ITIN Numbers for Immigrants in the U.S.

Posted by in Immigrants | Updated on August 24, 2022

The United States is a diverse country where people of various nationalities co-exist in different circumstances. Collectively, they pay taxes and run the country. All U.S. taxes are paid with an SSN. But if you’re going to file taxes without an SSN, you must have an ITIN. In this article, we’ll explain everything you need to know about the ITIN in great detail and how you can get one for yourself.

What Is an ITIN?

An ITIN is different from an EIN. It is a unique tax processing number issued by the IRS to every U.S. citizen who is, for whatever reason, not eligible for an SSN, which is issued by the Social Security Administration (SSA).

ITIN stands for Individual Taxpayer Identification Number. It is a nine-digit number in the format XXX-XX-XXXX.

What Is an ITIN Used For?

An ITIN is issued to citizens who do not have an SSN so they can pay their taxes under national tax laws since an identification number is necessary for filing taxes.

An ITIN can sometimes be used for other purposes where your identification needs to be verified. You can also get loans with the help of an ITIN. Banks, postal services, and private companies accept an ITIN card as your ID card if you cannot produce other documents. 

Who Needs an ITIN?

As mentioned earlier, an ITIN is primarily issued to citizens who have to file their taxes with the IRS, but either do not have an SSN or are ineligible to obtain one for themselves. An ITIN is essential and can also be used to obtain home loans.

In other cases, an ITIN is issued to those who belong to the following categories:

  • Resident or non-resident aliens who are required to file taxes with the IRS under national tax laws
  • Non-resident aliens who are eligible for any tax treaty benefits
  • Non-resident aliens, students, researchers, or professors who are filing their taxes with the IRS or claiming tax benefits

H4 visa holders, for example, have to file tax returns but cannot get an SSN, which is issued only to U.S. citizens. So they have to apply for an ITIN.

Limitations of an ITIN

An ITIN is required for filing taxes and is used specifically for that purpose. It also has other applications where personal identification is required, but it has limitations. Some of them are:

  • If you’re using an ITIN for filing your taxes, you will not be able to claim earned income tax since that requires a valid SSN.
  • You will not be able to get social security benefits.
  • An ITIN doesn’t authorize you to work in the U.S.
  • While some banks will accept an ITIN as an ID document, the IRS discourages you from doing so. Since the IRS does not further validate the authenticity of your personal information, it cannot operate like other agencies who certify the authenticity and credibility of someone’s identity.

Documents Required for an ITIN

To obtain your ITIN, you will need to complete several documents. Those documents are explained below. 

Form W-7

Known as The Application for IRS Individual Taxpayer Identification Number, this is the official form required to be filled out by anyone seeking an ITIN. You can find it on the IRS website, or click here to download. Remember to use the most updated copy since there are revisions made now and then. You’re advised to complete this form as soon as you are ready to file your first federal tax return. A copy of this form should be attached to your return as well.

U.S. Federal Income Tax Return Documents

You’ll have to submit the year’s tax return document along with Form W-7. This helps the IRS verify which year you are filing your taxes with your ITIN. This includes documents like Form 1040, Form 1040A, and Form 1040EZ.

Supporting Documents

Lastly, you should include all the documents asked for in Form W-7 or as instructed by IRS officials. Some of the items to include are your passport, National ID card, Foreign voter ID card, driver’s license, U.S. State ID card, visa, and school records, among others. All documents should show your photo, name, address, expiration date, and DOB, and should be valid at the time of submission.

How to Apply for an ITIN

Applying for an ITIN is easy. After you have gathered the documents mentioned above, your next step is to start the application process. You can apply for an ITIN at any time of the year.

To get started, you have to send the documents along with Form W-7 to the nearest IRS office by courier. To locate the office nearest to you, please refer to this link, or use the address listed on Form W-7.

You can also go to an IRS office and process your application in person. This is considered safer since there’s no risk of losing your documents while shipping.

Officials will verify your documents and accept your application for further processing. You will be notified of the status as it is processed.

ITIN Processing Time

The processing time for an ITIN, as stated by the IRS, is usually six to eight weeks. It may take longer, especially during peak months like January and March. You should check the application status intermittently and contact the IRS if you haven’t heard from them after six weeks.

Certifying Acceptance Agents

If you’re applying in person instead of mailing your application to an IRS office, you can use IRS-authorized Certifying Acceptance Agents, also known as CAAs. This can be an individual, business entity, or organization authorized by the IRS to help someone get an ITIN and other application procedures. They are present throughout the country and may charge a nominal fee for their service. If you’re filing through a CAA, you’re required to submit additional copies, which the CAA agent will help you with.

Do I Need to Renew My ITIN?

If you are issued an ITIN for tax filing purposes, you’ll have to renew it as necessary. With changes in rules and regulations, your Individual Taxpayer Identification Number is valid for five years (previously three years). So an ITIN issued in 2020 will expire in 2025.

Additionally, you’ll be required to renew your ITIN if:

  • The middle digits of your ITIN are 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82.
  • The middle digit of your ITIN is not from the numbers above, and you have not filed your tax return before using an ITIN, or the ITIN was used for a dependent.

 However, you are not required to renew your ITIN if:

  • You become eligible for an SSN and will receive it in the near future.
  • Your usage of an ITIN is limited to third-party processing like on Form 1099.
  • You are not required to file your federal tax anymore.
  • You do not want to remain as a dependent on a U.S. federal tax return.

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Conclusion

An ITIN is an important document for filing tax returns. So once it is issued, keep it secure until it is expired or you no longer require it. When filing for an ITIN, it is advised to receive help from an experienced attorney.


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