SSA to take wage reports online

The Social Security Administration has upgraded its Web site to begin accepting

wage reports from employers via the Internet on Jan. 2.

The agency announced Tuesday that it is already issuing personal identification

numbers and passwords to employers to conduct the secure filing of W-2 and

W-3 documents in 2001.

"It's all part of the drive for e-government. It's part of the wave

to provide more services to our customers, and we consider employers our

customers, too," said Mark Hinkle, a spokesman for SSA.

Employers are required annually to report employee wages and taxes to

SSA for the previous calendar year. SSA has been accepting electronic filing

of W-2s since 1998, when it launched the Online Wage Reporting Bulletin

Board Service. That was a dial-up service; the new system is Web-based.

Filing electronically is faster and provides the employer immediate

receipt notification and the ability to check the status of the submissions,

SSA said in announcing the system.

It also decreases the chance of error, according to Michael Mares, a

tax accountant and partner with Witt, Mares and Co., Newport News, Va. "The

less paper you have, the more accurate you're going to be," Mares said,

because there's less opportunity for human error.

Also, "you can make an employer's life easier because it takes one less

step from a normally busy time of year. Usually you also have other payroll

reports to get out, you have to clear out the books," he said.

The downside will be for small businesses if electronic filing becomes

mandatory, he said. "You'd be surprised at the number of small businesses

who do not use a computer," he said, and businesses in remote areas may

face difficulty getting online.

For those employers, he said, the move to electronic filing could become

a new cost, one that would likely require government to exempt them from

electronic filing.

SSA's latest Web site is one of a number of employer-oriented electronic

services that federal agencies have been developing in recent years. In

1995, SSA, the Treasury Department, the Internal Revenue Service, the Labor

Department and the Small Business Administration signed two memorandums

of understanding on the importance of simplifying wage and tax reporting.

That same year, the five agencies launched the Simplified Tax and Wage

Reporting System, which President Clinton subsequently included among various

initiatives for reinventing government.