Background. For many years the Social Security Administration has sent a "personal earnings and benefit estimate statement" (PEBES) to any person who requested one. This statement displays the person's earnings based on either self-employment income or information provided by employers on W-2 forms. The statement also provides an estimate of benefits that the person may be eligible for both now and in the future.
Unfortunately, few workers ever request this information and this has led to many undetected problems. Here are some common examples:
- A nonminister church employee's social security benefits are reduced because the church failed to report one or more taxable fringe benefits on the employee's W-2 forms. To illustrate, a church fails to report the value of the personal use of a church-provided car as income on an employee's W-2. By understating the employee's wages subject to social security (FICA) taxes, the church is reducing the employee's social security benefits which are based on those earnings.