What is an ITIN or Individual Taxpayer Identification Number?
Individual Taxpayer Identification Number (“ITIN”) is a tax ID number issued by the Internal Revenue Service (“IRS”) to individuals who are obliged for a U.S. tax filing or reporting requirement under the Internal Revenue Code and are not eligible to obtain a Social Security number (“SSN”) from the Social Security Administration (“SSA”).
ITIN is only used as a label by the federal government for filing taxes. It serves no other purposes and does not offer a person the same benefits an SSN does.
Why do I need an ITIN?
There are a number of circumstances why someone may require an ITIN. Individuals falling under the following categories that do not have, have never had, or are ineligible for a US Social Security Number may require an ITIN:
- Foreign nationals who are filing tax returns
- Dependents of U.S. citizens or foreign nationals
- Spouses of U.S. citizens or foreign nationals
- Foreign national students who qualify as U.S. residents
- Those who receive taxable income from a U.S. business but live outside the U.S.
What is an ITIN used for?
An ITIN is used to help individuals comply with U.S. tax laws, and to provide a means to efficiently process and account for tax returns and payments. Furthermore, an ITIN is needed for non-US citizens if they are receiving income such as payments, royalties, pensions, annuities, rental or dividends, and are required to provide an ITIN to the organization requesting a Tax ID for tax withholding or reporting requirements.
You can use an ITIN to:
- serve as your identification number for filing your taxes
- Get a tax refund from the IRS (if you qualify)
- File your taxes and claim dependents you support in the U.S., Mexico or Canada. (Dependent or spouse of a US citizen/resident alien (non-resident alien spouse who makes this election are not required to report his or her individual non-US financial account on an FBAR, but if the US spouse meets the filing threshold, then foreign assets of the non-resident spouse must be included).
- Open a bank account or apply for a mortgage loan
How to Obtain an ITIN?
In order to obtain an ITIN, the individual must:
- complete a Form W-7, Application for IRS Individual Taxpayer Identification Number, along with their federal income tax return, and
- prove their identity and foreign nationality status by providing a combination of original documents (see the table below) or certified copies of the documents. (A certified copy is one that the original issuing agency provides and certifies as an exact copy of the original document and that contains an official stamped seal from that agency. Notarized copies are not acceptable.)
An individual can apply for an ITIN by mail, in person through a designated IRS Taxpayer Assistance Centre (TAX), or with the help of an Acceptance Agent (AA) or a Certified Acceptance Agent (CAA) authorized by the IRS.
Any individual who resides outside the U.S. may apply by mail or in person to an IRS employee or a designated U.S. diplomatic mission or consular post.
How long does it take to get an ITIN?
It can take 6 to 8 weeks sometimes longer to obtain an ITIN. And it’s important to be aware that it can often take more than one application before you successfully receive an ITIN. The IRS is generally efficient in informing applicants of any issues with the process. Once your application is complete you will receive a letter from the IRS assigning your tax identification number.
How long is an ITIN valid for?
In general, ITINs does not expire unless if the ITIN holder does not file a tax return or wasn’t included as a dependent on the tax return of another taxpayer for three consecutive years. In this case, the ITIN will expire on the last day of the third consecutive year.