SSN vs. ITIN: What’s the Difference?

Posted by Frank Gogol

An SSN and an ITIN, to some extent, serve the same purpose. So, it is not uncommon for non-residents to get confused with both of these numbers. But it’s worth noting that you cannot have both at the same time and each of these numbers are issued differently and to different individuals.

In this article, we’ll take a deep dive into the intrinsic differences between an ITIN and SSN and what each number means to you.

Difference Between a Social Security Number and an Individual Taxpayer Identification Number

While used interchangeably by some individuals, there’s a sharp distinction between SSN and ITIN which everyone should know. Before learning about the differences, it’s better to get acquainted with the two numbers first and their usage in the US.

What is the Social Security Number (SSN)?

SSN is issued by the Social Security Administration (SSA) and is like a personal ID for most Americans. It is issued to people who were either born in the United States or are authorized to work in the US. SSN is a nine-digit number with the format XXX-XX-XXXX, in which the first three letters are called “area number”, next two are called “group number” and the last four are collectively called “serial number”.

 Its main purpose is to track individuals across a broad range of services offered by the US government and its associates. But nowadays, it is a de facto national ID number for taxation and various other purposes.

What is an Individual Taxpayer Identification Number (ITIN)?

ITIN is issued by the IRS and is used for tax filing purposes. An ITIN is issued to those who, for some reason, aren’t allowed to have an SSN but have to pay their taxes. So ITIN is only issued to nonresident aliens and not to the citizens (unless they are ineligible for SSN).

Thus, with the help of ITIN, the IRS can identify you as a taxpayer which, in turn, helps you file your taxes. ITIN is a unique nine-digit number with the format 9XX-7X-XXXX. As you can see, the first number always begins with 9 and the fourth with 7.

An ITIN can also be used in place of an SSN when applying for some personal loans.

What is the Difference?

The main difference between an SSN and ITIN is that SSN is issued to US citizens and authorized non-citizens, while ITIN is issued to the resident with foreign status or undocumented immigrants. The latter cannot be issued an SSN, but if they are allowed to stay in the US, then they have to pay their taxes. So in a way, ITIN is used as a replacement for SSN in case you are not allowed to possess an SSN. ITIN can be used in place of SSN for taxation purposes.

SSN is issued to citizens and certain noncitizens residents. ITIN is issued to undocumented aliens and nonresident aliens who work or conduct business in the US. In certain cases where there’s a partnership, trust, and real estate involved, the foreign entities would be issued an ITIN for paying their taxes.

Benefits of an SSN

SSN is among the most important identification documentation numbers issued to someone in the United States. Many of the tasks like opening a bank account, getting a driving license, and applying for a visa requires SSN for identification and processing.

As a non-citizen, you’ll be able to work in the US and file your taxes seamlessly. Afterward, you’ll be able to claim various tax credits like child care credit which is not possible with an ITIN. So, always strive to get yourself an SSN over an ITIN.

How to Apply for an SSN as a Non-Citizen

If you’re a non-citizen living (or are going to live) in the US, then here are the steps involved for getting your own SSN:

  • Fill out Form SS-5, Application for a Social Security Card.
  • Provide at least two documents that prove your identity and immigration status (a work permit will do).
  • If you’re a student or J-visa holder, then submit the DS-2019 Certificate of Eligibility for Exchange Visitor Status and I-20 certificates.
  • Provide any other documents like EAD, I-94 if asked for.
  • Submit all of these at your local SSA office and complete all formalities.

Please note that only original documents will be accepted for verification. Once issued, it will be mailed to your mailing address.

Benefits of an ITIN

As opposed to SSN, an ITIN doesn’t authorize you to live or work in the United States. It is specifically designed for taxation and other purposes. The major benefit of having an ITIN is that it allows you to pay taxes in the US without an SSN and remain compliant with the US tax laws.

While you are not eligible for claiming social security benefits, you can claim it afterward if you become eligible for an SSN. All your tax payments before that will count towards earnings for Social Security purposes. Some states accept ITIN for opening interest-bearing bank accounts and as an ID for driving license. So, as a non-citizen, if you’re not eligible for SSN, you should get an ITIN.

How to Apply for an ITIN as a Non- Citizen

If you want to get your own ITIN, here are the steps involved:

  • Fill out the Form W-7, Application for ITIN Number which you can download from the IRS website. You need to choose the right option for the “Reason for Applying ITIN” question, whether you’re a spouse or dependent, etc.
  • Submit federal income tax documents like Form 1040, Form 1040A, or Form 1040EZ, whichever applies to you.
  • Supplement it with other documents like passport, US or other government-issued ID cards, proof of US residency.
  • Send all the documents to the IRS office via mail or walk into the office directly.

Providing original documents is recommended. However, if you cannot provide original copies, then they need to be certified and notarized. You’ll be mailed your ITIN once it is issued which is usually six weeks from the date of application.

Will My SSN or ITIN Expire?

There’s no expiry associated with SSN. Once issued, it is your identity forever and seldom requires changes or updates. ITIN, on the other hand, will expire after five consecutive years of non-usage. This means, if you don’t file your taxes using your ITIN for five consecutive years, then it will expire automatically. Before 2013, there was no such context. But when the IRS realized that about a quarter of the issued ITINs were unused for years, it decided to dismiss the inactive ones.

If you become eligible for SSN and it gets issued to you, then your ITIN will become invalid and you’ll be asked to pay taxes with the SSN instead. You can read more about it here

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Conclusion

The best way to decide whether you should apply for an SSN or ITIN is to check the eligibility criteria. As a rule of thumb, you should go for SSN if you’re sponsored by a US-based employer to work in the US. If not, then ITIN is best suited for you. It’s better to get in touch with a reputed immigration attorney to help you in this process. Once issued, you should start filing taxes as soon as possible.

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