Understanding ITINs: A Friendly Guide for Taxpayers

If you have U.S. income but you’re not a citizen, you still need to file an annual U.S. federal tax return. Citizens need a Social Security Number (SSN) to file taxes, but there are others who need to file, such as foreign nationals, non-citizens, and nonresident aliens, who aren’t eligible for an SSN. 

If you need to pay taxes but don’t have an SSN, the IRS has just the thing -- the Individual Taxpayer Identification Number (ITIN). An ITIN is designed for people who are required to pay taxes in the U.S. but are not eligible for an SSN. This includes individuals who live in other countries but earn money in the U.S., as well as their spouses and children who cannot obtain an SSN. With an ITIN, you can file your tax return, receive your refund (if eligible), and comply with your obligations under U.S. tax law.

The IRS introduced the ITIN in 1996 and has issued around 30 million ITIN numbers since then. The ITIN program makes sure everyone, no matter their immigration status, can meet their tax obligations.

In some cases, a person will be granted a limited Social Security card, usually marked “VALID FOR WORK ONLY WITH DHS AUTHORIZATION,” issued to individuals with temporary work authorization; or “NOT VALID FOR EMPLOYMENT,” issued to individuals who need an SSN for non-work purposes.

But these can be complicated to obtain and are not specifically tailored for tax purposes. For most non-citizens, resident aliens, foreign nationals, and others who need to file a U.S. tax return, the ITIN is a simpler and more appropriate choice.

The Unique Role of the ITIN

This ITIN lets noncitizens and others without an SSN follow U.S. tax laws, file federal income tax returns, and claim certain tax benefits. ITIN holders can file various tax forms, like IRS Form 1040, 1040A, 1040NR, or 1040EZ, and might be eligible for credits like the Child Tax Credit and the American Opportunity Credit. However, they can't claim the Earned Income Tax Credit (EITC).

Keep in mind that obtaining an ITIN does not grant or change your immigration status. Becoming a U.S. citizen is an entirely different process.

The process for applying for an ITIN number is straightforward, but first, let’s see if you need an ITIN.

Eligibility for an ITIN

If you are uncertain about whether you need an ITIN the following information should be useful, but if you have questions or concerns, you should consult with a tax professional.

People who might need an ITIN include:

 

Noncitizens Without Work Authorization: If you’re a noncitizen allowed to work in the U.S. by the Department of Homeland Security (DHS), you can usually get an SSN. Those without work authorization but who still need to file taxes will need an ITIN.

Example: Mei is a Chinese graduate student in the U.S. on an F-1 visa. While she isn't authorized to work, she receives interest income from her U.S. savings account and needs to report this on her taxes, so she needs an ITIN.

 

Foreign Nationals With U.S. Tax Obligations: A foreign national who needs to file a U.S. tax return but can't get an SSN must get an ITIN.

Example: Diego is a business owner in Mexico who sells products to U.S. customers through an online marketplace. He earns significant income from U.S. sources and must file U.S. taxes but isn't eligible for an SSN since he doesn't live or work in the U.S. so he must have an ITIN to file.

 

Dependents or Spouses of U.S. Citizens/Residents: Dependents or spouses who can’t get an SSN but need to be included on a tax return need an ITIN.

Example: Priya recently married an American citizen and moved to the U.S. While her green card application is pending, she needs an ITIN to be listed as a spouse on their joint tax return.

 

Nonresident Aliens: Nonresident aliens who need to file a U.S. tax return or provide a taxpayer identification may need to use an ITIN for purposes, such as claiming a tax treaty benefit.

Example: Oksana is a software developer living in Estonia who provides consulting services to U.S. companies. She needs an ITIN to claim reduced tax withholding under the U.S.-Estonia tax treaty when receiving payments from her U.S. clients.

Limitations of an ITIN

Unlike SSNs, which are used for jobs and social security benefits, ITINs are just for tax purposes. With an ITIN, you can open a bank account, get a mortgage, and claim tax treaty benefits. Here are some things an ITIN does not empower you to do:

  • Employment Authorization: An ITIN doesn't let you work in the U.S. Only an SSN can be used for employment.
  • Social Security Benefits: ITIN holders aren't eligible for Social Security benefits, like retirement, disability, or survivor benefits.
  • Earned Income Tax Credit (EITC): ITIN holders can't claim the EITC, which is a benefit for low- to moderate-income workers.
  • Identification Purposes: An ITIN number can't be used as identification outside of the federal tax system. It doesn't serve as proof of identity for things like getting a driver's license.
  • Immigration Status: An ITIN doesn't provide or change your immigration status. It's only for tax reporting purposes.

