Who needs an ITIN?
An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who are not eligible for a Social Security Number (SSN). Therefore, the following individuals may need to apply for an ITIN:
- Nonresident aliens who are required to file a U.S. tax return
- U.S. residents who are filing a tax return but are not eligible for an SSN, such as dependents or spouses of U.S. citizens or residents
- Nonresident aliens who are claiming a tax treaty benefit
- Nonresident aliens who are receiving income in the U.S. but are not eligible for an SSN
- Nonresident aliens who are opening a bank account in the U.S. but are not eligible for an SSN
- Nonresident aliens who are applying for a mortgage loan in the U.S. but are not eligible for an SSN
- Nonresident aliens who are applying for certain types of business licenses in the U.S.
How to apply for an ITIN
To apply for an ITIN, you need to complete Form W-7, which is the Application for IRS Individual Taxpayer Identification Number. The form can be downloaded from the IRS website or requested by mail.
When filling out Form W-7, you must provide the following information:
- Reason for applying for an ITIN
- Personal information, such as name, date of birth, and mailing address
- Foreign status and information about your country of residence
- Supporting documentation that proves your identity and foreign status, such as a passport or national identification card
- A federal tax return, if you are applying for an ITIN in order to file a tax return
After completing Form W-7, you must mail it along with your supporting documentation to the IRS. The processing time for ITIN applications can vary, but it typically takes around 7 weeks to receive your ITIN once the IRS has received your application.
Frequently asked questions about ITIN
Here are some frequently asked questions about ITIN:
How long is an ITIN valid for?
An ITIN is valid for use on federal tax returns for the duration of the holder’s lifetime, unless it is not used for federal tax purposes for a consecutive period of three years. In that case, the ITIN will expire and the holder will need to reapply.
Can an ITIN be used as identification?
No, an ITIN is not intended to be used as identification, and it cannot be used to establish your identity. It is only used for tax purposes.
Can an ITIN be used to work in the U.S.?
No, an ITIN does not authorize an individual to work in the U.S. It is only used for tax purposes.
Can an ITIN be used to obtain a driver’s license?
It depends on the state’s laws and policies. Some states may accept an ITIN as a valid form of identification for obtaining a driver’s license, while others may not.
Can I apply for an ITIN if I am already eligible for an SSN?
No, if you are eligible for an SSN, you should not apply for an ITIN. You should apply for an SSN instead.
Benefits and limitations of having an ITIN
Some benefits of having an ITIN include:
- The ability to file a U.S. tax return and comply with U.S. tax laws
- The ability to claim tax treaty benefits, if applicable
- The ability to open a U.S. bank account
- The ability to apply for certain types of business licenses in the U.S.
However, there are also some limitations to having an ITIN, such as:
- An ITIN cannot be used as identification
- An ITIN does not provide work authorization
- An ITIN does not make an individual eligible for Social Security benefits
- An ITIN does not make an individual eligible for the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC) unless they meet certain requirements
It is important to note that ITIN holders are still required to comply with U.S. tax laws and may be subject to penalties if they fail to do so. Therefore, it is important to consult with a tax professional to ensure that you are in compliance with U.S. tax laws if you have an ITIN.
How to renew or cancel an ITIN
If your ITIN is set to expire or you no longer need it, you can renew or cancel it by completing Form W-7 again. If you are renewing your ITIN, you must include a federal tax return with your application, unless you qualify for an exception.
To cancel your ITIN, you must fill out Form W-7 and check the box that indicates that you want to cancel your ITIN. You must also explain why you no longer need the ITIN and provide any supporting documentation that is relevant.
It is important to note that if you do not use your ITIN for federal tax purposes for a consecutive period of three years, it will expire automatically. If this happens, you will need to reapply if you need an ITIN again in the future.