Compliance
ITINs Assigned to Employees Who Do Not Have Social Security Numbers
Q: Are Social Security Numbers required for employment?
A:No. According to the Internal Revenue Service (IRS), no federal law prohibits an employer from hiring a candidate without a Social Security Number (SSN), assuming the required I-9 documentation has been provided. Further, the new form I-9 only requires an employee to provide a SSN on a voluntary basis.
Here's what employers should know: The IRS requires employers to report wages using a SSN or an Individual Taxpayer Identification Number (ITIN). An ITIN is assigned to an individual who does not have and who is not eligible for a SSN. ITINs are nine-digit numbers that always begin with the number “9” and should never be used by employers as evidence of work authorization.
While the IRS does not specifically prohibit an employer from submitting a W-2 with an ITIN, it's important to know that the employee's W-2 will be placed in the Social Security Administration's (SSA) Earnings Suspense File and the employee will not get credit for Social Security benefits. Also, the SSA will issue a no-match letter to the employer. Lastly, the SSA eventually provides some of the no-match information to immigration enforcement agencies, which could eventually lead to an audit.
Employers are directed by the SSA to inform employees they are required to apply for a SSN and to do so as quickly as possible. The SSA web site includes instructions for indicating the lack of a SSN on the W-2 and for correcting a W-2 if a SSN is received after the W-2 has been filed.
Article by Regan Halvorsen, SPHR, is an HR knowledge advisor in SHRM's HR Knowledge Center from http://www.shrm.org/kc/solutions/articles/archives/CMS_024629.asp#P-8_0