It’s called a TIN – and it’s an essential number when filing W-2s, 1099s, and ACA forms. For most 1099 reporting, a TIN may be a Social Security Number (SSN) or Employer Identification Number (EIN). Why is it important? Because when you are filing your W-2’s or 1099’s, your recipient TIN and name must be complete and match what the IRS/SSA has on file. If it doesn’t, your organization may receive a “B Notice” and eventually a penalty notice that could cost you hundreds of dollars in penalties for every name/TIN mismatch.
Mismatches can happen for a variety of reasons – from typos and transposed numbers to unreported name changes with a marriage or divorce. The bigger concern, however, is missing, incomplete, or outright false SSNs. Because the IRS and SSA keep a close eye on this, it’s vital to carefully check employee and contractor data when filing tax forms.
Matching names and TINs before filing 1099 forms enables payors to take action to correct the information before a filing error occurs. There are two types of TIN matching offered by the IRS:
- Bulk TIN matching matches many records against the IRS’s database at one time. The payor uploads .txt files composed of up to 100,000 name/TIN combinations and receives a response from the IRS within 24 hours on the status of the uploaded records.
- Interactive TIN matching enables payors to quickly verify that information is correct, usually for individual or small groups of forms. The payor can submit up to 25 name/TIN combinations at a time, and the IRS system responds within seconds.
While bulk TIN matching is useful for checking records just before or during reporting season, interactive TIN matching can be incorporated into upstream onboarding processes prior to reporting season. With it, payors can check for name/TIN consistency during the customer and vendor onboarding process, meaning they can correct errors one at a time rather than getting hit with a load of bulk-matching corrections.
For more information on how eFileMyForms can help you ensure accurate name/TIN records please visit our 1099 Reporting Services page.