When is a Social Security Number required in the USA

EXPAT LIFE: For most new expats arriving in the USA, getting a Social Security Number (SSN) is usually a big priority. Even when they are eligible, it can often take up to one month or more before new expats receive their SSN.

Unfortunately during those first 4-6 weeks, there are many settling in tasks to do which often result in a request for a SSN, when they are not always available yet. Things like opening a bank account, getting a driver license, renting or purchasing a home or even enrolling the kids at their new school. Then there are temporary visitors who are just not eligible for a SSN. How will they get by? This raises the question of when is a social security number required?

Before even deciding whether you will try and apply for a SSN, it’s a good idea to understand when a Social Security Number is needed and why.

What is a Social Security Number?

The Social Security Administration (SSA) is a US federal government agency tasked with administering a range of social welfare and insurance programs – things like unemployment benefits and retiree payments. They are also the agency that administers every Social Security Number provided to citizens and visiting aliens. The SSN is a unique identifier number generated by this agency that is used as a form of individual identification for taxation purposes.

SSNs are used to report wages to the US government and to determine eligibility for Social Security benefits. While the Social Security Administration don’t  look after taxation (that’s the IRS), they provide new SSNs and replace missing or incorrect SSN cards. The Social Security Number provided to you stays the same during your entire life span – it is unique to you.

Even though it wasn’t originally intended to be a national ID system, the SSN is now used as that by banks, employers, insurance companies, educational institutions as well as retailers and other merchants. Though it is not required by everybody who visits the USA, it is a useful form of identification that is widely recognized. A Social Security Number seems to carry more weight, as a form of ID, than many other secondary ID forms.

Having an SSN makes life easier in the USA, in many ways. This seems particularly true if you also have no credit history in the USA, as applies to most new expats. If you are eligible to apply for a SSN, then you should go through the process to obtain one. Some L2 expats are tempted not to bother obtaining one because they are not intending to work. It is more of a problem not having one than the small amount of time used to apply, and is definitely worth it.

Which Expats Qualify for a Social Security Number?

Immigrants who are moving to the US permanently with a green card, can apply for a SSN at the time of immigration application submission or later once they have arrived.

Social Security Numbers however, are not given to everybody who visits the US temporarily.

Holders of an L1 visa, their L2 spouses, and H1B visa holders do fortunately qualify to apply for this benefit. Other visa holders who may be eligible for a SSN include temporary visitors with a O-1 visa, students who have an F-1 or M-1 visa or J-1 or J-2 exchange visitors. Most other temporary visitors don’t qualify for a SSN unless there are particular circumstances where a SSN is needed e.g. the visa holder will be working and receiving remuneration or will be claiming Social Security benefits.

Non-citizen children do not need a SSN nor do they qualify for one if they are temporary visitors. This holds even when their parents are eligible for a SSN such as an L-1 or L-2 visa holder. In the case of non-citizen children, for taxation purposes, the IRS use ITIN numbers for dependents. An ITIN stands for Individual Taxation Identification Number. Children born in the US do usually qualify for a SSN.

When is a Social Security Number Required in the USA 

Social security numbers are often requested by organizations besides the IRS but in reality they are only needed in a limited but nonetheless, important list of situations, such as:

• Earning a wage
• Opening a business (W-9 form is needed by the IRS)
• Enrolling in a pension fund
• Enrolling in a health insurance fund
• Getting a mortgage* (please see below*: only a very limited number of lenders will not require a SSN)

These are all situations where a SSN is needed for tracking income and taxation and mostly will be required by regulation as part of any following financial transactions.

What Social Security Numbers Are Not Required

Fortunately you do not need a Social Security card for everything. A number of things can be done without one, although in some cases, it will be less easy with no SSN. You do not need a SSN for the following:

• Enrolling your children in school
• Applying for a work authorization permit (EAD)
• Applying for a job [you need to be authorized by USCIS to work beforehand]
• Organizing a car lease
• Leasing a rental property
• Purchasing a property
• Getting a mortgage [very limited loans available without a SSN]
• Getting utility accounts set up for your new home
• Getting a mobile phone plan or contract
• Getting a US driver license*[only applies to people ineligible to get a SSN]
• Opening a US bank account [a limited number of banks don’t require a SSN]

What if they Ask for a SSN?

