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What is a Social Security Number and How Does It Work

by Shokunbi Adebayo

What is a Social Security Number, Social Security Number

Social Security Number Explained

Each state in the world has its methods for keeping track of its residents via official papers/certificates. In the US, one of the identifying tools is a social security number (SSN) that consists of nine digits. A social security number is issued to US citizens, temporary (working) residents, and permanent residents under section 205(c)(2) of the Social Security Act codified as 42 U.S.C. § 405(c)(2). The Social Security Administration issues social security numbers, and while it was mainly meant to keep track of residents for Social Security, the SSN is now a means for national identification, as well as taxation. To get a Social Security Number, and an individual has to fill out and submit an SS-5 form, which is an application for a Social Security Number Card.

Social Security Number History

The first Social Security Numbers were issues in November 1935 by the Social Security Administration. The numbers were issued as part of a New Deal Social Security program, and there were 25 million such numbers issued within three months. To provide US residents with their Social Security Numbers, the US government designated 1,074 post offices to type up Social Security cards on November 1936. The cards that were issued were sent to Washington, D.C. On December 1, 1936. The cards became a part of a publicity campaign, and there was one person who was selected as the owner of the first social security number - John David Sweeney, Jr., from New Rochelle, New York.

What is a Social Security Number

For the first few decades, US residents were not issued a Social Security Number until they turned 14 because these numbers were mainly used for taxation and income tracking. In 1986 there was a Tax Reform Act that required parents to make sure each dependent over the age of 5 gets a Social Security Number. The reform allowed parents to get tax deductions for the children they supported, and it helped the authorities to make sure people do not commit fraud by claiming they have more dependents than they do. As a result of the reform, there were 7 million less minor dependent claims compared to the previous year. In 1988, there was another change – from that point on, parents were required to issue Social Security Numbers to dependents from the age of 2. By 1990, the age was lowered to 1 year old. As of today, SSNs must be issued regardless of the child's age, and many parents file a request to get an SSN soon after their child's birth.

Types of Social Security cards

As of today, there are three types of Social Security issued by the Social Security Administration:

Card with the cardholder's name and number – these types of SSN cards are issued to U.S. permanent residents and U.S. citizens, and they are the most common SSN cards.
Not valid for employment – a restricted SSN card that is not acceptable as a List C document on the I-9 form and cannot be used as proof of work authorization.
Valid for work only with DHS authorization – another restricted card that is issued to those who have a temporary work authorization in the U.S. To get this card, the applicants must provide a work authorization card.

What is a Social Security Number For?

When it was first issued, a Social Security Number was used to track people's accounts. Over the next few decades, things have changed, and Social Security Numbers were used for more than just taxation; today SSNs are used as a means of identification for US residents. There are some cases where the SSA offices make duplicate SSNs, but these instances are pretty rare. Social Security Numbers are used for identification is different places, like with student records, employee records, patient records are other records that are indexed by Social Security number.

The SSNs are also used an identification means in the U.S. Armed Forces for Army and Air Force personnel since July 1, 1969. The Navy and Marine Corps also use Social Security Numbers as identification means for their personnel since July 1, 1969. The Coast Guard uses the numbers as identification means for its personnel since October 1, 1974.

So, the main purpose of a social security number is to help identify people for different purposes. Individuals who do not have an SSN assigned to them, it will be difficult for them to take part in financial activities, like applying for a credit card. To disclose an SSN, the government and other authorities must have a legal reason for the request. However, if a person refuses to provide their SSN, companies can refuse to provide their services. This situation is tricky because as of today, an SSN card does not have a photo of the individual it was issued for, not birth date, and no physical description. So, such cards merely confirm that a person was issued with a Social Security Number.

What is a Social Security Number For

Social Security Numbers and Taxation

According to the Internal Revenue Code section 6109(d): "The social security account number issued to an individual for purposes of section 205(c)(2)(A) of the Social Security Act [codified as 42 U.S.C. § 405(c)(2)(A)] shall, except as shall otherwise be specified under regulations of the Secretary [of the Treasury or his delegate], be used as the identifying number for such individual for purposes of this title [the Internal Revenue Code, title 26 of the United States Code]."

So, to pay taxes, get returns, file tax statements, and perform other financial activities with the Internal Revenue Services, one must have an SSN. Also, any person who works as an employee for wages is subject to Social Security taxes, U.S. federal income tax withholdings, and Medicare taxes has to have an SSN.

The Social Security Number has a very important role in the identification process in the US. The role of the SSN has changed over the years, and these days, residents and citizens of the US who want to work or perform financial transactions must have identification means in the form of a Social Security card with an SSN on it.