What is Individual Taxpayer Identification Number (ITIN) ?
The Individual Taxpayer Identification Number (ITIN) is a nine-digit tax processing number issued by the Internal Revenue Service (IRS) to individuals who are required to have a U.S. taxpayer identification number but who are not eligible to obtain a Social Security Number (SSN). ITINs are primarily used for federal tax reporting purposes and are issued regardless of immigration status, as both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code.
Individuals who need an ITIN include nonresident aliens required to file a U.S. tax return, U.S. resident aliens filing a tax return, and dependents or spouses of U.S. citizens/residents who need to be claimed for tax purposes but do not qualify for an SSN. To apply for an ITIN, individuals must complete IRS Form W-7 and submit it along with required documentation to the IRS. Documentation requirements vary depending on the reason for needing an individual taxpayer identification number and may include original or certified copies of identification documents such as passports or birth certificates.
Once issued, the ITIN is used to file taxes, claim dependents, and comply with other IRS reporting requirements. It is important to note that ITINs do not confer immigration status or work authorization, nor do they make individuals eligible for Social Security benefits. However, they serve a vital role in enabling individuals who are not eligible for SSNs to fulfill their tax obligations and access certain benefits and services in the United States.
Who Needs an ITIN ?
Here's a concise list of who typically needs an Individual Taxpayer Identification Number:
1) Nonresident Aliens: Nonresident aliens who are engaged in a trade or business in the U.S. and are required to file a U.S. tax return need an ITIN. This includes individuals who earn income in the U.S. but are not eligible for a Social Security Number (SSN).
2) Resident Aliens: Resident aliens who are required to file a U.S. tax return but are not eligible for an SSN also need an ITIN. This can include individuals who are residing in the U.S. on a visa or green card but have not qualified for an SSN.
3) Dependents or Spouses: Dependents or spouses of U.S. citizens or resident aliens who need to be claimed for tax purposes but do not qualify for an SSN need an ITIN. This allows them to be included on a joint tax return or claimed as dependents for tax purposes.
4) Foreign Investors: Foreign investors who invest in U.S. businesses or properties and are subject to U.S. tax reporting requirements may need an ITIN to comply with tax laws.
5) Other Tax Purposes: In some cases, individuals may need an ITIN for reasons other than filing a tax return, such as claiming tax treaty benefits or receiving certain types of income subject to withholding.
What is an Individual Taxpayer Identification Number used for ?
An Individual ITIN is used for following purpose:
- Filing federal tax returns for individuals who are not eligible for a Social Security Number.
- Claiming dependents on tax returns.
- Complying with IRS reporting requirements.
- Applying for certain tax benefits and credits.
- Opening a U.S. bank account or applying for a mortgage.
- Conducting other tax-related transactions and activities requiring identification.
What Documents are Required to Apply for an ITIN ?
To apply for an Individual Taxpayer Identification Number, you typically need to provide the following documents:
- Completed IRS Form W-7, Application for IRS Individual Taxpayer Identification Number.
- Original or certified copies of documents verifying your identity and foreign status. Acceptable documents include:
- Passport (the preferred document for identity verification).
- National identification card (must show your name, photograph, address, date of birth, and expiration date).
- U.S. Citizenship and Immigration Services (USCIS) photo identification.
- Birth certificate (required for dependents under 18).
- Foreign driver's license.
- Visa issued by the U.S. Department of State.
- U.S. military identification card.
- Foreign voter registration card.
- Medical records (only if under age 6).
- School records (only if under age 18, and if a student is enrolled in school).
- Supporting documentation if you're claiming a tax treaty benefit.
Make sure to review the specific requirements outlined in the instructions for Form W-7, as they may vary depending on your individual circumstances and reason for applying for an ITIN.
How to Get Individual Taxpayer Identification Number ?
Obtaining an Individual ITIN involves a few steps. Here's a general guide on how to get one:
2) Complete Form W-7: Obtain Form W-7, Application for IRS Individual Taxpayer Identification Number. You can find this form on the IRS website or request it by calling the IRS toll-free number.
3) Gather Required Documents: Depending on your circumstances, you'll need to provide original or certified copies of documents that prove your identity and foreign status. The IRS provides a list of acceptable documents in the instructions for Form W-7.
4) Complete the Application: Fill out Form W-7 carefully, ensuring that all information is accurate and complete. Be sure to check the appropriate reason for applying for an ITIN and include all required attachments.
5) Submit the Application: Once you've completed Form W-7 and gathered your supporting documents, you can submit your application by mail or in person. If mailing your application, send it to the address listed in the instructions for Form W-7. If applying in person, you can make an appointment at an IRS Taxpayer Assistance Center.
6) Wait for Processing: It typically takes about 7 to 11 weeks for the IRS to process Form W-7 and issue an ITIN. You can check the status of your application online or by calling the IRS.
7) Receive Your ITIN: Once your application is approved, the IRS will issue you an ITIN in the form of a nine-digit number. You'll receive a letter from the IRS with your assigned ITIN.
Remember to keep your ITIN safe and use it whenever you need to file taxes, claim dependents, or conduct other tax-related activities with the IRS.
What to do if ITIN is Lost or Expired ?
Here are the steps to take if your Individual Taxpayer Identification Number is lost or expired:
- Check previous tax documents or correspondence from the IRS where your ITIN may be listed.
- Contact the IRS by calling 1-800-829-1040 to inform them of the lost or expired ITIN.
- Request a replacement or renewal by completing Form W-7, Application for IRS Individual Taxpayer Identification Number.
- Gather necessary documents to prove your identity and foreign status, similar to the initial application process.
- Submit the completed Form W-7 and required documents by mail or in person at an IRS Taxpayer Assistance Center.
- Follow up with the IRS to check the status of your replacement or renewal application.
- Once approved, receive your replacement or renewed ITIN along with a letter from the IRS containing the new ITIN.
FAQ's
How long does it take to get an ITIN?
It typically takes about 7 to 11 weeks for the IRS to process Form W-7 and issue an ITIN. However, processing times may vary depending on the volume of applications received by the IRS.
Can I use an ITIN to work in the United States?
No, an ITIN does not provide work authorization in the United States. It is solely for tax reporting purposes and does not confer immigration status or work authorization.
Do ITINs expire?
Yes, ITINs may expire if they are not used on a federal tax return for three consecutive years. The IRS periodically deactivates unused ITINs to ensure the integrity of the tax system. If your ITIN is deactivated, you'll need to reapply for a new one if you have a filing requirement.
Can I use an ITIN instead of a Social Security Number for all purposes?
No, an ITIN is specifically for federal tax reporting purposes. While it can be used to file taxes, claim dependents, and comply with other IRS reporting requirements, it does not replace an SSN for other purposes such as employment, eligibility for Social Security benefits, or obtaining certain government services.
Where to find Individual Taxpayer Identification Number?
You can find your Individual Taxpayer Identification Number on IRS correspondence, such as previous tax returns or notices, or by contacting the IRS directly.
How do I apply for an ITIN?
To apply for an ITIN, you need to complete IRS Form W-7, Application for IRS Individual Taxpayer Identification Number, and submit it along with required documentation proving your identity and foreign status. You can submit your application by mail or in person at an IRS Taxpayer Assistance Center.