5 ITIN Benefits for USA Migrants
In the United States of America, the ITIN is a tax identification number. It is used by foreigners 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 United States. 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.
According to Internal Revenue Service (IRS): “ITINs are for tax reporting only, and are not intended to serve any other purpose”. However some banks and companies offer certain benefits or services, if you have the ITIN making life of individuals easier to certain extent.
The ITIN is a tax number, which the IRS gives to individuals who have to file taxes or file a return, but do not qualify for a Social Security number. If you want to get an ITIN, you need to fill out Form W-7, attach a valid federal return, and submit documents that prove your identity to the IRS.
That’s why here are 5 things you can do if you have an ITIN in the United States:
1) Tax Filing
The main purpose of the ITIN is for migrants to file a tax return, if they don’t have a Social Security Number. IRS grants ITINs to help individuals comply with U.S. tax laws, and to provide an effective way to process and account for returns and payments from those who are not eligible for Social Security Numbers. By having an ITIN, you will be able to fill out an income tax return, apply for tax exemptions and even receive a refund.
2) Get Credit Card and Open Savings Account
Some banks offer credit cards and savings accounts to foreigners who have ITINs. Financial institutions such as Capital One, Citi, Chase, Deserve offer credit cards to individuals with ITINs. Some banks require another type of identification such as a passport or another person with a Social Security number to be responsible for the line of credit with you.
Here are few credit cards requiring ITIN:
- Capital One® Platinum Credit Card
- Capital One® QuicksilverOne® Cash Rewards
- Citi® Double Cash Card
- Journey® Student Rewards from Capital One®
- Capital One® Secured Mastercard®
- Chase Freedom Unlimited®
- Deserve® Edu Mastercard for Students
Check out: 5 ways to get credit card in USA without SSN
3) Buy Home
If you don’t have a Social Security number you can get a mortgage loan, to buy a house, with the ITIN. Most financial institutions that offer mortgage loans with ITINs require that you have filed taxes for at least 2 consecutive years.
Prime 1 Bancorp
Prime 1 Bancorp offers ITIN mortgage loans. However they require a higher down payment and may have higher rates than conventional financing (with Social Security). Some of the requirements to obtain the loan are: to have a 2 year employment history with the same company and to have filed taxes for two consecutive years with ITIN.
4) Apply for Driver’s License
If you have an ITIN, you may be able to get a driver’s license depending on the state where you live. Some states that require an ITIN to get a driver’s license are: Colorado, Delaware, Nevada, Washington and New Mexico. The state of California does not require an ITIN to obtain a license. However, you must present documents that prove your residency in the state.
5) Buy Car Insurance
On the other hand, by obtaining an ITIN and driver’s license, you will be able to purchase insurance for your car.
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.
According to IRS data, each fiscal year more than four million people use the ITIN to file their tax returns, known in the U.S. as tax returns paying almost 14 billion dollars.
According to data from the Taxation and Economic Policy study center, located in Washington D.C., approximately 50% of undocumented immigrants in the U.S. pay tax returns using an ITIN.