The Social Security Number (SSN) is a taxpayer identification number (TIN) issued by the Social Security Administration (SSA). The SSA issues an SSN to U.S. citizens, permanent residents, and other temporary residents working inside the United States.
The SSN was initially assigned so the SSA could track an individual’s earnings, payroll taxes paid, and number of years worked. The SSA tracks this information from Form W-2 (Wage and Tax Statement) and Schedule SE (Self-Employment Tax). This information is necessary to determine an individual’s eligibility for social security benefits when they retire and how much benefits they will receive.
The SSN is now used for various purposes to identify U.S. individuals. It is used as a TIN to file federal and state income tax returns, open bank accounts, sign up for credit cards, access personal credit reports, and report payroll taxes.
The SSN is a nine-digit number with the following format (999-99-9999). An individual can apply for an SSN on Form SS-5 (Social Security Card).
The SSN should not be confused with the Individual Taxpayer Identification Number (ITIN). Although both numbers have the same format, the Internal Revenue Service (IRS) is responsible for issuing an ITIN to nonresidents of the U.S.
Nonresidents often need an ITIN when they have U.S.-source income subject to federal and state income taxes. They need a valid ITIN to file Form 1040-NR (US Nonresident Alien Income Tax Return), otherwise the IRS will not process their income tax return.