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Form N-600 is the application for obtaining a certificate of citizenship from U.S. Citizenship and Immigration Services if you believe that you are already, by law, a U.S. citizen. For example, if you have acquired or derived U.S. citizenship through a parent who was a U.S. citizen when you were born or who became a citizen while you had a green card, you might want to obtain a citizenship certificate to prove your status.
No one really needs to file Form N-600 -- if you are already a U.S. citizen, you are a U.S. citizen, period, with or without proof. Nevertheless, there are some very good reasons why you might want to obtain this certificate proving your citizenship, as described below.
In a number of situations, it helps immensely to be able to show proof of your U.S. citizenship; perhaps to gain entry to the U.S. (which usually, but not always, requires that you also obtain a U.S. passport); or, if you're already in the U.S., to show to Social Security in order to obtain a card and number; to show to employers in order to obtain legal work; and so forth. By submitting Form N-600, you can obtain such proof.
If you were born to U.S. citizen parents in another country, it's possible that they took the smart step of going to a U.S. consulate and obtaining what's called a "Consular Report of Birth Abroad," on State Department Form FS-240. This is considered valid proof that you are a U.S. citizen. If you already have this, you probably don't need to file Form N-600, but can proceed straight to getting a U.S. passport and other documents.
If you don't already have a record of your birth abroad, then obtaining a U.S. passport can be tricky. The laws on who can acquire or derive U.S. citizenship through their parents (or in some cases, grandparents) are quite complicated. For one thing, different laws apply depending on the date of your birth. For another, these laws have, over the years, required applicants to prove things like their parents' period of residence in the U.S., their father's legitimation if the child was born while the parents were unmarried, and more. Coming up with such proof can mean having to dig up and submit a bunch of old documents.
For a summary of what these citizenship laws require, see: "Getting U.S. Citizenship Through Birth to U.S. Citizen Parents ("Acquisition")" or "Getting Citizenship Through Parent's Naturalization ("Derivation")."
The bottom line is that USCIS is more accustomed to evaluating your documentation and deciding on your claim for U.S. citizenship than the U.S. State Department is. So if you went straight to the U.S. State Department and applied for a passport, it might get confused and deny your case. (That doesn't mean you can't try, but be warned.) So for many applicants, starting with an application on Form N-600 makes the most sense.
Not only can the person claiming U.S. citizenship fill out this form, but the U.S. citizen parent or legal guardian of biological or adopted children under 18 years of age who qualifying for citizenship can also do so on their behalf; or the immediate relative or legal guardian of an adult with a disability who qualifyies for US citizenship.
You should not, however, use Form N-600 if you are a U.S. lawful permanent resident intending to file for naturalization. The proper form for this is USCIS N-400. For more information on this path toward citizenship, see "U.S. Citizenship Through Naturalization."