Gokce Tandogdu
ITIN Specialist, itin.net
ITIN numbers do not have a fixed length and do not expire. They are a permanent, 9-digit taxpayer identification number issued by the Internal Revenue Service (IRS) to individuals who are required to have a U.S. taxpayer identification number but do not have, and are not eligible to obtain, a Social Security number (SSN). The structure of an ITIN is similar to an SSN, consisting of nine digits formatted as ###-##-####. The first digit is always a '9', followed by a '0' or '1' as the second digit, and then other digits. The IRS issues ITINs for tax processing purposes only. They do not grant eligibility for employment in the U.S., nor do they provide eligibility for Social Security benefits. If you are wondering how long are ITIN numbers, the answer is that they are permanent and never expire unless they are never used for tax filing. The IRS has a policy to deactivate ITINs that have not been used on a federal tax return for three consecutive tax years. However, this deactivation does not mean the number is invalid permanently; it can be reactivated by using it on a subsequent tax return.
What is an ITIN and Why is it Issued?
An ITIN, or Individual Taxpayer Identification Number, is a processing and identification tool created by the IRS. It is essential for non-residents and foreign nationals who need to file U.S. tax returns but cannot obtain an SSN. This includes individuals who have U.S. tax filing obligations due to U.S. source income, such as:
- Foreign nationals earning income in the U.S.
- Non-resident aliens filing U.S. tax returns (e.g., Form 1040-NR).
- Dependents or spouses of U.S. citizens or resident aliens who cannot get an SSN.
- Individuals claiming tax treaty benefits.
- Aliens claiming exceptions to the physical presence requirement of Section 7701(b).
An ITIN is also necessary for individuals who need to open a U.S. bank account for investment or business purposes, or to comply with IRS reporting requirements, such as filing Form 5472 for U.S. business activities. While an ITIN itself does not authorize employment, it is a critical step for many foreign individuals involved in U.S. financial and tax matters.
Structure and Format of an ITIN
As mentioned, an ITIN is a 9-digit number issued by the IRS. The format is ###-##-####. The first digit is always a '9'. The second digit is typically '0' or '1'. The remaining digits are assigned sequentially. For example, numbers starting with '90' were issued earlier, while those starting with '91' came later. The IRS assigns these numbers through its ITIN program. The specific digits within an ITIN do not indicate its age or expiration status, as ITINs are designed to be permanent for tax processing.
It is important to distinguish an ITIN from an Employer Identification Number (EIN), also known as a Federal Employer Identification Number (FEIN) or Form SS-4 number. An EIN is for businesses, trusts, estates, and other entities, while an ITIN is for individuals. The IRS issues both, but they serve entirely different purposes.
ITIN Validity and Expiration
ITINs do not expire. Once issued, an ITIN remains valid for the life of the taxpayer, provided it is used for tax filing purposes. However, the IRS has a policy to inactivate ITINs that have not been included on a federal tax return for three consecutive years. This inactivation policy was implemented to ensure the integrity of the ITIN program and to manage the ITIN inventory. If your ITIN is inactivated due to non-use, you can reactivate it by simply including it on a federal tax return in a subsequent year. The IRS will then reinstate your ITIN for future use. There is no need to reapply for a new ITIN unless you have lost your original notice or are unable to recall the number. The original notice from the IRS, often CP-565, contains your assigned ITIN.
Reactivating an Inactivated ITIN
If your ITIN has been inactivated, the process to reactivate it is straightforward. You simply need to file a federal tax return using your existing ITIN. When the IRS receives your tax return with the inactivated ITIN, they will automatically reactivate it. You do not need to submit a separate application or form to request reactivation. The IRS will continue to use the existing number for all your tax processing needs. If you are unsure whether your ITIN is still active, you can contact the IRS directly or use the services of a Certified Acceptance Agent (CAA) to inquire on your behalf. Some taxpayers may receive a notice from the IRS, such as CP-48, if their ITIN is about to be inactivated, but this is not always the case. Proactive filing is the best way to ensure your ITIN remains active.
When is an ITIN Required?
An ITIN is required in several situations for non-U.S. persons engaging with the U.S. tax system:
- Filing U.S. Tax Returns: Any non-resident alien who has U.S. income and is required to file a U.S. tax return, such as Form 1040-NR, must have an ITIN unless they are eligible for an SSN. This includes individuals receiving rental income, business income, or certain other types of U.S. income.
