SSA Scrambling to Correct 1099 Income Reporting Error

January 18, 2008 (PLANSPONSOR.COM) - The U.S. Social Security Administration (SSA) is scrambling to correct an apparent computer glitch that resulted in some SSA benefit recipients getting 1099 forms overreporting their income amount.

A Milwaukee Journal Sentinel news report said the incorrect 1099 forms were sent to some SSA beneficiaries who purchase Medicare Advantage or prescription drug plans under Social Security parts C and D. In some cases, Social Security computers preparing the 1099s included premiums for those plans paid in 2006 as part of benefits received in 2007, leading to the error, the news report indicated.

The incorrect forms were supplied to about 2.7 million Americans. The SSA is spending about $1 million to correct the problem, the report said.

Corrected forms will be sent to all affected Social Security recipients and to the IRS by the end of the month, the agency said.