Understanding how taxes work in the United States can be very difficult, especially if you are a foreign national. It does not matter whether you want to invest, set up a business, or are looking to meet your tax obligations; the chances are you will come across something called an ITIN.
What is an ITIN? Who is eligible for it, and how do you go about applying for it? In this article, we aim to answer all of your questions regarding ITIN for foreigners, its application, and issuance.
What Is an ITIN?
The Individual Taxpayer Identification Number or ITIN is a unique identifying number that the IRS, or Internal Revenue Service, assigns for the sake of tax processing. This number is designed for those who need to file or report taxes in the United States but do not qualify for a Social Security Number.
It is beneficial to note that ITINs are always 9 digits, with the first two in the sequence being ’09’; thus, the format looks as follows: 9XX-XX-XXXX.
ITIN is:
- Cannot be used for Federal income tax return purposes.
- Does not allow you to work legally in the United States.
- Does not qualify you for Social Security benefits.
- Does not provide legal immigration status.
- Facilitates filing and reporting taxes at the Federal level.
Even with these restrictions, the ITIN serves as a useful resource for foreign individuals striving to remain compliant with the U.S. taxation system, enabling them to pay legally and meet their financial obligations.
Who Requires an ITIN?
An ITIN is needed when there is a requirement to file a return or report income from the U.S., but you do not possess a Social Security Number. Here are some categories that usually necessitate an ITIN:
- Nonresident aliens who need to submit a U.S. tax return, given the applicable provisions of the U.S. tax system.
- Foreign citizens who are physically present in the U.S. for a certain number of days, thus qualify as resident aliens and do not possess an SSN, but are filing a federal tax return.
- Foreign investors who receive income from renting out properties located in the U.S., or other types of income from investments located in the U.S.
- Spouse and dependents (including children) of U.S. citizens or resident aliens who do not qualify for a Social Security Number.
- Spouses and dependents of nonresident alien visa holders, such as F-1, J-1, and H-1B.
- Foreign nationals who own U.S. Limited Liability Companies or Corporations (LLC) and have tax returns to submit.
As a general rule, every person who has obligations for U.S. taxes but cannot obtain a Social Security Number would have to get an ITIN to properly comply with the ITIN requirements.
What Can You Use an ITIN For?
Although an ITIN does not permit employment or other immigration privileges, it outlines multiple significant purposes:
- Receiving U.S. federal tax returns: If you have any income derived from the U.S. or have any financial obligations, you need to file a tax return, and an ITIN facilitates this.
- Claiming tax treaty privileges: Certain nations have treaties with the U.S. that permit their citizens to have lower tax rates or even exclusions. Frequently, an ITIN is needed to claim these privileges.
- Opening a U.S. bank account: An ITIN is required to open checking, savings, or investment accounts for U.S.-based banks, particularly for foreign nationals living abroad.
- Various real estate deals: If you are a foreign investor acquiring properties within the U.S, ITIN helps considerably for reporting rental income or capital gains.
Moreover, the ITIN allows more participation from foreigners with reliance on the U.S. financial system, compliance, and various tax opportunities.
How to File for an ITIN
Even though it might seem hard at the start, it becomes simple with a little preparation and knowledge about the specific steps. Here is a thorough summary.
1. Fill in IRS Form W-7
The first step towards getting an ITIN involves completing Form W-7 or “Application for IRS Individual Taxpayer Identification Number”.
While filling out the form, ensure that you:
- Choose the applicable reason you are applying for.
- Enter personal details that are up to date, such as full name, mailing address, and country of citizenship.
- Double-check the information to make sure that all provided details are accurate, as discrepancies can cause delays.
Generally, Form W-7 is submitted with a taxpayer’s first tax return, except in cases where a person is eligible for an exemption, like in cases where a person is claiming a tax treaty benefit without filing a return.
2. Collect Relevant Documents
As mentioned before, along with Form W-7, you need to submit documents that validate your identity and your nationality. Typical documents include:
- A valid passport (it is preferred; it fulfills both).
- National identification card (must be recently issued and contain a photograph, name, current address, age, and an expiration date)
- U.S. visa (for individuals who legally entered the US)
- Foreign driver’s license
- Birth certificate (for dependents under the age of 18)
- United States School or medical records
Important:
- You must submit either original documents or certified copies issued by the agency that issued the document.
- Photocopies or notarized copies are not accepted unless done by the original issuing agency.
3. Submit the Application
Your ITIN application can be submitted in three ways:
Mail: the completed form W-7 alongside the tax return, if required, as well as original or certified documents, should be sent to:
Internal Revenue Service
ITIN Operations
P.O. Box 149342
Austin, TX 78714-9342
When mailing from outside the United States, it is advised to use a private courier service for safety.
