Social Security Number (SSN)

A Social Security number is a unique nine-digit number assigned by the Social Security Administration to an individual. SSA's regulation states its purpose: "The Social Security Administration (SSA) maintains a record of the earnings reported for each individual assigned a social security number. The individual's name and social security number identify the record so that the wages or self-employment income reported for or by the individual can be properly posted to the individual's record." The Social Security Act calls it a "social security account number."

The number was created for Social Security, but it now serves as an individual's taxpayer identification number, and federal law allows states to use it for their tax, public assistance, driver's license and vehicle registration programs. Someone who has a federal tax obligation but cannot get an SSN uses an individual taxpayer identification number (ITIN) from the IRS instead.

How a number is assigned. There are three routes in SSA's regulations. A person can apply with "evidence, as necessary, to assist us in establishing your age, U.S. citizenship or alien status, true identity, and previously assigned Social Security number(s), if any." A parent can request a number for a newborn as part of the state's birth registration process, where a state has an agreement with SSA. And a noncitizen can request one through the immigration process. SSA checks its files first: a person who already has a number gets a replacement card, not a new number.

The card and its legends. The card is SSA's property and "must be returned upon request." Cards for U.S. citizens and permanent residents carry no restrictive legend. Others carry "Not Valid for Employment" or "Valid For Work Only With DHS Authorization," depending on immigration status. Replacements are limited to "no more than three replacement social security number cards in a year and ten replacement social security number cards per lifetime," although legal name changes and changes in the restrictive legend do not count toward the limits, and SSA may allow other exceptions in compelling circumstances.

Where you must give it. On a federal tax return and to anyone who files an information return about you, such as an employer or a bank paying interest. On applications for Social Security, Medicare and other federal benefits. To state agencies for taxes, public assistance, driver's licenses and vehicle registration, which the Social Security Act expressly permits them to require. And, in a growing number of tax rules, as a condition of a credit or deduction: the child tax credit, for example, now requires the child's number and the taxpayer's own (on a joint return, at least one spouse's), each issued to a citizen or a person authorized to work, before the return's due date.

Why it is a target. Because one number links earnings, taxes, credit and benefits, a stolen SSN is the raw material for many kinds of identity theft, including tax-refund fraud, synthetic identity fraud and fraud against children who have no credit history yet. Protecting it, and knowing what to do when it is exposed, is covered on those pages.

1. The number is requested by application, at birth through the state's vital records process, or through immigration.
2. SSA verifies age, identity and citizenship or immigration status, and checks for an existing number.
3. SSA assigns the number and mails the card.
4. Earnings are posted to it each year from W-2s and self-employment tax returns, building the record benefits will be based on.
5. The number is reused for life on tax returns, benefit applications and financial accounts.

Consider an example: Daniela and Rafael file jointly, both with Social Security numbers. Their son has an SSN; their daughter, who lives with them in the United States but is not yet eligible for an SSN, has an ITIN. On this year's return only the son can bring the child tax credit of $2,200. The daughter cannot qualify for that credit without a work-authorized SSN issued before the return's due date, and the statute instead treats her as a dependent for the $500 credit for other dependents.

Pros

• One permanent number ties a lifetime of earnings to the benefits they earn, across every employer.
• It makes tax reporting and identity verification consistent across agencies and institutions.
• Parents can request a newborn's number at birth without a separate application.

Cons

• Because so many systems rely on it, a stolen number can be used for tax, credit and benefits fraud.
• Replacement cards are capped, so a lost card cannot be replaced indefinitely.
• Tax credits that require an SSN exclude family members who have only an ITIN, even when they otherwise qualify.