What Can You Do With a Social Security Number?
Although implemented for a specific purpose as part of Franklin Roosevelt's New Deal and creation of the Social Security program, Social Security numbers are being used for a number of different purposes. In some instances, the manner in which Social Security numbers are being used today has reference to a specifically enacted law. However, there are other instances in which Social Security numbers are utilized without any definite legal authorization.
Based on the manner in which Social Security numbers have come to be used over the course of the past 60-plus years, confusion does exist in regard to what you can do with a Social Security number. Clarifying this issue can be helpful to people from all walks of life.
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History
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One of President Roosevelt's major initiatives was the creation of the Social Security Administration. Upon the creation of this federal governmental agency, Social Security numbers were assigned to the American people for the first time. With the creation of the agency, and during its early years in operation, Social Security numbers were used exclusively to identify the accounts that were established for individual citizens of the United States.
In time, the national government recognized that Social Security numbers were useful in identifying individuals for the purposes of paying federal taxes, especially income taxes. The decision to use Social Security numbers for tax matters was the first step in what became a significant expansion of such utilization.
Federal and State Taxation
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As the number of taxpayers grew, the IRS expressed concerns about accurately tracking these individuals and their payments to the agency, and appropriately issuing refunds as necessary. Rather than create a distinct and separate numerical system, the IRS elected to adopt the use of Social Security numbers.
Some taxpayers wrongly assume that they do not need to include their Social Security numbers on tax returns and related documents. These individuals argue that the number legally can only be used for matters pertaining to the Social Security Administration. In fact, there is specific legislation in place that mandates the use of Social Security numbers in matters relating to the IRS, including the filing of tax returns.
The federal government also enacted legislation that permitted the individual states to use Social Security numbers for dealing with tax issues. At this time, each state does use Social Security numbers for dealing with taxpayers through their own taxing authorities.
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Military Identification
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If you ever watched a "war movie," odds are you saw an actor give his "name, rank and serial number." Beginning in the early 1970s, each branch of the U.S. military adopted the Social Security number of each service member as his military identification (or serial) number. Because military serial numbers were complicated and lengthy, the service branches tended to welcome this change--if only because the process of identifying service members became far easier.
Financial Accounts and Loans
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A common misperception today is that a Social Security card cannot be used for identification, that it can only be used for very restricted purposes associated with the government--taxes and so forth. The reality is that in 1980 the law changed, removing the prohibition against using a Social Security card, and by extension the associated number, for identification purposes.
In today's world, certain types of financial transactions are impossible to undertake in the absence of a Social Security number. For example, a person cannot open a bank account, certain types of investment accounts, or obtain a credit card or a loan without providing a valid Social Security number.
Health Records
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Another way that you can use a Social Security number today is in regard to health care and medical services. Social Security numbers are being used by medical centers, medical practices, health clinics and health insurance companies. Health and medical records commonly are identified through the use of Social Security numbers.
Should the federal government elect to mandate the conversion of medical records to a digital format, Social Security numbers will be the identifier used for all such records. (Some segments of the medical and health care industry are moving on their own toward digital record maintenance and are using Social Security numbers to identify these materials.)
Employment
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In regard to employment, not only is the Social Security number necessary for tax purposes, you can also use a Social Security card to demonstrate to a prospective employer that you legally qualify for employment in the United States. The Social Security card is one of the types of identification that you can use as proof of employment eligibility as part of completing the I-9 form promulgated by the U.S. government to confirm a person's legal status.
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- Photo Credit Ted Johnson, Everystockphoto.com
