The Internal Revenue Service (IRS) finalized regulations allowing employers to voluntarily truncate, or partially mask, Social Security numbers (SSNs) or taxpayer-identification numbers (TINs) on W-2s and other tax statements distributed to their employees. The new rule, which will take effect beginning in 2021, aims to help protect people from identity theft by hiding portions of an employee’s SSN or TIN. The IRS finalized the rule on July 3, 2019.
Under the new regulation, employers can cover the first five numbers of an employee’s SSN or TIN with asterisks or X’s. For example, a truncated SSN may appear as:
XXX-XX-1234 or ***-**-1234
Truncation is not mandatory, and only permitted on W-2s and W-2cs delivered to an employee, either electronically or by mail. Form W-2 instructions will be updated to explain that truncation is voluntary. Documents sent directly to the Social Security Administration and the IRS cannot have truncated numbers on them to ensure accurate wage information.
Read the final rulemaking in the Federal Register for details.