld.
Employers must send Copy A of all their employees’ W-2 forms to the SSA by January 31st of the year following the tax year. When an employee later files their Form 1040 with the IRS, the tax agency’s role is to reconcile the income reported by the individual with the data already on file from the employer.
Employers who file 10 or more information returns are required to file their W-2s electronically. This electronic submission is done through the SSA’s Business Services Online (BSO) portal, which streamlines the process.
Reporting Mechanism for Self-Employed Individuals
For self-employed workers, the reporting of earnings to the SSA is entirely dependent on their annual federal income tax filing. The primary document in this process is the Schedule SE, Self-Employment Tax, which is filed along with the Form 1040. A self-employed person must file this schedule if their net earnings from self-employment are $400 or more.
On Schedule SE, the individual calculates their net earnings. This figure is then used to determine the amount of self-employment tax owed, which covers both Social Security and Medicare contributions. Unlike employees who split these tax payments with their employer, a self-employed person pays the full amount, which is 12.4% for Social Security on earnings up to the 2025 annual limit of $176,100 and 2.9% for Medicare on all net earnings.
Once the Form 1040 and the attached Schedule SE are filed and processed by the IRS, the IRS transmits the net earnings from self-employment figure to the SSA.
How to Verify Your Social Security Earnings Record
You should periodically check your Social Security earnings record for accuracy by creating a “my Social Security” account on the SSA’s website, ssa.gov. This account provides immediate access to your earnings history as a year-by-year breakdown.
When reviewing your record, compare the earnings listed for each year against your own records, like W-2s and personal tax returns. Ensure that earnings are posted for every year you worked and that the amounts are correct, keeping in mind that recent earnings may not be posted yet.
If you discover an error, such as missing or incorrect wages, you must contact the SSA directly, not the IRS. To support your claim, you will need to provide evidence of your earnings, such as copies of W-2s, pay stubs, or filed tax returns. You can submit a correction request online, by calling the SSA’s toll-free number, or by mailing Form SSA-7008, Request for Correction of Earnings Record, to the agency.