For those who must comply with U.S. tax rules but are not qualified for a Social Security Number (SSN), the Individual Taxpayer Identification Number (ITIN) is an essential identification tool. Let’s take a closer look at the ITIN Number, including its goals, how to apply, its restrictions, and how to fill out the required paperwork.
What is an ITIN Number?
An ITIN, or Individual Taxpayer Identification Number, is a tax processing number issued by the Internal Revenue Service (IRS) in the United States. It’s a nine-digit number that always starts with the number 9 and is used by individuals who are required to file a federal tax return but do not have and are not eligible to obtain, a Social Security Number (SSN).
ITIN number enable the IRS to efficiently process and account for tax returns and payments for those not eligible for SSNs, thereby ensuring compliance with U.S. tax laws. ITINs are issued regardless of immigration status because both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code.
What is the purpose of ITIN Number?
The main goal of the ITIN number is to make filing and processing tax returns easier for those without Social Security numbers (SSNs) who must pay taxes in the United States. This covers foreign nationals who are residents or not, as well as their spouses and dependents. To ensure adherence to US tax rules and regulations, ITINs are necessary.
Filing Federal Tax Returns: Individuals need an ITIN to file their federal tax returns.
Tax Withholding: Employers may require an ITIN to process tax withholdings for employees who do not have an SSN.
Claiming Tax Treaty Benefits: Foreign nationals may need an ITIN to claim tax treaty benefits.
Opening a Bank Account: Some banks accept ITINs as a form of identification to open accounts.
How to Apply for an ITIN Number:
Step 1: Obtain Form W-7
Acquire Form W-7 People must fill out IRS Form W-7, Application for IRS Individual Taxpayer Identification Number, in order to apply for an ITIN. The IRS website, local IRS offices, and the IRS toll-free number, 1-800-829-3676, are the places where you can get this form.
Step2: Fill out Form W-7.
Applications must include personal information on Form W-7, such as name, postal address, date of birth, and purpose of application. To confirm identification and foreign status, more information concerning immigration status and accompanying papers are needed.
Step 3: Obtain Corresponding Records
Together with Form W-7, applicants must provide original or certified copies of all supporting documentation to attest to their identification and immigration status. Passports, NID cards, birth certificates, and visas issued by the US Department of State are all accepted forms of identity.
Step Four: Send in your application
After completing Form W-7 and other required paperwork, send them to the IRS via mail or drop them off in person at an IRS Taxpayer Assistance Center (TAC).
It is crucial to realize that the ITIN is not meant to be used as personal identity outside of the tax system; rather, it is granted exclusively for tax purposes. Although an ITIN can be used to create some financial accounts and submit taxes, it does not grant employment authorization or legal immigrant status.
Is ITIN Number valid for identification?
Individual Taxpayer Identification Numbers (ITINs) are essential for complying with U.S. tax laws if you don’t qualify for a Social Security Number (SSN). However, it’s important to note that ITINs are not valid for identification purposes beyond tax-related matters.
They can’t be used for tasks like opening a bank account or obtaining a driver’s license. ITINs are solely intended to help individuals fulfill their tax obligations in the United States.
Limitations of ITIN Number
ITINs have various restrictions even though they are essential for helping those lacking SSNs comply with tax laws:
No Work Authorization: The ability to work in the US is not conferred by an ITIN. An Employment Authorization Document (EAD) or another suitable work visa is required for those who need permission to work.
No Social Security payments: Those who possess an ITIN are not eligible to receive Social Security payments. Social Security benefits are only available to individuals who possess a valid SSN.
Restricted Tax advantages: ITIN holders are not eligible for other advantages like the Earned Income Tax Credit (EITC), even though they can file tax returns and claim some tax credits like the Child Tax Credit (CTC) and the Additional Child Tax Credit (ACTC).
Completing Form W-7:
Section 1: Private Data
Give your complete legal name, mailing address, birthdate, and any other pertinent information about yourself. Explain why you’re requesting an ITIN (filing a federal tax return in the United States, for example).
Section 2: Motivation for Submission
From the list on Form W-7, choose the relevant justification for requesting an ITIN. Opening a U.S. bank account, claiming benefits from tax treaties, and filing tax returns are typical causes.
Section 3: Documents of Support
Provide original or certified copies of any supporting documentation attesting to your identification and immigration status. Make that the paperwork complies with IRS regulations and has all the information required, including your name, birthdate, and photo.
Section 4: Dependent Information
Provide your dependents’ full names, birth dates, and any other pertinent information if you are claiming them on your tax return. Make sure that each specified dependant has the necessary supporting documentation.
Section Five: Attestation and Seal
To attest that the data provided is true and comprehensive, sign and date the form. You must also provide your relationship to the dependant and your signature attesting to the accuracy of the information if you are submitting on their behalf.
Supporting Documents for ITIN:
The IRS requires specific types of documents to support an ITIN application. Acceptable documents include:
Passport: A valid passport issued by a foreign government.
National Identification Card: An official national identification card containing your name, photograph, address, date of birth, and expiration date.
Birth Certificate: A certified copy of your birth certificate issued by a foreign government.
Visa: A U.S. visa issued by the Department of State.
It’s crucial to ensure that the documents submitted are current, complete, and meet the IRS requirements for verifying identity and foreign status.
When to Apply and How Long It Takes:
People should apply for an ITIN Number as soon as they are required to file and have verified that they are not eligible for a Social Security number. After submitting a complete and thorough application, applicants usually obtain their ITIN within 7 to 11 weeks, while processing dates may vary.
Other Ways to Apply for an ITIN Number:
While the standard method of applying for an ITIN Number is by submitting Form W-7 and supporting documents by mail or in person, there are a few alternative options available:
Certified Acceptance Agents (CAAs): CAAs are authorized by the IRS to assist individuals with ITIN applications. They can review supporting documents and certify them, streamlining the application process.
Acceptance Agents: Acceptance Agents are authorized by the IRS to review and certify supporting documents for ITIN applicants. They can help ensure that applications are complete and accurate before submission to the IRS.
IRS Taxpayer Assistance Centers (TACs): Some IRS TACs provide in-person assistance with ITIN applications. However, availability may vary depending on location and restrictions.
Conclusion
The ITIN number is essential to helping people who do not have a Social Security number (SSN) to pay their taxes in the US. People can ensure compliance with U.S. tax regulations and efficiently navigate the tax system by being aware of the ITIN’s limits, application process, and purpose. In order to ensure prompt processing, it is crucial to meticulously adhere to IRS requirements and provide appropriate documents when filing for an ITIN number for the first time or renewing an existing one.
Frequently Asked Questions (FAQs)
Can I use an ITIN to work in the United States?
No, an ITIN does not authorize you to work in the United States. It is solely for tax purposes and does not affect your immigration status or your right to work.
Do ITIN Number expire?
Yes, ITINs that have not been used on a federal tax return at least once in the last three consecutive years will expire. Additionally, ITINs issued before 2013 with middle digits 70-88, 90-92, and 94-99 have expiration dates and need to be renewed.
How do I renew my ITIN Number?
If your ITIN is expiring or has expired, you can renew it by submitting a completed IRS Form W-7 along with required identity and foreign status documents. It’s advised to renew before filing your tax return to avoid delays.
Can I file taxes without an ITIN Number?
No, if you are required to file a U.S. tax return and are not eligible for an SSN, you must obtain an ITIN to file your taxes. You can apply for an ITIN when you file your tax return.
Nabin Adhikari