Despite what people may fear, it is possible to get a rental property lease without a SSN. But if you do not have one, then they will want proof that you are going to be able to pay monthly rent obligations. This requires usually a letter or formal job offer document, showing salary and bonus package and length of job term. Without this, it will be very challenging to get landlord or credit approval.

The same applies to leasing a car. It is possible without a SSN but you need to prove you can meet your financial obligations.

Getting a mortgage* may be technically possible without a SSN. There are special types of loans made for foreign nationals but the loan offers will probably be far less attractive than what is possible with a SSN and not easy to find. It is likely that you will be asked however for an ITIN to track taxation, which is available to all people who do not qualify for a SSN. Most lenders in the USA do require foreign nationals to have a SSN.

While generally they will ask for your SSN if opening a utility account e.g. cable TV or electricity, the utility provider can open the account without it. It may be a bit more complicated but you can actually do it.

The same applies for getting a mobile phone plan. While in most cases they will give you a plan, they may ask for a limited-term security deposit to overcome the ‘credit risk’ of not having an SSN.

There are at least three banks who will open a bank account without a SSN. This includes Bank of America, Wells Fargo and HSBC (a good option for expats).

Having a SSN would make the process quicker and easier or make more options available possibly in these cases but it is possible to get by without it.

In other cases, you may just get asked for a SSN as part of a total information package gathered about you, together with name, address etc. In non-financial situations, often this is optional. If in doubt, never pass on your number. You will be told if it is required by law but in most cases it is not.

Driver’s Licenses and Credit checks

Possibly the main two reasons people get concerned about not having a SSN, is that these are requested for obtaining a Driver License in many states, including NJ and credit checks done on any financial purchase. The SSA will not issue a SSN for either of these reasons. The SSN will only be provided to people who are eligible as explained above.

Driver License: It is possible to get a NJ Driver license without a SSN but only if you are not entitled to one. If you are in this position, you will need to prove that you are not qualified for a SSN when you go to the NJ MVC (DMV). This can be done by getting a ‘letter of denial’ beforehand from the SSA office. All non-citizens who qualify for a SSN must provide it to get a NJ driver license.

Credit checks: These can be done without a SSN, it is just easier to do them with one. What may occur however, is a refusal for the financial transaction e.g. getting approval for a store card or a bank’s unsecured credit card. This is because they deem having no SSN as a credit risk in itself because there is no obvious income being earned (otherwise you would probably have a SSN).

Getting any credit-based financing in the US without a SSN is usually difficult from standard financial institutions such as banks who follow very similar procedures. If you are going to obtain a SSN later, then perhaps put off important transactions until you have this in hand e.g. getting a car lease. Here, having a SSN would probably get you more favorable terms versus no SSN.

 Why Do So Many Places Ask for a SSN?

Aside from regulations governing the tracking of income/tax or monitoring for benefit eligibility, the SSN is the primary way it seems that you are tracked as an identity. Banks, insurance companies and a wide range of other ‘financial’ entities are required by federal law to track money movements to prevent financing of terrorist operations and money laundering. These organizations are required to gather a minimum amount of identity information (a Customer Identification Program) that includes at least one type of identification number. For most individuals, this will be a SSN.

The main takeout from this is that a SSN is being asked for more frequently than ever. If you do not have one then this should not be an issue but if you do, be very careful about who and how you share this information. It is easy to see how gaining a SSN by theft is the first step in stealing someone else’s identity, which itself is a bigger problem than ever. Always try and avoid sharing unless it is absolutely necessary.

In future articles, we will cover more aspects of Social Security Numbers and how to obtain them.

Are there any places you have been asked for your SS Number that surprised you?