Direct Fee Payment to Representatives and Form 1099

Direct Fee Payment to Representatives and Form 1099 -MISC Social Security Administration

Introduction We are required to provide taxpayer information to the IRS for direct fee payments made to representatives of claimants for Social Security and Supplemental Income benefits. www. socialsecurity. gov

Introduction To receive your authorized fee directly paid from a claimant’s pastdue benefits, you must be eligible for, and request direct payment. www. socialsecurity. gov

Registration Requirements § § You must register before requesting direct payment, by completing Form SSA-1699, Registration for Appointed Representative Services and Direct Payment. This is a one-time registration. However, if your information changes (e. g. , name, address, business affiliation), you must submit an updated form each time you need to report a change. www. socialsecurity. gov

When Registration is Required You do not need to complete SSA-1699 if you are: § Assisting a claimant with simple tasks as a relative, friend or other acquaintance § Appointed to perform representational services, but will not seek a fee, or you seek a fee but not direct payment www. socialsecurity. gov

How to Register via SSA-1699 § Complete a fillable SSA-1699 online § Print, date and sign the form § Fax to 1 -877 -268 -3827 www. socialsecurity. gov

Information for Direct Fee Payment Each Case To receive direct payment, you must submit section 5 of the new version SSA 1696 Claimant’s Appointment of a Representative for each case you are appointed and seek direct payment of the authorized fee. You must do so even if you are not appointed on the claim (e. g. , 406 (b) court fees). www. socialsecurity. gov

Form SSA-1696 Affiliation and Payment Information

Entities We do not recognize or make direct payments to firms. We only pay individuals. Firms or organizations that employ representatives can register voluntarily using Form SSA-1694, Request for Business Entity Taxpayer Information to receive an informational Form IRS 1099 -MISC to assist them in fee reconciliation. This is a one-time registration, but it is the entity’s and representative’s responsibility to inform us about updates via Form SSA-1694. www. socialsecurity. gov

Entities can complete and submit SSA -1694 online, or on paper (print and complete) and mail or hand deliver to their local Social Security office. www. socialsecurity. gov

Form IRS 1099 -MISC o o We are required to issue a Form 1099 MISC to claimant representatives whom we paid aggregate fees of $600 or more in a calendar year. We send a separate 1099 -MISC to each entity or organization with which representatives associated (affiliated) in each case on Section 5 of the SSA 1696. www. socialsecurity. gov

Form IRS 1099 -MISC and SSA-1694 o o When an entity (employer) registers with us via Form SSA-1694, we send a 1099 -MISC to the entity with all direct payments made to all representatives affiliated with the entity. The total amount will be in Box 7 (nonemployee compensation) on SSA-1099 -MISC. www. socialsecurity. gov

User Fee and 1099 -MISC o o o The law requires us to charge a user fee to cover some administrative costs when we make a direct payment to claimant representatives. We deduct this user fee from the amount payable to you. You cannot collect this expense from the claimant. The amount reported on the 1099 -MISC is the gross amount (before the user fee). www. socialsecurity. gov

Corrections to Form 1099 -MISC Representatives are responsible for updating their personal information and affiliations. We will only correct a 1099 -MISC to account for the following: o Name or address changes; o Remittances of payments made the same calendar year but not properly posted; or o Non-receipt of fees posted to 1099 -MISC.

Corrections to Form 1099 -MISC We do not correct a 1099 -MISC to reflect remittances of payments made prior to the calendar year, or errors that occurred due to incorrect affiliations. In such instances, the representative must contact the IRS or his or her employer to initiate corrections.

Form 1099 -MISC Individual Representatives 1) PAYER’S taxpayer identification number. Social Security’s EIN 2) RECIPIENT’S taxpayer identification number. Your SSN 3) Account number (see instructions)Your employer’s EIN 4) Box 7 - Nonemployee compensation. The amount we paid you directly in 2019 when you are identified in our records as a sole proprietor OR the amount we paid you directly in 2019 when you are identified in our records as an employee of a firm but your firm did not register using Form SSA-1694 by 12/31/19. The deadline to register for tax year 2019 was 12/31/19 and is now too late for your firm to register for tax year 2019. Individuals who receive a 1099 -MISC, with amounts that actually belong to another person or firm, should see General Instructions For Certain Information Returns on the IRS website or contact your employer. 5) Box 14 Gross proceeds paid to an attorney. The amount we paid you directly in 2019 when you are identified in our records as an employee of a firm that registered using Form SSA-1694. Your firm or employer also received a 1099 -MISC. You do not need to report this as income to the IRS. The firm is responsible for reporting these earnings.

Form 1099 -MISC Organizations 1) PAYER’S taxpayer identification number- Social Security’s EIN 2) RECIPIENT’S taxpayer identification number- Your EIN 4) Box 7 - Nonemployee compensation. The amount we paid your employees or representatives directly in 2019 when your firm registered using Form SSA 1694 by 12/31/2019. The deadline to register for tax year 2019 was 12/31/19. It is now too late for your firm to register for tax year 2019. Individuals who receive a Form 1099 MISC, with amounts that actually belong to another person or firm, should see general instructions for this situation on the IRS website.