How to Apply for an ITIN

Here are the steps to take if you need an ITIN number:

  1. Obtain IRS Form W-7: Download IRS Form W-7, Application for IRS Individual Taxpayer Identification Number, from the IRS website. You can also download Formulario W-7, the Spanish-language version.
  2. Complete Form W-7: Fill out the form with personal information, like your name, date of birth, and foreign address.
  3. Gather Supporting Documentation: Collect documents to verify your identity and foreign status. These might include:
    • Foreign passport
    • Foreign birth certificate
    • National identification card
    • Driver's license
    • Tax return or proof of income
  4. Submit Application and Documentation: Submit Form W-7 and supporting documents to the IRS by mail, in person at an IRS Taxpayer Assistance Center (TAC), or through an IRS-authorized Certifying Acceptance Agent (CAA). (There are additional details below on the options for submitting your application.)
  5. Await Processing: The IRS will process your application and review the supporting documents. This usually takes several weeks.
  6. Receive ITIN Notice: Once your ITIN application is approved, you'll get a notice from the IRS with your ITIN and guidelines for using it.

Here’s a part of what the Form W-7 looks like. It’s just one page.

Ways to Submit Your ITIN Application

You can submit an ITIN application in several ways:

  • In Person at an IRS TAC: Submit your application directly at an IRS Taxpayer Assistance Center. Employees there can review original documents and certified copies needed to apply for or renew your ITIN. Schedule an appointment by calling 844-545-5640. During the appointment, the IRS staff will verify your documents and return them immediately, so you can hold onto your original documents instead of mailing them.
  • By Mail: Mail Form W-7, along with your federal income tax return and the required original supporting documents or certified copies from the issuing agency, to:

  Internal Revenue Service

  Austin Service Center

  ITIN Operation

  P.O. Box 149342

  Austin, TX 78714-9342

  • Through a Certifying Acceptance Agent (CAA): If you're working with a tax preparer, they can review your documents and submit the application for you. Some tax preparers are CAAs, specifically trained to accept and process ITIN applications. (More details on the role of a CAA are below.)
  • At a U.S. Embassy or Consulate: You can also apply for an ITIN at a U.S. embassy or consulate.

Common ITIN Application Errors and Solutions

There are a few common mistakes people make when applying for an ITIN. You’ll want to avoid these:

  • Incomplete or Inaccurate Documentation: Make sure all your required documents are submitted, and the information is accurate.
  • Incorrect Mailing Address: Double-check the mailing address on Form W-7 before mailing an application.
  • Missing Signatures: Make sure all the required signatures are included.

ITIN Renewal

If you already have an ITIN, you may need to renew it if it hasn’t been used in the past three years. Many ITINs were deactivated by the IRS under the Protecting Americans from Tax Hikes (PATH) Act of 2015. This was to ensure the integrity of the tax system. The IRS also deactivates unused ITINs periodically to streamline its IT operations and ensure only useful ITINs are retained.

To renew your ITIN, complete a new Form W-7 and submit it with updated supporting documents.

The Role of Certifying Acceptance Agents (CAAs)

If you need help applying and submitting your application for an ITIN, you might want to get help from a Certifying Acceptance Agent (CAA.) CAAs are specially trained and authorized to review and certify supporting documentation for ITIN applications. A CAA can help speed up the ITIN application process and ensure your application is complete and accurate. They can:

  • Review and Certify Documentation: CAAs review and certify the supporting documentation submitted with ITIN applications, ensuring it meets IRS requirements.
  • Provide Assistance: CAAs offer guidance and help to individuals applying for ITINs, helping them understand the application process, gather necessary documentation, and address any questions or concerns.
  • Speed up Processing: By certifying the documentation, CAAs can help speed up the processing of ITIN applications, which is especially helpful for individuals needing their ITINs quickly, like those filing tax returns on a deadline or accessing critical government benefits.

If you currently work with a tax preparation professional, they may also be a CAA or could refer you to someone who is.

Conclusion

People who earn U.S. income but don't have an SSN, may need an ITIN to file their taxes and comply with U.S. tax laws. By understanding the ITIN application process, the limitations of the ITIN, the required supporting documents, and the differences between ITINs and SSNs, you can make sure you're meeting your tax obligations and accessing the benefits you're entitled to. Be sure to visit the IRS website or check with a tax professional if you have any questions about your individual situation and whether you need an ITIN.

 

Check out These Additional ITIN Resources

Form W-7 Application for IRS Individual Taxpayer Identification Number (English)

Form W-7 Solicitud de Número de Identificación Personal del Contribuyente del Servicio de Impuestos Internos (Spanish)

IRS ITIN Page (English, other languages available from the main page)

Back to Tax News