The most common error employers received in the 1095-C acknowledgement file was the TIN validation error. (TIN stands for Taxpayer Identification Number.) This error indicates the the IRS could not match the social security number and name information provided in the electronic 1095-C record to the Social Security Administration’s database.
There are several reasons for a TIN Validation can occur. It could be a problem where the data was not entered correctly either in your payroll system or in the Social Security Administration’s system. A typo or transposed letters when entering the employee’s name could trigger the error. The electronic 1095-C file splits up the employee name into separate first, middle, last and suffix fields. It could be that you have the correct employee name, but the middle name was entered in the last name field. It could be that you are missing the middle name (perhaps the employee didn’t include it on their I-9 f0rm).
Unfortunately the IRS has not explained what criteria will produce a TIN Validation error. For instance, we do not know if a missing middle name (but all other information correct) will product a TIN Validation error. You may end up playing a guessing game trying to get the employee’s name to match the Social Security Administration’s database, unless you have an actual copy of the employee’s social security card to check against the name that you have entered into the payroll system. (This is especially true of the error is with the Social Security Administration’s database!)
For employees that use two last names, it is also possible that the last names are listed in a different order than in the SSA’s database, that the SSA only has one of the last names that the employee has given you, or that the last names are separate by a dash instead of a space in the SSA’s database.
In addition to a typo or difference in the names, the social security number may have been entered into your payroll system incorrectly. Sometimes a typo in the social security number goes unnoticed until the employee receives their W-2 with the incorrect social security number.
It is also possible that the employee is not using their own social security number. However, you cannot assume that this is the case, and you cannot take any adverse action against the employee based solely on a TIN Validation error.
Whatever the reason, the IRS does require that correct information be provided on the forms that you file. There are penalties for filing incorrect information. Publication 1586 explains that steps employers must take to verify employers must take when notified of an incorrect name/TIN combination. In the case of a TIN Validation error, you are required to make efforts to obtain corrected information from the employee. This includes making a solicitation for corrected information by December 31 of the calendar year in which a TIN Validation notice is received. Taking the appropriate steps and documenting that you have taken them is important to avoid penalties.
The first step to dealing with a TIN Validation error is to check your own records. Verify that the social security number and name information entered into the payroll system matches the information that you have on any copies of identification documents (if you have copies), paper forms or electronic copies of forms that the employee originally filled out when they were hired or last rehired. This may turn up a typo or error that needs to be corrected.
The second step to dealing with TIN Validation errors is to request corrected information from the employees. The latest update to the HR program contains new features to make this easier. This update can be downloaded via the Tools->Check for Updates option.
The Electronic ACA Acknowledgement Report now has an option to export the details on each TIN Validation error to an Excel spreadsheet. It can also print notices that you can mail to employees using a template in an RTF (Rich Text Format) file.
First, select the electronic file that you submitted using the lookup on the Filename entry. The Receipt ID and Acknowledgement file should already be listed for this file (assuming that you entered the Receipt ID and attached the acknowledgement file after the IRS processed your file). If you do not have these filled in, you will need to first enter the Receipt ID and locate the Acknowledgement file and select it.
If you want to export the TIN Validation details to an Excel file, enter a filename for the TIN Validation Export File. The Excel file can in turn be used as part of a mail merge/merge print to generate the solicitation notices that are sent to employees.
The Excel file will contain columns showing the Record ID from the 1095-C file, the employee’s account number, each of the data fields reported on the electronic 1095-C file, the current information in the employee file, a column indicating whether something has changed since the 1095-C file was generated (a zero in this column indicates no change, a 1 indicate a change was made) and columns for the employee’s current mailing address. If the employee’s name or social security number has been changed since the 1095-C file was generated, the item that was changed will be highlighted in red text:
The Excel file can be used with Word to generate a mail merge/merge print document to send notices to employees and/or print mailing labels.
If you want to generate the notices directly from the program, then you can create a template to use for the solicitation notice in Rich Text Format and select that filename for the Employee Notice RTF entry.
Creating a Template
Microsoft Word can be used to create a notice if you use the Save As command and select Rich Text Format (.RTF) as the file format instead of Microsoft Word (.DOC or .DOCX). You can also use WordPad (built into all versions of Windows) to create a template file. (WordPad uses Rich Text Format as the default format.)
The template file will contain codes enclosed in square brackets that are replaced with information from the 1095-C form or the employee file when the notice is printed. For example, the social security number reported on the 1095-C form will replace the code [1095C.SSN] when it appears in the template file. The online help has a complete list of codes that may be used in the template. Press [F1] on the Electronic ACA Acknowledgement Report window and go to the Merge Field Codes for Notices section.
Two sample templates are provided in the “Templates” folder under the main application folder. Do not use these provided templates as-is! They are provided simply as examples of how to create a template. If you have not sent out notices like this in the past, it would be a good idea to have your human resources and labor lawyer work together on the wording for your own notice. You may also want to translate the notice into Spanish and print both an English and Spanish notice on each side of the page.
Both templates contains the same wording. The second template is formatted to print the company name/address and employee name/address for a window envelope.
The notice that you send to employees should clearly identify the information that was submitted in the 1095-C electronic file. As shown in the sample templates, we recommend that each data field be printed separately, rather than printing the employees’ entire name all together. This may help employees see what may be the problem with the information that you submitted. For instance, if there is a problem such as a surname was mistakenly entered as a middle name, the only way this will be clear is if the notification indicates you reported the surname as the middle name.
12/8/16 Update: Some customers are missing the Templates folder and the sample files, either because they downloaded an update to The Farmer’s Office or The Labor Contractor’s Office which also includes the HR program (but not the samples) or because they have have been manually updated to a newer version. We have created two links so that you can download the sample SSN solicitation template files:
12/8/16 Update #2: By popular demand, Mayra translated the sample notices into Spanish. You can combine these with the English notices to print both languages on the front and back of a single page. Here are the links to the Spanish language sample notices: