Gokce Tandogdu
ITIN Specialist, itin.net
You can start the process to obtain an ITIN once you have a U.S. tax filing obligation that requires you to have a U.S. taxpayer identification number and you do not qualify for a Social Security number (SSN). The keyword "itin when started" directly addresses this core requirement: the need for a tax obligation.
When You Need an ITIN
The primary reason to apply for an ITIN is to fulfill a U.S. tax requirement. This typically arises in several common scenarios for non-residents and foreign nationals:
- Filing a U.S. Tax Return: If you have U.S. source income (e.g., from investments, business activities, or employment that doesn't qualify for an SSN) and need to file a U.S. federal income tax return, such as Form 1040-NR (U.S. Nonresident Alien Income Tax Return), you will likely need an ITIN. This is true even if you owe no tax.
- Claiming Tax Treaty Benefits: If you are a non-resident alien receiving certain types of U.S. income that are subject to withholding tax, you may need an ITIN to claim reduced withholding rates under an applicable tax treaty between the U.S. and your country of residence. You'll typically use Form W-7 to apply for the ITIN concurrently with your tax return claiming these benefits.
- Withholding on Certain Income: Certain types of income paid to foreign persons are subject to U.S. tax withholding. If you need to file a return to claim a refund of excess withholding or to report income not subject to withholding, an ITIN is necessary.
- U.S. Business Activities: If you are engaged in business in the U.S. and need to file specific tax forms. For instance, if you are a foreign owner of a U.S. LLC and have specific reporting requirements, you might need an ITIN. This can include filing Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business) and Form 1120-F (U.S. Income Tax Return of a Foreign Corporation) if applicable. Even if you don't have direct income, certain ownership structures may trigger reporting obligations that necessitate an ITIN. Setting up a U.S. LLC is a common first step for many foreign nationals looking to establish a business presence, and the subsequent tax and reporting requirements often lead to the need for an ITIN.
- Opening a U.S. Bank Account: While not a direct U.S. tax filing requirement, some U.S. banks require an ITIN to open business or personal accounts for non-residents without an SSN. This is particularly true for business accounts, especially when establishing a U.S. LLC. While some banks might accept other forms of identification, an ITIN is often a preferred or mandatory document. This can be a critical step for managing finances related to U.S. business activities. Several modern fintech banks like Mercury, Relay, or Brex specifically cater to startups and international founders, and while they may have their own identification requirements, an ITIN can facilitate the process.
- Applying for an EIN: Generally, you do not need an ITIN to apply for an Employer Identification Number (EIN), also known as Form SS-4. An EIN is for business entities, not individuals. However, if you are an individual who is operating a business as a sole proprietor (and thus would file using your SSN or ITIN) and you need an EIN for that business, you would apply for the EIN first. If you are a foreign individual without an SSN and need an ITIN to file a personal tax return related to that business, the ITIN application would follow the need to file the return. The IRS documentation for Form SS-4 states that foreign applicants without an SSN can use their foreign taxpayer identification number. If you don't have one, you may need an ITIN in specific circumstances to complete the Form SS-4 application, though this is less common than needing an ITIN for income tax filing.
It's important to understand that an ITIN is solely for tax purposes. It does not authorize employment in the U.S. or provide eligibility for Social Security benefits.
Who Qualifies for an ITIN
Eligibility for an ITIN is based on your need to comply with U.S. tax laws and your inability to obtain an SSN. The IRS specifically outlines categories of individuals who require an ITIN. These include:
- Non-resident aliens who need to file a U.S. tax return or claim a treaty benefit.
- U.S. resident aliens (based on the substantial presence test or green card test) who are not eligible for an SSN.
- Dependents or other individuals who may be claimed on a U.S. federal tax return but do not have and cannot get an SSN.
- Spouses and dependents of U.S. citizens or resident aliens who are non-resident aliens and need to file a tax return or claim a treaty benefit.
If you are a foreign national planning to conduct business in the U.S., such as forming a U.S. LLC or seeking investment, you will likely encounter situations where an ITIN is necessary for tax compliance or financial operations. The application for an ITIN, Form W-7, is the key document. You can learn more about the ITIN application service on our ITIN application service page.
Documents Required for an ITIN Application
To apply for an ITIN, you must submit Form W-7, Application for IRS Individual Taxpayer Identification Number. Along with the completed form, you need to provide original documentation or certified copies of documents that verify your identity and foreign status. The primary documents required are:
- Proof of Identity: This must be a valid, unexpired government-issued identification document. Examples include:
- Passport (most commonly used and preferred)
- National Identity Card
- Driver's License
- Foreign Military Identification Card
- U.S. Military Identification Card
- Foreign Voter's Registration Card
- Civilan I.D. card (Mexico and Canada only)
- State-issued I.D. card
- Proof of Foreign Status: This document must establish that you are a non-resident alien or, if you are a resident alien, that you are not eligible for an SSN. Often, the same document used for identity verification also serves this purpose (e.g., a passport). If not, you may need a second document.
Some of the most common documents submitted are passports for both identity and foreign status verification. If your passport is submitted as proof, you generally do not need to submit any other identification documents. However, if you are applying as a dependent and your parent is filing your tax return, you will need to provide your own identification documents. The IRS provides a comprehensive list of acceptable documents in the instructions for Form W-7.
