Individual Taxpayer Identification Number (ITIN) is essentially a tax processing number that is issued by the Internal Revenue Service of the U.S.
It ascertains undocumented immigrants to pay taxes. It is designed only for certain nonresident and residents, their spouses, and other dependents that do not have a Social Security Number, respective of their immigration status.
ITIN help the Internal Revenue Service in procuring billions of dollars in taxes that the Federal Government otherwise would have lost.
But the question that many people ask is: how to obtain an ITIN number for a non-resident or a resident.
In this post, we’ll uncover everything and will show you how you can apply and get an ITIN number without going through any kind of hassle.
But before that, let’s quickly understand what ITIN actually is and how to get an ITIN number.
What is an ITIN number?
The ITIN was primarily created for taxation purposes. It was created by IRS and came into existence way back in July 1996.
The sole purpose of this number is to help foreign nationals and other individuals to comply with the US taxation laws. It also includes individuals who are not eligible for Social Security Number (SSN).
The ITIN is a nine-digit number that always starts with the number 9 and comprises a series of numbers from 50-65, 70-88, 90-92, and 94-99 for the digits in the 5th and 4th position. Usually, e-ITIN is formatted as SSN: 9XX-7XX-XXXX.
Most of the immigrants have the ITIN. The individuals that do not have lawful status in the United States are also eligible to apply for an ITIN. People who are not eligible for an SSN get an ITIN including:
- Non-resident foreign nationals engaged in business or trade based in the United States. It is typically a person with US income but citizenship of another country.
- Non-resident foreign national students, researchers, and professors are liable to file tax returns in the US.
- Dependent spouse of foreign national with a temporary visa.
- Dependent spouse of US citizen for lawful permanent residents.
Why Do You Need an ITIN number?
The ITIN helps individuals to comply with US tax laws. If you need to file a US tax return or your name reflects on a tax return as a spouse or dependent and you are ineligible for a valid SSN, you have to apply for an ITIN number.
Social Security Numbers can be issued regardless of the emigration status since both non-residents and residents are eligible to file US tax or report requirements under the internal revenue code.
As per U.S law, an individual cannot have both, SSN and an ITIN number. While completing a tax return, you have to enter the ITIN in the space for SSN provided.
Stating the ITIN on the tax return ensures quick processing and an early receipt of refund. Normally dependents on an H4 visa, L2 visa, and F2 visa should apply for an ITIN.
It is also necessary for filing joint taxes in the U.S.
You Need to Apply for an ITIN if:
- You belong to the F-1 or J-1 status category.
- You don’t have an SSN number.
- You have no plan to work on campus.
- You receive a scholarship stipend which is being directly paid to your account through Student Fiscal Services.
- You receive non-employment income from any U.S source which is taxable.
Note, that non-employment income includes scholarships, fellowships, grants, and other non-employment stipend payments. These are taxable if they are greater than the amount of tuition fee.
ITIN does not provide:
- legal immigration status, so it cannot be used by anyone to prove their legal presence in the US
- eligibility to the bearers for Social Security Benefits
- work authorization
Some Other Purposes of an ITIN
Apart from assisting the immigrants to abide by the tax structure of the U.S, ITIN also serves them for:
- Opening an interest-bearing bank account
- Securing a driver’s license, driver’s permit, or state identification card
- Providing proof of residency
Documents Required to Apply ITIN
The Internal Revenue Service has revised a list acceptable as proof of identity and foreign status. In addition, applicants need to provide an original and valid passport as proof of foreign status and identity.
Applicants submitting an original passport or certified copy of a valid passport are required to provide any supporting documents.
Only the individuals not providing a passport are required to submit a combination of current and valid documents that are listed in the following section. These documents and their combination should satisfy:
- Your identity and should have your name and recent photograph
- It must support your claim of foreign status
- National identification card with your name, photograph, date of birth, current address, and the expiration date of your passport
- The United States driver's license
- Foreign driver's license
- Civil birth certificate
- US military identification card
- Visa
- Foreign military identification card
- Foreign voters registration card
- US Citizenship and Immigration Services photo identification (USCIS)
- School records(for dependents and students only)
- Medical records (for dependents only)
Applicants can submit copies of original documents as they are not returned, and kept as records.
The copies should be certified by the issuing agency or official custodian of the original record or should be notarized by a US notary public.
Upon submission of original documents, they are returned after proper verification. You do have not to provide a return envelope to get back your original documents.
