If you do not have a Social Security number but need to file US taxes, you will need to apply for an Individual Taxpayer Identification Number, known simply as an ITIN. This is a number issued by the IRS in order to ensure efficient processing of returns for taxpayers who are not eligible to receive a SSN. An ITIN always begins with the number 9 and is a 9-digit number. One can receive an ITIN regardless of immigration status, and you may have a filing obligation under the Internal Revenue code, both as a resident or non-resident alien.
One cannot be a holder of both an ITIN and a SSN. If you have a SSN, you should not apply for an ITIN. If your SSN application is rejected by the Social Security administration, an ITIN can then be applied for.
If you have an ITIN and then receive a SSN, your returns filed after your SSN is assigned need to be under the SSN and not the ITIN. You will also need to contact the ITIN unit to inform them of the change of number so that the account can be merged to avoid confusion with return processing and the like.
It is important to understand that an ITIN is a form of identification for tax purposes only. As such, you cannot use your ITIN number as a form of ID for other reasons, such as obtaining a state driver’s license. This is because as an identifying number that is used within the Federal tax system, the standards for identification of ITIN holders are not the same as for other agencies.
Similarly, receiving an ITIN does not change your status or rights in any way. It will not make you eligible for Social Security benefits. It also does change immigration status, nor authorise working in the US. If a taxpayer or his spouse are an ITIN holder, they will not be eligible to claim Earned Income Tax Credit (EITC), this is regardless of whether they have dependents who have valid Social Security numbers. If both spouses on a joint return have SSN, but some of their dependents have an ITIN, only their dependents who have a valid Social Security number will be able to claim the EITC.
One needs to show a tax purpose in order to be issued an ITIN. The way to do this is by sending the application together with a tax return, to demonstrate that the ITIN is being requested for tax purposes.
Below is a list of purposes for which one would require an ITIN.
Now that we have established what an ITIN is and its purpose, we will explain the actual application process.
An ITIN is applied for by filing a Form W-7, Application for Individual Taxpayer Identification Number. This Form requires the applicant to provide their name, date of birth and address as well as other information. In order for the application to be considered and processed, two identifying documents needs to be attached to the Form being sent to the IRS. These documents serve the purpose of establishing the applicant’s identity and foreign status. There is a list of 13 documents that the IRS will accept and the documents must be current in order to be accepted. at least one of the two documents needs to include a photo of the applicant.
A passport establishes both the identity and foreign status. It is therefore a stand-alone document, and can be submitted without other accompanying documents.
There are three manners in which the application can be done, from outside the US.
The verification interview with the CAA can be done as a face to face meeting, or a video conference.
We at Expat Tax CPAs, have a CAA on staff and will be able to assist you with your ITIN application and allow you to avoid sending your original ID documents to the IRS.
Once your application is received by the IRS, they should process it and send you a response within 6 weeks. If any information was missing from the original application, you will be sent a letter requesting that you submit the missing information within a certain timeframe. Failure to provide the additional information timely will cause your application to be rejected, which means you will need to send a new one.
Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal tax return at least once in the last three consecutive years will no longer be valid for use on a tax return unless renewed by the taxpayer. In addition, ITINs issued prior to 2013 will need to be renewed according to a rolling renewal schedule. As of December 31st 2019 ITINs, with middle digits of 70 through 87 have expired (For example: 9NN-83-NNNN).
An ITIN holder whose ITIN has expired needs to file an ITIN Renewal Application. This is done by submitting the same Forms and documents as for an original ITIN application. Care should be taken to ensure the ‘ITIN Renewal’ option is checked on the Form W-7, and your expired ITIN number must also be included in the appropriate section of the form.
Tax returns filed with an expired ITIN will be processed, however exemptions and certain credits will be disallowed. The IRS will send a letter to inform the taxpayer of this. Once the ITIN is renewed, the account can be reversed to allow the exemptions and any credits that were disallowed due to the ITIN being expired.
Form W7 ITIN Application | $165 |
Form W7 ITIN Application alone without the 1040 tax return | $275 |
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