Jan 19, 2022
As we advised in Tax Tip 20-04 , significant additional disclosure and filing requirements for trusts were announced in the 2018 Federal Budget and are scheduled to apply for trust’s 2021 and subsequent tax years.
All United States persons (citizens and green card holders) are required to obtain a Social Security Number (“SSN”). This number, which stays with an individual for life, is used for all U.S. government benefits and services, including tax administration. A U.S. person should never apply for an Individual Taxpayer Identification Number (“ITIN”) through the IRS as these numbers are for U.S. Nonresident Aliens only.
An SSN is used for many purposes outside of government benefits and taxes. It is also used as an identification number for most state governments, universities, and in the private sector for things like an individual’s credit history or banking information. For this reason, the Social Security Administration is quite cautious when assigning new Social Security Numbers and advises individuals to keep their number secure at all times.
There are three types of Social Security cards issued. The first is for U.S. citizens and residents (green card holders) which entitles an individual to government benefits and to work in the US. The second type of card is issued to individuals who are admitted to the U.S. on a temporary basis and will be marked as “Valid for work only with DHS authorization.” The third type, which is marked “Not valid for employment” is for those individuals who are required to have an SSN but are not authorized to work in the U.S.
Applications for a new Social Security Number or a replacement card can only be made in person at a Social Security Administration office. There are no Social Security offices in Canada, but there are specific offices in the U.S. that are designated to assist Canadian residents. A list of these offices can be found on the Social Security website at www.ssa.gov/foreign/canada.htm. The office closest to the GTA is in Niagara Falls, New York.
Individuals are encouraged to check the Social Security Administration website or call the local office before visiting to determine what documentation will be required. Generally proof of citizenship and other identifying information will be required. In addition, for adult individuals who are U.S. citizens and who are applying for a new Social Security Number, they will be required to provide documentation supporting their foreign residency. Several of our clients have reported that this documentation requirement has included obtaining school and employment records for the entire period they were resident outside of the United States. It can be quite a challenge to collect all this information, so best to check first before a trip to the office is made.
After an SSN is obtained, it is important to keep your information up-to-date. Name changes must be made directly with the Social Security Administration and cannot be made by individual government agencies (such as the IRS). Your address should also be regularly updated to make sure that all communication is reaching you.
U.S. TAX TIP is provided as a free service to clients and friends of Cadesky U.S. Tax.
The material provided in this U.S. Tax Tip is believed to be accurate and reliable as of the date of posting. Tax laws are complex and are subject to frequent change. Professional advice should always be sought before implementing any tax planning arrangements. Neither Cadesky Tax nor Cadesky U.S. Tax can accept any liability for the tax consequences that may result from acting based on the contents hereof.