If you do not receive your original documents within 60 days get in touch with the IRS at their telephone assistance number. It is always recommended to keep a copy of the application and all the documents sent.
To be on the safer side applicants must mail applications by insured mail. Also, avoid sending original documents when the copies can solve the purpose.
How to Apply For an ITIN (3 Ways)
An individual should apply for ITIN number as soon as they are ready for filing a federal income tax return.
For filing a return, the application form of ITIN also needs to be attached. It is possible to apply for ITIN any time of the year.
But note that if the tax return attached to the ITIN application form W-7 is filed after the prescribed date of the return, you have to pay interest and will be charged with some penalties.
The current year's returns should be filed by April 15 last to help avoid penalties to your tax returns.
If an individual does not satisfy the exceptions listed on the W-7 (page 3) form, they do not need to file a tax return. However, apply for the ITIN as soon as you discover that you are covered under a specific exemption.
Normally there are three ways to apply for an ITIN:
Method #1: Apply in Person
An applicant can apply for the ITIN in person. They must carry the completed forms and all the valid documents to any of the IRS Taxpayer Assistance Centers in the United States, and apply in confidence.
Method #2: Apply by mail
You can also mail duly filled form W-7 along with tax return and other necessary documents including identification documents to the internal revenue service.
Method #3: Apply through an Acceptance Agent
Applicants can also apply through an acceptance agent authorized by the IRS. Acceptance agents are likely to review the documentation, complete a certificate of accuracy, and forward the certificate and the application to IRS for further processing. You have to pay small fees to these Acceptance Agents.
How Much Does It Cost To Get An ITIN?
The actual cost of the ITIN application does not cost anything to you. It can be done on your own if you follow all the instructions properly and know how to apply and how much it costs to get an ITIN number.
However, the documents required may cost you some money. For example, while getting your tax return prepared, you have to pay an accountant. Or, if you choose to apply through an agent, you will have to pay them a small amount as their service charges.
How Long Does it Take to Get an ITIN Number?
The applicant will not receive any card but will get an authorization letter from the Internal Revenue Service department.
It helps in the prevention of similarities and confusion with Social Security Cards. When the applicant qualifies for the ITIN and the application is complete, you will get a letter with your tax identification number.
The number is usually issued within 4 to 6 weeks. If you fail to receive the letter from the IRS within the specified period, call the concerned department on weekdays to check for the status of your application.
Can You Apply for an ITIN Number Without a Tax Return?
Yes, you can apply for an ITIN even when you are not filing a tax return. The sole purpose of the ITIN is to help recognize a non-resident or resident individual and receive benefits.
A large chunk of the American workforce is comprised of foreign nationals. They do not qualify for the Social Security Number but still file the taxes by registering for an individual taxpayer identification number.
If you want to make an ITIN application without a federal tax return, you have to provide proof to support your claim for an exemption.
This proof includes a duly signed letter from your employee, mortgage holder, etc. To find a detailed list of exemption criteria you can go through the official W-7 form instructions issued by the IRS.
However, submitting W-7 without proper documents delays the issuance of your ITIN. So it is recommended to take the help of an expert when applying for a new ITIN, or when you need to ally for the renewal of an expired ITIN.
Do International Students Need ITIN?
Usually, foreign individuals can choose to apply for a Social Security Number on an individual taxpayer identification number for tax-related documents.
International students with an immigration status are allowed to be employed in the United States under specific circumstances of the US immigration law. These individuals can apply to form Social Security Number social security administration.
The majority of the foreign scholars and students with F-1, J-1, and M-1, Q-1, and Q-2 nonimmigrant status in the United States are eligible to get an exception if they are employed within the United States.
Similarly, foreigners, who are not eligible to apply for our Social Security Number or do not meet the Social Security Administration evidence requirement may apply for Individual Taxpayer Identification Number internal revenue service.
They can also apply for Individual Taxpayer-Identification Numbers if they can produce valid tax reasons as described in the form w7 SP. Applicants can also refer to IRS publication 1915 for a detailed explanation.
Conclusion
The Individual Taxpayer Identification Number is an identification number for US taxpayers issued by the IRS internal revenue service.
It is important to keep in mind that the process of applying and getting a taxpayer number can vary depending on the citizenship and occupation of an individual.
Therefore one must always have sufficient knowledge about how to find your ITIN number or hire a professional tax consultant for a hassle-free tax filing experience.
