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Representing Claimants Home | ![]() Registration Requirements for Representatives to Receive Direct Payment of Approved Fees and Forms 1099-MISC |
What Is The Change? |
Beginning January 1, 2007, the requirements a representative must meet for the Social Security Administration (SSA) to pay all or part of an approved fee directly to the representative from a claimant’s past-due benefits change.
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What Is Required? |
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Why the Change? |
SSA must expand the information a representative provides in order to receive direct fee payment for two reasons.
To comply with these requirements, SSA requires that the representative provide us with his or her SSN before we implement a favorable administrative determination or decision, or before we act on a Federal court’s fee approval, as a condition for SSA to directly pay a fee or a portion of the fee to the representative from a claimant’s past-due benefits. | |
What Happens in Cases Pending on January 1, 2007? |
To afford a smooth transition, the additional requirements apply:
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Who May Register, and When? |
An attorney or a non-attorney participating in the direct payment demonstration project may complete and file the SSA-1699 now, even if he or she is not representing a claimant at this time. A non-attorney who has applied to participate, but has not yet been found eligible, should register on receiving notice that SSA has determined he or she is eligible to participate in the demonstration project. The Form SSA-1695, Identifying Information for Possible Direct Payment of Authorized Fees, is now available for use. The completed paper form should be sent or delivered to the local Social Security Office. In order to receive direct payment, an attorney or a non-attorney who is participating in the direct payment demonstration project may complete the SSA-1695 each time he or she is appointed to represent a claimant before SSA. An attorney who did not register when the claim was pending before SSA should complete the SSA- 1695 and submit it to the local Social Security Office each time the Federal court approves a fee. |
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Is There Also a Registration for Firms or Employers? |
Law firms, partnerships, corporations, and multi-member LLCs/LLPs (LLC–Limited Liability Company, LLP–Limited Liability Partnership) that have attorneys or non-attorney representatives or both as partners or employees may register voluntarily, in anticipation of receiving Forms 1099-MISC. The firm or other business entity may file a Form SSA-1694, Request for Business Entity Taxpayer Information, online or by sending or delivering a completed paper form to the local Social Security office. |
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If a Representative is an Employee or Partner of a Firm, and the Fee Payment is Income to the Firm, will the Representative Receive a Form 1099-MISC? |
Generally, pursuant to section 6041 of the IRC, SSA is required to issue a Form 1099-MISC to each representative who receives aggregate fees of $600 or more in a calendar year, with the total fee payments reflected in box 7 (non-employee compensation). However, the Internal Revenue Service (IRS) has provided SSA with special procedures for those situations where SSA makes payments to representatives who are employees or partners in a firm. Specifically, if SSA learns that a representative is acting as an employee or partner in a firm (therefore, the fee payments are income to the firm) and the firm has provided SSA with the name, address, and employer identification number of the firm (via the Form SSA-1694 registration process for firms), then SSA should issue two Forms 1099-MISC. Pursuant to section 6041 of the IRC, SSA should issue a Form 1099-MISC to the firm with aggregate payments made to the firm's associates in box 7 (non-employee compensation). In addition, pursuant to section 6045(f) of the IRC, SSA should also issue a Form 1099-MISC to each of the individual representatives (i.e., employees or partners) reporting their individual aggregate payments in box 14 (gross proceeds paid to an attorney). |
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Will the Gross or Net Aggregate Fee Payments be Reported on the Form 1099-MISC? |
Section 406 of Public Law 106-170, the Ticket to Work and Work Incentives Improvement Act of 1999, established an assessment for the services required by SSA to determine and certify payments to representatives under the section 206(d) of the Social Security Act. This assessment is currently deducted from each fee payment to representatives. However, pursuant to 1.6041-1(f) of the IRC regulations, the IRS considers the gross amount (before the assessment) as the amount that should be reported on the Form 1099-MISC. The aggregate assessments may be taken as a business expense as appropriate. |
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Do Representatives Have the Option to Receive Fee Payments Via Direct Deposit? |
Direct deposit of fee payments for both title II claims and title XVI claims is available for representatives who have completed both steps in the registration process and requested fee payment by electronic fund transfer. The financial institution receiving the direct deposit is provided with information which may assist representatives to identify the source of the payment. This information includes the first four letters of the claimants' first name, the first thirteen letters of the claimants' last name, any suffix to the claimants name, the claimants' SSN, and the payment amount. It is at the discretion of the financial institution to provide this information to representatives and other account holders. |
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Federal Register Announcement of New Registration Requirements |
In its Federal Register notice published October 2, 2006 (71 Fed. Reg. 58043), SSA announced the new registration requirements for representatives to receive direct payment of fees approved for services provided before the Social Security Administration or a Federal Court and Forms 1099–MISC. Federal Register/Vol.71, No. 190/Monday, October 2, 2006/Notices |
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SSA Fact Sheet on Representative Registration Requirements |
The fact sheet , entitled [ “ New Registration Requirements for Direct Payment to Representatives ” ] is available in both electronic and paper format. Information on how to order multiple copies can be found on the Social Security Online [publications website] . |
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Last reviewed or modified Wednesday Apr 01, 2009 |