What Does “SSN Valid for Work Only With DHS Authorization” Mean?
Understanding the implications of an SSN valid for work only with DHS authorization, including employment, taxes, and social security credits.
Understanding the implications of an SSN valid for work only with DHS authorization, including employment, taxes, and social security credits.
Social Security numbers (SSNs) play a pivotal role in the U.S. financial and employment systems, serving as identifiers for tax purposes and determining eligibility for certain benefits. However, not all SSNs function the same; some carry specific restrictions that impact an individual’s ability to work legally.
The endorsement “Valid for Work Only With DHS Authorization” on a Social Security card signifies a restriction tied to the cardholder’s immigration status. It means the individual is authorized to work in the U.S., but only under conditions set by the Department of Homeland Security (DHS). This status often applies to non-citizens with temporary work authorization, such as visa holders or those with pending immigration applications.
Employees with this endorsement must maintain valid DHS authorization, often requiring the renewal of work permits or adherence to immigration regulations. Employers, in turn, are obligated to verify work authorization through Form I-9, which checks both the Social Security card and DHS documentation. Non-compliance with these requirements under the Immigration Reform and Control Act (IRCA) can result in penalties, including fines or legal action.
Managing wages and tax withholding for employees with Social Security cards marked “Valid for Work Only With DHS Authorization” requires precise adherence to federal and state tax guidelines. Employers must correctly calculate and withhold federal income tax, Social Security, and Medicare taxes. The Social Security tax rate is 6.2% for both employers and employees, while the Medicare tax rate is 1.45%. An additional 0.9% Medicare tax applies to employees earning above $200,000 for single filers or $250,000 for married couples filing jointly.
State income taxes vary widely. For example, California imposes a progressive income tax with rates ranging from 1% to 13.3%, while Texas has no state income tax. Employers must tailor payroll processes to meet these state-specific requirements to ensure compliance.
The E-Verify system extends the Form I-9 process, enabling employers to confirm employment eligibility through a digital platform. Managed by the Department of Homeland Security and the Social Security Administration, E-Verify cross-checks employee information, such as name, date of birth, and Social Security number, against government records.
Employers must register online and sign a Memorandum of Understanding (MOU) to use E-Verify. If discrepancies arise during verification, the system issues a Tentative Nonconfirmation (TNC), requiring the employer to notify the employee, who can contest the findings. Strict adherence to E-Verify protocols is essential to avoid penalties.
Individuals with Social Security cards marked “Valid for Work Only With DHS Authorization” are generally classified as resident aliens for tax purposes if they meet the substantial presence test. This status obligates them to report worldwide income and file IRS Form 1040. They may qualify for deductions and credits, such as the Earned Income Tax Credit (EITC), if they meet IRS criteria.
State tax obligations can be more complex due to varying residency rules and tax rates. For instance, New York considers someone a resident for tax purposes if they maintain a permanent abode and spend more than 183 days in the state. Understanding these rules is critical to ensuring compliance and avoiding penalties.
Earning Social Security credits is crucial for future benefits such as retirement, disability, or survivor benefits. Individuals with a Social Security card endorsed “Valid for Work Only With DHS Authorization” earn credits through authorized employment. In 2023, earning $1,640 in wages or self-employment income secures one credit, with a maximum of four credits per year.
Employers are responsible for accurately reporting wages to ensure employees receive proper credit, which influences their future eligibility for benefits. Keeping thorough records of wages and employment status is a legal obligation and helps employees understand how their earnings contribute to their Social Security benefits.