Understanding the 1099 -MISC Social Security’s EIN PAYER’S Employer Identification Number (EIN) The EIN of the organization that issued your 1099 -MISC www. socialsecurity. gov

Understanding the 1099 -MISC Your Social Security Number (SSN) Your SSN always appears on the form. If you work for an entity your SSN will appear in the “Recipient’s Identification Number” box. If the entity is registered the EIN will appear in the “Account Number” box. www. socialsecurity. gov

Understanding the 1099 -MISC o o If you work as a sole proprietor, your SSN will be the only tax identification on the form and will appear in the “Recipient’s Identification Number” box. If you are a sole proprietor and have an EIN, your SSN will appear in the “Recipient’s Identification Number” box and your EIN will appear in the “Account Number” box. www. socialsecurity. gov

Understanding the 1099 -MISC Your employer’s or firm’s EIN, if registered with SSA. www. socialsecurity. gov

Understanding the 1099 -MISC Individual Representatives Non-employee compensation Box 7 - Non-employee compensation o The amount we paid you directly when you are identified in our records as a sole proprietor. OR o The amount we paid you directly when you are identified in our records as an employee of an entity, but the entity did not register with us via the SSA-1694 by December 31 (the calendar year when the www. socialsecurity. gov payments were made).

Understanding the 1099 -MISC Entities Non-employee compensation Box 7 - Non-employee compensation The amount we paid your employees directly if you registered when via Form SSA-1694 by December 31. www. socialsecurity. gov

Understanding the 1099 -MISC Box 14 - Gross proceeds paid to an attorney o o The amount we paid you directly when you are identified in our records as an employee or representative of a firm that registered using SSA-1694 by December 31. Your firm or employer also received a 1099 -MISC. www. socialsecurity. gov

Incomplete or discrepant data o o If the amount on your 1099 -MISC is incomplete, you must use your own accounting records to supplement the information on income you report to the IRS. If you believe the amounts on your 1099 -MISC belong to another person or firm, refer to the General Instructions for Certain Information Returns on the IRS. gov website for this situation. Specific instructions are on page 2 in Section A. Who Must File Nominee/middleman returns on the IRS website. www. socialsecurity. gov

Getting Help o o Contact your local Social Security office if there is a discrepancy in the amount on your 1099 -MISC and actual amount due to a remittance, returned check or non-receipt of a fee. You can also contact our Representative Call Center toll-free at 1 -877 -626 -6363. www. socialsecurity. gov

FAQs Question Why is my Social Security number on the Appointed Representative Form 1099 -MISC? Answer The Internal Revenue Service (IRS) requires we use your Social Security number to identify you. Your Social Security number will always appear on the 1099 -MISC. o o If you are a sole proprietor and have an Employer Identification Number (EIN), your Social Security number will appear in the Recipient’s Identification Number box and your EIN will appear in the Account Number box. If you work for a firm or organization, your Social Security number will appear in the Recipient’s Identification Number block and the EIN for the firm will appear in the Account Number box. www. socialsecurity. gov

FAQs Question Why do I have more than one Appointed Representative Forms 1099 -MISC? Answer You receive a separate 1099 -MISC for yourself, for every firm or organization with which you registered, but only if you have received payments totaling $600 or more in a year. www. socialsecurity. gov

FAQs Question I made more money than my Appointed Representative Form 1099 -MISC reflects. How can I get the money amount corrected and the payments annotated? Answer If your 1099 -MISC is incomplete, you must use your own accounting records to supplement the information on income you report to the IRS. www. socialsecurity. gov

FAQs Question What is Form SSA-1694 used for? Answer SSA-1694, Request for Business Entity Taxpayer Information, is the form we use to collect the name, address and employer identification number of a firm or organization for which you tell us you work. www. socialsecurity. gov

FAQs Question Should a firm or organization complete a Form SSA-1694 on behalf of each representative in the firm? Answer No. You should complete SSA-1694, Request for Business Entity Taxpayer Information, once, for each employer identification number (EIN) you have registered. www. socialsecurity. gov

FAQs Question Where should I send my completed SSA-1694 form? Answer We suggest you file Form SSA-1694, Request for Business Entity Taxpayer Information, online. However, you can also submit it to your local Social Security office. www. socialsecurity. gov

FAQs Question Should I file an SSA-1694 form every year? Answer No. File a Form SSA-1694, Request for Business Entity Taxpayer Information, only once to register a firm, organization, sole proprietor’s Employer Identification Number (EIN), or to change an existing EIN. www. socialsecurity. gov

FAQs Question What is the deadline for filing a SSA-1694 form? Answer There is no deadline for registering a firm, but for tax purposes, firms are encouraged to submit Form SSA-1694 (Request for Business Entity Taxpayer Information) by December 31 st of the current calendar year. For tax year 2019, this deadline was December 31, 2019. www. socialsecurity. gov

FAQs Question When will the attorney fee checks be addressed to the firm and not the individual representative? Answer At this time, we do not recognize entities or firms, or pay them directly fees we authorize for representational services. This may change in the future, but is not part of our current regulations or requirements. www. socialsecurity. gov