ITIN Guide: Who Can Apply, How, Renewal, Documents Reqd. & more
In the United States, the ITIN is a tax identification number. It is used by migrants who are not eligible for a Social Security Number (SSN).
ITIN stands for Individual Taxpayer Identification Number and is used for two different purposes. First, to pay taxes on income earned in the US. Federal law requires everyone who receives income in the United States regardless of immigration status to pay taxes. Second, the ITIN identifies spouses and dependent children who do not have SSN, so that taxpayers can deduct for those family members.
This article discusses the basics of the ITIN, who can apply, how it is done, how it is renewed, and what it can and cannot be used for.
Who can apply for the ITIN?
The ITIN can be applied for by people in different situations.
Foreigners: For example, foreigners who habitually reside outside the United States but are required to file their federal income tax returns. For example, investors or entrepreneurs from other countries who have money invested or a business in the U.S.
Non-US Residents: Another group that can apply for the ITIN is non-U.S. resident aliens who can apply for a tax benefit under an international treaty.
International Students: Also, another group that must apply for the ITIN is international students who live in the United States long enough to be considered tax residents. It is very important to understand that this does not make them residents for immigration purposes, i.e. they cannot obtain a permanent residence card. However, if the IRS considers an alien to be a resident for tax purposes, they must do so.
[Read this to understand credit cards requiring ITIN in USA]
Dependents: Another group of people for whom it is convenient to have an ITIN is spouses and dependent children of U.S. citizens or lawful permanent residents who cannot get the social security card. An example of this situation is the case of spouses or other dependents who habitually live outside the United States.
It is convenient that these people have an ITIN each because this way citizens and permanent residents can deduct them while filing tax returns.
Temporary Visa Holders: The ITIN can also be applied for by the spouse and dependent children of persons with a temporary visa. A very typical case is that of the H-1B visa for professionals and models that allows a certain group of foreigners to work in the U.S. and be accompanied in the country by their immediate family, but they cannot work or obtain an SSN. The way to obtain possible tax benefits by deducting dependents when declaring income is by identifying those dependents with an ITIN.
Undocumented Migrants: The ITIN is frequently requested by undocumented migrants. The reason is that by law they are required to pay taxes on their income in the United States, even though they do not have permission to work legally.
There are two exceptions to that rule. First, when the Treasury Department investigates a possible tax fraud, and second, when there is a court order for the IRS to disclose that information because an investigation is underway.
Legal Immigrants: Finally, ITIN can also be applied for by people in legal immigration status but who are not currently able to apply for an SSN, such as some victims of domestic violence.
Basic ITIN Information
The ITIN was created in 1996 and is a nine-digit number. It always begins with the number 9 and in fourth place appears the number 7 or 8. Currently, the ITIN is valid for five years.
Each fiscal year millions of people use the ITIN to file their tax returns.
How first timers can apply for ITIN?
There are two ways to apply for ITIN:
By Mail: The ITIN can be applied for by mail using form W7. In addition, you must include the tax return and original or certified documents from the issuing authority that prove your identity and your alien status. If original documents are sent, they will be returned within 60 days of receiving the application.
The address to send the application to from the U.S. or another country:
Internal Revenue Service
Austin Service Center
P.O. Box 149342
Austin, TX 78714-9342
Appointment: But an easier and more convenient way to apply for the ITIN by closing an appointment with an authorized agent, some of whom are located outside the United States (Acceptance Agent) or by visiting a Taxpayer Assistance Center (TACs), where a specialized person will be able to assist in this process and verify the authenticity of the documents.
Documents Required during ITIN Application
In order to apply for the ITIN, the identity of the applicant and his or her foreign status must be proven. Thirteen documents are accepted, including: passport, identification card, U.S. or home country driver’s license, official birth certificate for children under 18, U.S. state ID card, visa, U.S. or foreign military card, or foreign voter’s card.
In order for any of these documents to be admissible, it is necessary to present the original or copy certified by the issuing entity. Another option is to verify them on a TAC or with an Acceptance Agent. In addition, they cannot be expired and they must clearly show the name of the applicant, a photo of the applicant and must serve as proof of his or her foreign status.
How long does it take to process ITIN?
In general, the tax identification number will be received within six weeks of the request, provided that the application is complete and no document is missing. If you do not receive a reply within this period of time, you can call the telephone number indicated below to find out the status:
- Call the IRS toll-free number at 1-800-829-1040 (if in US)
- If you are outside the United States, call 267-941-1000 (not a toll-free number)
ITIN Expiry and Renewal
Currently, all ITINs are valid for only five years. They are renewed in the same way they were first requested. The only difference is that when renewing you do not have to present a tax return.
In addition, it should be noted that, if the ITIN automatically loses validity if it is not used for three consecutive years.
If a tax return is filed with an expired ITIN, the tax return will be processed but no exemptions or credits will be taken into account and no money will be returned to the appropriate taxpayer until a valid ITIN is filed.
What can the ITIN be used for and what can it not?
Despite being a number officially issued by an agency of the U.S. Department of the Treasury, the ITIN may not be used as identification or, in any case, as a substitute for a social number.
ITIN never proves that you are authorized to work. It is not one of the I-9 documents completed when you start working for a company. Also, if the company uses the e-verify system, it would be obvious that you do not have permission to work.
Additional Reading: Benefits of ITIN for migrants
Paying taxes with an ITIN does not qualify for the Earned Income Tax Credit (EITC), which is the most requested by low-income working families. You also cannot get benefits from Social Security or Medicare, even though you contributed taxes to those funds.
The ITIN is used to pay taxes because it is required by law. It is also used because it provides some benefits. For example, people who pay taxes with an ITIN can apply for a Child Tax Credit for their dependent children, with a maximum of $2,000 per child. Currently, however, these dependents are required to have their own social security number.
In addition, when a migrant changes immigration status, paying taxes with ITIN may serve to prove years of residence in the country. It may also entitle you to count payments already made to Medicare and the social security system once you have a social security number. Due to its sensitive nature, it is advisable to consult an attorney.
The ITIN also entitles you to open an interest-bearing bank account. Finally, some states list the ITIN as one of the documents that can be presented to prove identity when applying for a driver’s license or ID.