Social Security Number (SSN) masking protects taxpayers by hiding part of the SSN on recipient copies of IRS forms like Form 1099-NEC, Form 1099-MISC, and W-2. Instead of showing all nine digits, only the last four (e.g., *––1234) appear. Employers use this method to reduce identity theft risk while staying compliant with IRS rules.
Why SSN Masking Matters
The IRS requires SSN masking on recipient copies of information returns. However, the full SSN must appear on the IRS copy for proper reporting. This rule ensures both privacy for taxpayers and accuracy for the IRS. As a result, businesses lower their exposure to fraud while meeting federal compliance requirements.
How SSN Masking Works
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Employers replace the first five digits with asterisks or Xs (*––1234).
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Payroll and HR systems can automate this step to reduce errors.
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The IRS still receives the unmasked SSN to process forms correctly.
For example, a 1099-NEC sent to a contractor may show *––6789, while the IRS receives the full number.
Where SSN Masking Applies
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IRS Forms – 1099-NEC, 1099-MISC, 1099-INT, W-2.
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Employer Records – Payroll stubs, HR records, internal tax copies.
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Communications – Documents where a full SSN is not required.
Improve Accuracy with TIN Matching
Although SSN masking improves privacy, businesses must also confirm that SSNs and Taxpayer Identification Numbers (TINs) match IRS records. Using our TIN Matching Service helps businesses:
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Avoid IRS rejections.
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Reduce penalties from incorrect filings.
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Improve reporting accuracy before submitting forms.
Regulatory Guidance
The IRS outlines masking rules in Publication 1179. These instructions guide employers, payroll providers, and tax preparers on how to properly format SSNs for compliance.
Benefits of SSN Masking
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Protects Privacy: Prevents identity theft on recipient copies.
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Ensures Compliance: Meets IRS and federal security standards.
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Strengthens Security: Limits unnecessary exposure of personal data.