When you begin researching how to live, work, or do business in the United States, sooner or later you will come across the Social Security Administration and the well-known acronym: SSN (Social Security Number). Understanding what this institution does and how it affects you is key to making good decisions, avoiding mistakes, and protecting your financial future in the country.

In this article, we explain in plain language what the Social Security Administration is, how it works, which programs it manages, and why it is relevant even if your main goal is to start a business in the United States.

What Is the Social Security Administration?

The Social Security Administration (SSA) is an independent agency of the U.S. federal government responsible for administering the Social Security system — a social insurance program that includes retirement, disability, and survivors benefits, as well as coordinating economic support programs for people with limited resources.

It is the largest government program in the country: every year it manages a massive volume of benefits for tens of millions of people who have contributed throughout their working life or qualify due to financial need.

The Social Security Administration:

• Assigns and manages Social Security Numbers (SSNs)
• Keeps records of reported wages
• Calculates and pays retirement, disability, and survivors benefits
• Administers supplemental assistance programs for specific groups
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What Does the Social Security Administration Actually Do?

Although from the outside it may seem like an abstract institution, the Social Security Administration plays a major role in the daily life of anyone who lives and works in the United States.

Assignment of the Social Security Number (SSN)

The SSN is much more than a number—it’s the basic identifier for working, paying taxes, contributing to Social Security, and accessing many services in the U.S.

The Social Security Administration is responsible for:

• Assigning SSNs to citizens, permanent residents, and certain non-residents authorized to work.
• Issuing new or replacement Social Security cards.
• Keeping a lifetime record of the wages associated with each number.

Without an SSN, working legally is extremely difficult, and you also don’t accumulate the credits needed for future retirement or disability benefits.

Retirement, survivors, and disability benefits

The Social Security Administration manages a social insurance program that covers three key situations:

• Retirement: when you reach retirement age and have contributed long enough.
• Survivors: benefits for spouses, children, or certain dependents of a deceased worker.
• Disability: financial protection for people who can’t continue working due to a medical condition that meets specific criteria.

Benefit amounts depend on how much you’ve paid into the system, how many years you’ve worked in jobs covered by Social Security, and the age at which you claim benefits.

Economic support programs (SSI and similar)

In addition to contributory benefits, the Social Security Administration also manages financial assistance programs for:

• People aged 65 and older,
• People who are blind,
• People with disabilities

who have limited income and resources. Unlike regular retirement or disability benefits, these programs are funded by general federal revenue, not payroll contributions.

Connection to Medicare

Although Medicare is administered by a different agency, the Social Security Administration is often the entry point: many Medicare applications and eligibility processes are handled through SSA, especially for people who are already receiving retirement or disability benefits.

Why the Social Security Administration Matters for You as an Immigrant or Entrepreneur

You may primarily want to open a business, invoice U.S. clients, or optimize your taxes — yet the SSA still affects you in several ways.

1) Work and Contributions if You Become a U.S. Resident

If at any point you:

• Work as an employee in the U.S.
• Are both owner and employee of your own company
• Or live in the U.S. while generating income

You will need an SSN, and part of your payroll taxes will fund Social Security.

These contributions create:

• Retirement credits
• Disability protection
• Possible benefits for your spouse and children

2) Hiring Employees in Your U.S. Company

If your U.S. company hires workers, the SSA becomes relevant because:

• You must withhold and pay Social Security and Medicare taxes
• The reported wages determine each worker’s future benefits

This is about more than “payroll”: it impacts the long-term financial security of your team.

3) Key Difference: SSA vs. IRS

Many people confuse them, but they are not the same:

• SSA manages benefits and social insurance
• IRS collects federal taxes

They are connected because payroll taxes and reported income form the basis of your contribution history, but each institution serves different functions. Understanding this is essential when organizing your company’s tax and administrative structure.
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Common Mistakes Related to the Social Security Administration

When planning your landing in the United States —as an individual or as a business— it’s easy to run into one of the following mistakes:

• Thinking you don’t need an SSN because “you’ll only have a company”
  If at any point you will live in the U.S., receive a salary, or contribute as a self-employed worker, your relationship with the Social Security Administration is direct.
• Ignoring letters or notices
  If you receive official communications, it’s important to review them and, if you don’t understand the content, seek help. Many times they announce verifications, data updates, or benefit decisions.
• Believing that any type of income counts the same for Social Security
  Not all activity is reported the same way: invoicing from a foreign country is not the same as receiving a salary from a U.S. company. The way you structure your business changes your relationship with the Social Security Administration.
• Mixing personal and corporate obligations
  Your personal benefits depend on your contribution history; your company’s obligations depend on how it is structured and whom it hires. Confusing these two levels can lead to compliance mistakes.

