When you get your Form W-2 in early 2017, you may notice a new entry — a 16-digit verification code. This is part of an effort conducted by the Internal Revenue Service to protect taxpayers and strengthen anti-fraud efforts.
The expanded use of the W-2 Verification Code is a way to validate the wage and tax withholding information on the tax form. For taxpayers, taking a moment to add this code when filling out their taxes helps the IRS authenticate the information. This in turn helps protect against identity theft and unnecessary refund delays.
For 2017, the IRS and its partners in the payroll service provider industry will place the code on 50 million Forms W-2. This is up from two million forms in 2016.
The IRS, state tax agencies and the nation's tax industry — partners in combating identity theft — ask for your help in their efforts. Working in partnership with you, we can make a difference.
That's why we launched a public awareness campaign that we call Taxes. Security. Together. We've also launched a series of security awareness tips that can help protect you from cybercriminals.
One area where we need your help is with the W-2 Verification Code. If your W-2 contains the code, please enter it when prompted if using software to prepare your return. Or, please make sure your tax preparer enters it.
If the code is not included, your tax return will still be accepted. However, initial results indicate the verification code shows promise in reducing tax fraud. It helps IRS processing systems authenticate the real taxpayer. Identity thieves sometimes file false Forms W-2 to support their fraudulent tax returns.
This initiative will affect only those Forms W-2 prepared by payroll service providers. The verification code's location on the form will vary. Enter the code on electronically filed returns only. Most software providers will prompt you to enter the code.