State Financial Services Division

Deliver services that support the transparency, accountability, and effective management of public funds

State Social Security Administration

Frequently Asked Questions

The State Social Security Administrator (SSSA)

  • assists local governments in securing Section 218 coverage for their employees,
  • assists in ensuring local governments are properly withholding and reporting Social Security and Medicare,
  • acts as a liaison with the Social Security Administration (SSA) and Internal Revenue Service (IRS) to address coverage related issues and questions, and
  • performs education and outreach to State and political subdivision employers and employees.

When the Social Security Act (the Act) was enacted in 1935, Social Security coverage was limited to private sector employees. States, their political subdivisions, and interstate instrumentalities, were not originally included in this legislation. However, with the Social Security Amendments of 1950, Congress created Section 218 of the Act. Effective January 1, 1951, Social Security coverage became available to State and local government employees through a unique Federal-State agreement authorized by Section 218.

These agreements, referred to as Section 218 Agreements, are written voluntary agreement between a State and the Social Security Administration (SSA) to provide Social Security and Medicare Hospital Insurance (HI) or Medicare coverage only for employees of State and local governments. This agreement is authorized under Section 218 of the Social Security Act. Employees covered under a Section 218 Agreement have the same coverage and benefit rights as employees in the private sector. All States have a Section 218 Agreement, but the extent of coverage varies.

Reasons to contact the SSSA include:

  • When an entity's name changes;
  • When (or prior to) a new entity is created;
  • When an entity is merging with, or separating from another: Annexation, Consolidation, and/or Dissolution;
  • When an entity is non-operational for 3 or more years;
  • When the IRS audits and requests to see an entity's Section 218 Agreement - the SSSA maintains record of all existing Montana agreements;
  • When organizing a joint educational outreach session - the SSSA assists in coordinating with the SSA and IRS;
  • To receive assistance in determining if an entity is a political subdivision;
  • To receive assistance in determining whether Mandatory Social Security and Medicare coverage is necessary or if a Section 218 Agreement is needed;
  • To receive assistance in determining what "coverage groups" (by retirement) are covered by a Section 218 Agreement - some entities may have more than one retirement system (example: most counties have some employees under PERS and some employees under SRS);
  • To receive assistance in obtaining Section 218 coverage - when an entity (or board of an entity) wishes to start paying Social Security for their employees.


WASHINGTON - The Internal Revenue Service, state tax agencies and the tax industry issued an urgent alert today to all employers that the Form W-2 email phishing scam has evolved beyond the corporate world and is spreading to other sectors, including school districts, tribal organizations and nonprofits.

In a related development, the W-2 scammers are coupling their efforts to steal employee W-2 information with an older scheme on wire transfers that is victimizing some organizations twice.

"This is one of the most dangerous email phishing scams we"ve seen in a long time. It can result in the large-scale theft of sensitive data that criminals can use to commit various crimes, including filing fraudulent tax returns. We need everyone"s help to turn the tide against this scheme,"" said IRS Commissioner John Koskinen.

When employers report W-2 thefts immediately to the IRS, the agency can take steps to help protect employees from tax-related identity theft. The IRS, state tax agencies and the tax industry, working together as the Security Summit, have enacted numerous safeguards in 2016 and 2017 to identify fraudulent returns filed through scams like this. As the Summit partners make progress, cybercriminals need more data to mimic real tax returns.

Here"s how the scam works: Cybercriminals use various spoofing techniques to disguise an email to make it appear as if it is from an organization executive. The email is sent to an employee in the payroll or human resources departments, requesting a list of all employees and their Forms W-2. This scam is sometimes referred to as business email compromise (BEC) or business email spoofing (BES).

The Security Summit partners urge all employers to be vigilant. The W-2 scam, which first appeared last year, is circulating earlier in the tax season and to a broader cross-section of organizations, including school districts, tribal casinos, chain restaurants, temporary staffing agencies, healthcare and shipping and freight. Those businesses that received the scam email last year also are reportedly receiving it again this year.

Security Summit partners warned of this scam"s reappearance last week but have seen an upswing in reports in recent days.

New Twist to W-2 Scam: Companies Also Being Asked to Wire Money

In the latest twist, the cybercriminal follows up with an "executive" email to the payroll or comptroller and asks that a wire transfer also be made to a certain account. Although not tax related, the wire transfer scam is being coupled with the W-2 scam email, and some companies have lost both employees" W-2s and thousands of dollars due to wire transfers.

The IRS, states and tax industry urge all employers to share information with their payroll, finance and human resources employees about this W-2 and wire transfer scam. Employers should consider creating an internal policy, if one is lacking, on the distribution of employee W-2 information and conducting wire transfers.

Steps Employers Can Take If They See the W-2 Scam

Organizations receiving a W-2 scam email should forward it to and place "W2 Scam" in the subject line. Organizations that receive the scams or fall victim to them should file a complaint with the Internet Crime Complaint Center (IC3,) operated by the Federal Bureau of Investigation.

Employees whose Forms W-2 have been stolen should review the recommended actions by the Federal Trade Commission at or the IRS at Employees should file a Form 14039, Identity Theft Affidavit, if the employee"s own tax return gets rejected because of a duplicate Social Security number or if instructed to do so by the IRS.


The election worker threshold was raised to $1,900 in 2020 and $2,000 in 2021. Earnings below the threshold are not taxable under Social Security, nor do such earnings count towards future benefits.

Please see:


Windfall Elimination Provision Fact Sheet

Government Pension Offset Fact Sheet


125 N. Roberts St.
Rm. 259 Mitchell Bldg.
P.O. Box 200102
Helena, MT 59620-0102

Please Note:

The SSSA acts as a liaison for local governments, the SSA, and the IRS. If you have personal benefit questions in regards to your:

Social Security, please contact your local Social Security office, which can be found at the  Social Security Office Locator or by calling 1-800-772-1213.

Medicare, please contact a Medicare resource found at  Helpful Medicare Contacts for Montana or by calling 1-800-633-4227.


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