Why do employers need social security number?

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Discover why do employers need social security number and every other thing you need to about the social security number.

Although it may seem like a series of random numbers that you were given at birth, your Social Security number is necessary for some pretty big steps in life. Applying for loans, credit cards, utilities, job applications, and getting paid, to name a few.

For employers, having accurate Social Security numbers for all of their employees is critical.

A W-2 form is used to report an employee’s earnings history. This is the basis for determining the individual’s future eligibility and benefit amount for the Social Security retirement, disability, and survivors programs.

The APA goes on to say that about 10 percent of these Forms W-2 have mismatched names and SSNs.

Recently, the SSA began sending notifications by mail to companies and third parties who submitted Forms W-2 that contain names and SSNs that do not match. A growing number of government agencies at the federal, state, and local levels are even rejecting tax and wage returns that contain invalid or missing SSNs. As you can imagine, that creates a huge barrier to timely and compliant filing.

Fortunately, there are many steps you can take and tools you can use to ensure complete accuracy when it comes to your employees’ SSNs.

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But first, let’s go back to the beginning. Have you ever wondered who got the first SSN? Who came up with these numbers? How are social security numbers assigned? History lessons are fun, I promise.

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The Social Security Board did not have field offices in late 1936, so it contracted with the United States Postal Service to distribute and assign the first batch of SSNs. Of the 45,000 local post offices nationwide, 1,074 of them were also designated as “typing centers” where the cards were prepared.

According to the SSA, the procedure for issuing the first SSNs worked like this: Post offices had to distribute SS-4 application forms to employers. The forms would have employers indicate how many employees they had on staff.

Then, using that data, the post offices provided each employee with an SS-5 form (on which the assignment of an SSN was based). Once the forms were completed, they were returned to the post office where an SSN would be assigned. SSA records indicate that the first SSN was issued in mid-November 1936.

Master records were created in Baltimore in December 1936. The first block of 1,000 records was assembled into a large pile. When the man in charge of accounting was ready to process this pile, he pulled out the top record and declared it to be the first official Social Security record. So it is not exactly the first SSN, since it is impossible to identify the first card that was written in those typing centers, but it is still an interesting fact.

That first album? It belonged to John D. Sweeney, Jr., 23 at the time, of New Rochelle, New York. It turns out he was the son of a wealthy factory owner and was working as a shipping clerk for his father when he completed his application for a Social Security card. The SSA even has your photo posted online!

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SSA explains that SSNs were grouped by the first three digits of the number (area number) and assigned geographically, starting in the northeast and moving northwest. Interestingly, if you look at the distribution pattern, the lower area numbers are assigned to New Hampshire, rather than Maine (although Maine is the most northeastern state).

This was done so that the lower SSN, 001-01-0001, could be turned over to the Chairman of the Social Security Board, who was also a three-time governor of New Hampshire. He declined the number and offered it to someone else who also declined.

That little piece of paper we’ve all come to recognize was designed by Fred Happel of Albany, New York, in 1936. Happel designed the famous “Flying Tigers” logo used by General Chennault’s forces during World War II. They paid him only $60 for his work on his Social Security card.

The SSA has a lot of interesting stories about SSNs right on their history page. Now to the important things you need to know for compliance today, and SSN compliance for employer. Continue reading!

SSN randomization is the method the SSA implemented in 2011 that prevents you from being left without an SSN and helps protect against identity theft.

Employers often ask to see an employee’s Social Security card. Internal Revenue Service Publication 15 (Circular E), Employer’s Tax Guide, says: “You should ask your employee to show you their social security card. The employee can show the card if it is available. “But do you need to see the card? While it is not a requirement, the SSA provides a service for employers to verify a name and SSN for wage reporting purposes when you want to have one. additional security of the correct name and SSN of an employee.

Since 1936, Social Security has issued more than 30 different versions of the Social Security Number (SSN) card, making it difficult to recognize a valid card. Sometimes when you ask an employee to show you their card, the card is not available. In either case, you don’t need to send them to a local Social Security office. Consider using the free Social Security Number Verification Service (SSNVS) that allows registered employers to quickly verify if a person’s name and SSN match Social Security records. Saves time for you and the employee.

You need the social security numbers of your employees. Employers are one of the few organizations that need social security numbers as you have to pay employees, withhold taxes, and pay taxes. You must have it.

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But you don’t have to have the social security number of the job applicants. You don’t need it at the application stage. However, many companies request it at the application stage.