Using an IRS Authorized Certifying Acceptance Agent (CAA):
The CAA may assist the applicant in completing the W-7 process, as they are permitted by the IRS. More often than not, they physically verify relevant documents and submit them to the IRS, which serves the applicant’s best interest and minimizes inconvenience.
In Person at an IRS Taxpayer Assistance Center:
For applicants currently residing in the US, visiting a specific branch of the IRS makes it possible to book an appointment for document verification without the need to send original documents.
4. Wait for Processing
The standard processing timeframe for an application is around 7–11 weeks after submission to the IRS.
These timeframes are subject to change during tax season (January to April). Also, if further details are necessary, the processing time can be longer.
Per the IRS notice, an applicant will be sent their ITIN upon approval.
Avoiding common mistakes when applying for an ITIN
Highlighting a few of the most common mistakes that can stagnate or derail your ITIN application in no particular order:
Incomplete or inaccurate Form W-7: It could be signing it and forgetting to provide a date, a mistaken date of birth, or not filling in all required fields.
Not providing original documents or certified documentation: Documents must always be either originals or certified copies, not photocopies, otherwise, they will be rendered useless.
Failing to include a federal tax return when necessary: The IRS presumes that an application for a W-7 will be accompanied by a return. So, unless you meet a condition within an exception, this is a requirement.
Submitting expired documents: Out-of-date ID cards or passports can invalidate your application.
Sending original, priceless documents via an untraceable mail service: Utilize a secure method of sending these documents or work with a CAA for reduced risk.
How Long Is An ITIN Valid
An ITIN is not valid forever without use. The IRS imposes rules on ITIN expiration:
- You do not file a tax return using the ITIN within 3 consecutive years, it expires.
- Some ITINs have expiration dates based on the issuance date, especially those issued under IRS renewal programs before 2013.
Renewing an expired ITIN involves completing Form W-7 and providing current supporting documentation.
For smooth processing without delays, check your ITIN status before tax season.
How EasyFiling Can Help You Claim Your ITIN
The entire process of applying for an ITIN can be overwhelming, especially when it comes to U.S. tax obligations. This is where EasyFiling eases your stress.
At EasyFiling, our focus is on aiding foreigners:
- Completing and reviewing Form W-7.
- Compiling the necessary identity and foreign status documents to ensure application acceptance.
- Submitting the application electronically instead of physically posting original sensitive documents.
- Guiding special circumstances like treaty benefits, real estate investments, or foreign-owned companies.
- Offering personalized assistance throughout the process so you are never left wondering what the next steps are.
Our cooperation with IRS-approved channels allows us to ensure that your ITIN application is submitted precisely to avoid wasting your effort, causing stress, or incurring expensive errors.
If you are a non-resident foreigner, investor, or even a dependent, EasyFiling serves as the trusted ally for the quick and easy ITIN processing that you seek.
➡️ Do you want to apply for an ITIN? It is easy! Call or contact EasyFiling today, and relax as we take care of the ITIN documents for you!
Conclusion
For non-citizens of the United States who have a taxation requirement or have finances in the country, an ITIN is necessary in the absence of a Social Security number.
If you are engaged in real estate investment activities, operating a U.S. business, claiming a tax treaty refund, or even abiding by IRS mandates, you can expediently comply with your legal obligations by simply having an ITIN.
The application process is quite simple with proper document preparation, even more straightforward with professional assistance, which is readily available, although meticulousness is key at every step.
Need assistance with an ITIN application?
Employing an IRS-certified acceptance agent or a reliable filing service simplifies ITIN applications by reducing errors and accelerating processing time.
Frequently Asked Questions (FAQs)
Can I apply for an ITIN online?
No. You can only apply for an ITIN in person at an IRS office, through a Certifying Acceptance Agent (CAA), or by mail. At this time, ITIN applications cannot be submitted online.
How much does it cost to get an ITIN?
When submitting Form W-7, there is no additional fee from the IRS. However, if you choose to work with a Certifying Acceptance Agent or other professional service, be aware that they may charge a fee.
How long does it take to get an ITIN?
The processing time for an ITIN is approximately 7 to 11 weeks, which tends to be longer during tax season or when there are missing documents or corrections needed.
Can I use my ITIN instead of an SSN for employment?
No. An ITIN cannot be substituted for a Social Security Number (SSN) for employment, as it is required solely for tax purposes.
What happens if I lose my ITIN letter?
If you do misplace your notice containing your ITIN, you have the option to request a copy from the IRS by calling or by completing Form 4506-T and submitting it to order your IRS records.
Swostika Silwal
