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The Purpose of Having a Social Security Number

A Social Security number (SSN) is a nine-digit quantity that the U.S. authorities points to all U.S. residents and eligible U.S. residents who apply for one. The federal government makes use of this quantity to maintain monitor of your lifetime earnings and the variety of years labored.

When the time involves retire, or for those who ever must obtain Social Safety incapacity revenue, the federal government makes use of the details about your contributions to Social Safety to find out your eligibility and calculate your profit funds. Most individuals will use the identical Social Safety quantity their complete lives, although some individuals would possibly want to use for a substitute quantity sooner or later due to id theft.

Maintain studying beneath to seek out out extra about when and why you want a Social Safety quantity in addition to when it’s best to keep away from utilizing it.

Key Takeaways

  • A Social Safety quantity (SSN) is a singular identifier assigned to U.S. residents and a few residents to trace their revenue and decide advantages. 
  • Along with Social Safety, the SSN is now additionally used for a variety of functions.
  • These embrace acquiring credit score, opening a checking account, acquiring authorities advantages or non-public insurance coverage, and shopping for a house or a automobile, amongst many different pursuits.

When and Why You Want a Social Safety Quantity

Anytime you get employed for a brand new job, your employer will ask in your Social Safety quantity. Your employer’s accounting division will use this quantity to report your revenue to the Inner Income Service (IRS) and to report your Social Safety wages to the Social Safety Administration.

Your employer may also use it for state revenue tax reporting until your state doesn’t have an revenue tax. Employers who take part in E-Confirm, a program to ensure workers can legally work in the US, additionally should acquire your Social Safety quantity earlier than you may start work.

Under are another frequent eventualities the place you’ll want to supply your Social Safety quantity.

When Opening an Account With Any U.S. Monetary Establishment

Since 1970, the federal authorities has required banks to acquire clients’ Social Safety numbers or an Particular person Taxpayer Identification Quantity (ITIN). Financial institutions use your SSN to test your credit score, to report your curiosity and funding revenue or losses to the IRS, to report your tax-deductible mortgage curiosity to the IRS, and to handle your account.

As a substitute, some monetary establishments will settle for a taxpayer identification quantity (on some kinds, additionally known as an Employer Identification Quantity or EIN), which you’ll want to use for by way of the IRS. 

When Making use of for a Federal Mortgage

The federal government will use your Social Safety quantity to be sure you’re eligible while you apply for a federal mortgage, comparable to a federal scholar mortgage. For instance, to qualify for federal scholar loans, you could not be in default on one other federal mortgage, you could have eligible citizenship or customer standing, and most male candidates should have registered with the Selective Service.

When Making use of for Sure Varieties of Public Help

Public help applications, comparable to unemployment benefits or Social Safety incapacity revenue, are often managed by federal or state authorities businesses who use Social Safety numbers to determine individuals and ensure they aren’t claiming advantages that they aren’t entitled to.

When Enrolling in Medicare

The Social Safety Administration works with the Facilities for Medicare and Medicaid Providers to enroll individuals in Medicare. 

When Making use of for a Passport

Federal legislation requires you to supply a Social Safety quantity when you have one while you apply for a U.S. passport. In case you don’t have an SSN, you could present a sworn assertion that you just have been by no means issued one.

On Your Tax Return

The IRS makes use of this quantity to match the revenue you report in your tax return to the revenue your employer and monetary establishments report having paid to you. Additionally, you’ll want to supply your baby’s SSN to assert your baby as a dependent in your tax return.

To Get a Driver’s License

When you have an SSN, many states require that it’s important to present it while you apply for a driver’s license. 

Non-citizens who don’t have Social Safety numbers are exempt from offering a Social Safety quantity in lots of conditions that usually require it, together with getting a driver’s license, registering for varsity, getting non-public medical insurance, or making use of for public help comparable to sponsored housing. The federal government doesn’t like to provide Social Safety numbers to non-citizens who aren’t approved to work in the US. It says that even banks and credit score firms often can’t require you to supply a Social Safety quantity for those who don’t have one.

Nonetheless, with out this quantity, monetary establishments received’t be capable of run a credit check on you, which might make it tough, if not not possible, to get a bank card or mortgage.

When to Keep away from Utilizing Your Social Safety Quantity

Federal legislation principally lets anybody ask in your Social Safety quantity, however that doesn’t imply it’s essential to give it out. You need to use your Social Safety quantity as occasionally as attainable. Simply because somebody asks for it doesn’t imply they really want it.

For instance, although most medical suppliers will ask in your SSN, you may depart the road asking for it clean when filling out medical paperwork, and sometimes, nobody will query it. Your physician’s workplace and different companies can use different info to determine you and maintain monitor of your information. That mentioned, when you can refuse to supply your SSN, the opposite celebration may refuse to do enterprise with you.

You additionally shouldn’t carry your Social Safety card round with you until you can be utilizing it for a selected goal that day, comparable to while you’re filling out paperwork to begin a brand new job, and it’s important to present it to your employer as proof of citizenship (although for those who can present a sound passport, you don’t want to supply your Social Safety card).

You don’t need to threat shedding your card or having it stolen since thieves can use this quantity, together together with your different private knowledge, to use for credit score, take out loans, get a job, and even get well being care in your title, making a doubtlessly huge id theft drawback so that you can clear up.

As a substitute, maintain the cardboard in a safe place at dwelling or in a safe deposit box on the financial institution. In case your card is misplaced or stolen, you’ll need to apply for a brand new one.

Equally, it’s best to maintain any paperwork that include your SSN, comparable to your tax returns, in a safe place. If somebody have been to interrupt into your own home, it might be higher for you if they might solely make off together with your stuff and never your id. You additionally must rigorously safeguard your digital paperwork that include your Social Safety quantity. When you have an unencrypted PDF of your tax return in your laptop computer, you’re successfully carrying your Social Safety card each time you are taking your laptop with you on a visit or to a espresso store.

The Backside Line

When the federal government launched the Social Safety program with its numbers in 1936, it was by no means meant to be so broadly used to determine and monitor people. As we speak, this quantity is used for every little thing from its unique goal—to trace your lifetime earnings and calculate your Social Safety advantages—to opening a checking account or filling out a brand new affected person kind on the physician’s workplace.

Many companies will ask in your Social Safety quantity just because it’s a handy manner for them to determine clients. Sadly, criminals can use your Social Safety quantity to commit id theft, so it’s best to guard your SSN rigorously and solely give it out when completely obligatory.

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