- Claiming Tax Treaty Benefits: If you are a resident of a country with a tax treaty with the U.S. and you wish to claim reduced withholding rates on certain types of U.S. source income (like dividends or royalties), you will typically need an ITIN to identify yourself on the relevant forms, such as Form W-7 when applying for the ITIN itself, and then on the income reporting forms.
- Opening U.S. Bank Accounts: Many U.S. banks and financial institutions require a U.S. taxpayer identification number to open an account. While some may accept foreign identification, many require either an SSN or an ITIN, especially for non-resident aliens. This is crucial for managing U.S. investments or business funds. Services like Mercury, Relay, or Brex often require a U.S. taxpayer ID.
- Establishing a U.S. Business: If you are forming a U.S. LLC or another business entity, an ITIN may be necessary for the responsible individual to obtain an EIN for the business, or to comply with reporting requirements like Form 5472 for disregarded entities. Even if you are not a U.S. resident, operating a U.S. LLC can trigger IRS reporting obligations.
- Processing Certain U.S. Investments: For certain U.S. investments, such as real estate, an ITIN might be needed for tax reporting purposes. This is particularly true if you are selling U.S. property and have a tax liability.
Applying for an ITIN
Applying for an ITIN involves submitting Form W-7, Application for IRS Individual Taxpayer Identification Number, along with original or certified copies of required identification documents and a federal tax return (unless an exception applies). The primary identification document is usually a passport. If a passport is not used, a combination of other documents proving identity and foreign status is required. You can submit your application:
- By Mail: Send your completed Form W-7, supporting documents, and tax return to the IRS address specified in the Form W-7 instructions.
- Through a Certified Acceptance Agent (CAA): This is often the preferred method. A CAA is an individual or entity authorized by the IRS to help taxpayers apply for ITINs. The CAA can verify your original identification documents and forward your application to the IRS. This means you do not have to mail your original documents, reducing the risk of loss. itin.net works with clients as a CAA to facilitate the ITIN application process.
- At an IRS Taxpayer Assistance Center (TAC): Some TACs offer in-person appointments for ITIN applications. You must schedule an appointment in advance.
The IRS reviews all applications and supporting documentation. If approved, you will receive an official notice from the IRS containing your ITIN, typically CP-565. Processing times can vary significantly depending on the volume of applications the IRS receives. Currently, it can take several weeks to months to receive an ITIN.
Common Misconceptions about ITIN Length and Validity
Many individuals unfamiliar with the U.S. tax system are confused about how long ITIN numbers are and if they expire. The most common misconception is that an ITIN has a limited validity period, similar to a visa or driver's license. This is incorrect. An ITIN is a permanent tax identification number for the individual. Another misconception is that an ITIN is tied to a specific tax year or filing requirement. While you need an ITIN to file taxes, the number itself is issued for your lifetime. The IRS's policy of inactivating unused ITINs sometimes leads to confusion, making people think the numbers expire. However, as explained, inactivation is a procedural step that can be reversed simply by filing a tax return.
Understanding that ITINs are permanent identifiers for tax purposes is key. They are not temporary permits or licenses. The length of the number (9 digits) is also fixed, as is its format. What matters more than the "length" of the number is its ongoing validity through use in tax filings. For those planning to engage in U.S. business, obtaining an ITIN is often the first step, followed by securing an EIN for the business and potentially opening a U.S. bank account.
Next Steps After Receiving Your ITIN
Once you have your ITIN, you can proceed with your U.S. tax obligations. This typically involves filing your federal income tax return, such as Form 1040-NR. If you are establishing a U.S. business, you may need to apply for an EIN using Form SS-4. This is a separate process from obtaining an ITIN. For instance, if you formed a U.S. LLC, you will likely need an EIN to operate it effectively and may need to file Form 5472 annually to report transactions between the LLC and yourself. Opening a U.S. bank account is another common next step for non-residents with business or investment activities in the U.S. The process for obtaining an EIN and opening a bank account can be complex for non-residents, and services like itin.net can assist with these as well, connecting you to resources for EIN applications and banking solutions.
Remember that you must use your ITIN on all U.S. federal tax returns and other tax-related documents. Failure to do so can lead to processing delays or rejections. If you move or change your mailing address, you do not need to notify the IRS to update your ITIN address, but you should ensure your tax returns reflect your current address. If you lose your ITIN notice, you can request a copy from the IRS by writing to them or by having a CAA inquire on your behalf. The ITIN remains a vital part of your U.S. tax identity throughout your engagement with the U.S. tax system. For more detailed information on ITINs and related tax matters, you can explore the Q&A section on itin.net or visit the author page for insights from specialists like Gokce Tandogdu.