How the Social Security Administration Interacts With Your U.S. Business

Although the Social Security Administration does not “create businesses” or approve corporate structures, its system influences how you operate if you have a real presence in the United States.

Some key points:

• If your company has employees in the U.S., it must withhold and contribute Social Security taxes for every eligible salary.
• If you yourself are an employee of your company (for example, in a corporation that pays you through payroll), those contributions count toward your Social Security record.
• If you only invoice from outside the U.S. with no presence or employees in the country, your relationship with the Social Security Administration is different and will depend on whether you personally have tax residency or work activity within U.S. territory.

That’s why it is so important for your U.S. business structure to be designed not only with taxes in mind, but also considering:

• Your life plans (whether you intend to live there or not).
• Whether you will have locally hired staff.
• How you want your working years to count toward retirement and disability protection.

When It Makes Sense to Seek Professional Help

Social Security rules, combined with federal and state tax regulations, can be complex—especially if you are coming from another country and want to:

• Maintain business operations both in your home country and in the United States at the same time.
• Create a structure that includes partners inside and outside the U.S.
• Hire local talent without making mistakes in payroll and contributions.

In these scenarios, the smartest approach is to rely on professionals who understand both the corporate side and the tax and administrative aspects of the U.S. system. This includes knowing when you fall under the Social Security Administration’s radar, when you fall under the IRS, and how both worlds connect.
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Frequently Asked Questions About the Social Security Administration

Is the Social Security Administration the same as the IRS?

No. The Social Security Administration manages retirement, disability, survivor benefits, and certain economic assistance programs.
The IRS administers the collection of federal taxes.
They intersect because payroll contributions and reported income feed into your Social Security record, but they are completely different agencies with different functions.

Can I receive Social Security benefits if I am not a U.S. citizen?

In some cases, yes. What matters is not only citizenship, but:

• Your immigration status,
• How many years you have contributed in jobs covered by Social Security,
• And whether you meet the requirements for each type of benefit.

Some permanent residents or individuals with a legal work history in the U.S. may qualify for benefits, but each case must be evaluated individually.

What happens if I work without an SSN or without reporting income?

Working without an SSN, using false information, or failing to report income can lead to serious consequences:

• Immigration issues,
• Tax penalties,
• And those years will not count toward your Social Security record, meaning you lose future retirement or disability protection.

Does my company outside the United States have obligations to the Social Security Administration?

Not necessarily. Your relationship with the Social Security Administration depends on whether there is:

• Covered employment taking place within the United States,
• Payroll paid to individuals working in the U.S.,
• Or an employment relationship subject to Social Security contributions.

If you only sell to U.S. clients from abroad, without physical presence or employees in the U.S., your obligations will differ from those of a company with local operations.

How can I protect my information from scams using the name of the Social Security Administration?

Scams impersonating the Social Security Administration are common. Basic safety recommendations include:

• Being suspicious of calls threatening arrest or immediate penalties,
• Never sharing your SSN over the phone or by email with unknown contacts,
• Always verifying information through SSA’s official channels.

If you’re unsure, it’s best to double-check with official sources before sharing any personal data.

Do you want to operate in the U.S. with legal and tax security? Openbiz can help you

Understanding the role of the Social Security Administration is only one piece of the puzzle. If you want to create a business in the United States, work with clients there, or combine your international project with a real presence in the country, you need a clear structure aligned with your personal situation, your business plan, and your obligations before the authorities.

At Openbiz, we help you:

• Define the right type of company for your case,
• Organize the administrative and tax aspects so everything is in order from the beginning,
• Understand how your business structure connects with Social Security, taxes, and regulatory compliance in the United States.

If you’re ready to take the next step and want expert support, contact us and we’ll review your case in detail to help you build your U.S. project with peace of mind and professional backing.