If you are an employer, you require all of your employees to have a social security number. However, if you hire someone who hasn’t applied for social security yet, they cannot provide you with a social security number.
Paying an employee without a Social Security Number (SSN) in the United States can be a bit complex due to tax and legal requirements. However, with a little bit of knowledge and the right tools, it can be easier than you think. Read on to learn more about how to pay an employee without a social security number.
Apply for an Individual Taxpayer Identification Number (ITIN)
In order to pay an employee without a social security number, it is necessary to apply for an Individual Taxpayer Identification Number (ITIN) from the Internal Revenue Service (IRS). The ITIN is a 9-digit identification number that is issued by the IRS to individuals who are not eligible to receive a social security number.
To obtain an ITIN, the employee must complete a W-7 form and provide valid identification documents. This may include a passport, birth certificate, or driver’s license. Once the ITIN has been successfully obtained, the employee can use it to finance employee payroll taxes and verify their identity in the US.
In addition, the employee can use their ITIN to open a bank account to receive their wages. Having an ITIN is a great way to demonstrate that an employee is able to legally work in the US. It can be a very useful tool for employers.
Complete the W-4 and I-9 Forms
To ensure proper compensation, employers must complete the employee’s W-4 Form. This is typically filled out at the start of employment. Though the form includes a line for a Social Security number, employers should enter all zeroes instead.
Completing the form accurately is important to ensure proper federal, state, and local payroll-related tax deductions and the withholding of payroll taxes. Additionally, the employee should submit the correct Form I-9 for new hires. This proves they are legally authorized to work in the country.
The I-9 form should also be properly completed. Copies should be kept for the employer’s records. Finally, employers may send employee earnings and payment information to the IRS without a Social Security number using an EIN or Employer Identification Number.
File a W-2 Form
After their ITIN has been issued, you must file a W-2 form to report wages and taxes withheld for all employees that you pay, regardless of their status. You must provide a copy to the employee as well.
Employers must still pay state and federal taxes, though employees will not pay Social Security or Medicare. Following this process will ensure that employees are properly paid and the business remains compliant with tax laws. When in doubt, seek a payroll service that can manage payroll and business accounting for you.
Know How to Pay an Employee Without a Social Security Number
The process for how to pay an employee without a social security number is both easy and stress-free. Just remember to document all the necessary forms and information, and make sure all are consistent and accurate when writing a paycheck.
To ensure the process is compliant and to avoid any compliance issues when filing taxes, it’s important to work closely with the IRS for guidance. For more help with the payroll process, contact qualified payroll services for assistance.
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