When Is Your Social Security Number Really Required?

By Dawn Handschuh, Personal Finance Writer Archive

Social security number privacy

Q. What do the following activities have in common?

  •  New-car shopping
  • Applying for school
  • Investing in stocks
  • Applying for new telephone service
  • Making a bank deposit
  • Starting a new job
  • Filing for unemployment benefits

A. You’ll be asked for your Social Security number (SSN) during the transaction.

Q. Which of these doesn't actually require your SSN?

A. Applying for new telephone service.

For many who are just going about their everyday lives, requests for their SSN can multiply faster than bunnies in springtime. While SSNs are record-keeping conveniences, there’s probably no other personal identifier so highly prized by identity thieves. Widespread use of SSNs contributes to identity theft, so you should zealously guard your SSN, giving it out only when absolutely necessary.

Which groups really need it, and which do not?

Your employer
Your employer needs your SSN to report earnings and payroll taxes. The IRS uses this information to issue W-2s and 1099s.

Financial institutions
Financial institutions (banks, credit unions and brokerages) need your SSN to report earned interest to the IRS. Real estate transactions or motor vehicle purchases over $10,000 also require it.

Medicare and Medicaid
If you’re 65 or older, you’ll need to supply your SSN to receive healthcare or prescription drug benefits through these government programs.

Government agencies
Some, but not all, government agencies require your SSN. Those that do include:
• The IRS
• Welfare and unemployment offices
• State motor vehicle departments
• State taxing agencies
• State professional and occupational licensing agencies

All government agencies that request SSNs must disclose in writing whether providing your SSN is required or optional and how it'll  be used. Unless federal law requires your SSN, you can’t be denied a government benefit or service if you refuse to provide it.

Publicly-funded schools
State universities that receive federal funding will require your SSN. However, that doesn’t mean they have to use your SSN on ID cards, class rosters or grade listings. Many states already ban public universities from using SSNs as student IDs.

When a private school asks for your SSN, question the necessity. Multiple complaints often result in policy changes.