Why Employers need your Social Security Number
When applying for a job, every applicant is asked to provide their tax ID number. This is most commonly known as a social security number (SSN). While many years ago, most people did not need a social security number until they were considering applying for their first job (usually in their late teens) today, all children who are claimed as dependents on a parents tax return need them today.Accurate reportingWhen being hired for a job, there are certain tax deductions that will be taken out of each paycheck. These amounts include state income tax, federal income tax, Medicare tax and social security. In some states, there may also be taxes taken out for counties or cities as well. When these amounts are taken out, they are credited to the employees SSN when they are reported to the taxing authority. This will help provide:A) W-2 form at year end - Each employer will file a form W-2 at the end of the year (or by the deadline of January 31) for each person whom they employed. These forms show the employers name, address and their EIN (employer identification number) as well as the employees name, address and SSN. These forms are necessary for filing state and federal tax forms and for determining the amount of underpayment(s) or overpayment(s) for these taxes.B) Social Security - Employees pay a portion of their income towards their potential benefits from Social Security. In order for the amounts paid in to be credited to the proper taxpayer, the employer submits their reports with the employee name and amount that is to be credited. Without an accurate taxpayer ID number, this recording would be impossible.C) Work credentials - There is a little known system that helps scan social security numbers to help protect workers from potential identity thieves. Names and social security numbers are matched up through the system and employers are notified of any irregularities. For example, an employer may be notified that the name and social security number may not match. This means the employer must contact the employee to verify the number. ID theft is not the only thing that this does, it also helps ensure that only those legally able to accept jobs get them and that tax accounts are credited properly.Many employees were not required to obtain their social security numbers until such time as they secured their first employment. Today however, the government requires parents to obtain these numbers as soon as possible to enable them to claim a child as a dependent on taxes. There is an important distinction between employee tax id numbers (more commonly known as EINs) and an employee tax ID number. While they both are required, the use of each is significantly different.