How to Apply for an ITIN
There are three primary ways to submit your Form W-7 application:
- Mail Your Application to the IRS: You can mail your completed Form W-7, along with original or certified copies of your identification documents, and your U.S. federal income tax return (if required) to the IRS address specified in the Form W-7 instructions. This method requires you to mail your original identification documents, which can take several weeks to be returned to you. The IRS processing times can be lengthy, especially during peak tax seasons.
- Apply Through a Certified Acceptance Agent (CAA): This is often the most convenient method. A CAA is an individual or entity authorized by the IRS to help taxpayers apply for ITINs. CAAs can verify your original identification documents and forward your Form W-7 application to the IRS on your behalf. This means you do not have to mail your original documents to the IRS, as the CAA will return them to you immediately after verification. Using a service like itin.net, which provides CAA services, can streamline the process and reduce the risk of mail delays or lost documents. CAAs are trained by the IRS and understand the application requirements thoroughly.
- Visit an IRS Taxpayer Assistance Center (TAC): Some IRS TACs offer ITIN application services by appointment. You must call to schedule an appointment and bring your original identification documents with you. However, not all TACs provide this service, and availability can be limited. You will need to verify with your local TAC if they can assist with ITIN applications.
For most applicants, especially those outside the U.S., applying through a CAA is the recommended path. It offers a secure and efficient way to obtain your ITIN without the risk of mailing original documents.
ITIN Processing Time and Costs
The IRS does not charge a fee to apply for an ITIN. However, if you use a Certified Acceptance Agent (CAA) like itin.net, there may be a service fee charged by the agent. This fee is for the agent's service in verifying your documents and processing your application, not for the ITIN itself.
Processing times can vary significantly depending on the volume of applications the IRS is receiving. Historically, ITIN applications have taken anywhere from 4 to 11 weeks to process when submitted directly to the IRS. During peak tax seasons (January through April), processing times may be longer. Applications submitted through a CAA may sometimes see slightly faster initial processing if the CAA is efficient, but the ultimate IRS processing time remains the same. It is advisable to apply well in advance of any tax filing deadlines.
If you are applying to claim tax treaty benefits or a refund of excess withholding, your tax return must be filed by the deadline to receive those benefits. If you file your return without an ITIN, you may miss the deadline. In such cases, you can file your return, and the IRS will typically process it and issue your ITIN. However, if you need the ITIN for other reasons, such as opening a bank account, you must wait for it to be issued before proceeding.
Common Mistakes When Applying for an ITIN
Several common errors can cause delays or rejections of your Form W-7 application. Being aware of these can help ensure a smoother process:
- Incomplete Form W-7: Ensure all sections of the form are filled out accurately and completely. Missing information or illegible entries are frequent causes of rejection.
- Incorrect or Missing Identification Documents: Failing to provide valid, unexpired identification documents or not providing the required number of documents can lead to delays. Ensure your documents meet the IRS criteria for identity and foreign status verification.
- Not Submitting a Tax Return (When Required): If your ITIN application is based on needing to file a U.S. tax return (e.g., Form 1040-NR), you must submit that return with your Form W-7. If the application is for treaty benefits or a refund, the return claiming those benefits must be included. If you are applying solely to meet other IRS requirements (like for certain business reporting or bank account needs), you may not need to submit a tax return with the initial Form W-7, but you must still meet the criteria of having a tax reporting need.
- Using Expired Identification: All identification documents must be valid and unexpired at the time of application.
- Mailing Original Documents (Risk of Loss): While a valid method, mailing original passports or other vital documents carries the risk of them being lost or stolen in transit. Using a CAA mitigates this risk.
- Incorrectly Certified Copies: If you obtain certified copies of documents from a source other than the issuing agency, they may not be accepted. It is best to use original documents or certified copies from the issuing authority.
Understanding the requirements for "itin when started" also involves understanding how to complete the application correctly to avoid these pitfalls.
What Happens After You Get Your ITIN
Once your ITIN application is approved, the IRS will mail you a notice, CP-565, which officially assigns your ITIN. This notice will contain your nine-digit ITIN. You should keep this notice and your ITIN in a safe place, as you will need it for all future U.S. tax filings.
Your ITIN is permanent and does not expire. However, it may become inactive if you do not file a U.S. tax return for three consecutive years, or if it is used on a tax return that is not filed by the responsible taxpayer. The IRS may also issue new ITINs to individuals who already have one if certain conditions are met, such as a change in their tax status or filing requirements. If your ITIN becomes inactive, you will need to reapply by submitting Form W-7 again.
After receiving your ITIN, you may need to take further steps depending on your situation:
- Filing Subsequent Tax Returns: You will use this ITIN on all future U.S. tax returns you file.
- Business Operations: If you are operating a U.S. LLC or other business, you will use your ITIN for tax filings related to that business, such as Form 5472. You may also need to ensure your EIN is correctly associated with your business operations and personal tax filings.
- Banking: If you applied for an ITIN to open a U.S. bank account, you can now proceed with opening the account using your assigned ITIN.
Getting Help with Your ITIN Application
Navigating the ITIN application process can be complex, especially for individuals unfamiliar with U.S. tax procedures. Several resources are available to assist you:
- IRS Resources: The IRS website (IRS.gov) provides detailed instructions for Form W-7 and other relevant tax forms. Publication 1915, Guide to Obtaining a Social Security Number and ITIN, is also a valuable resource.
- Certified Acceptance Agents (CAAs): As mentioned, CAAs are authorized by the IRS to help with ITIN applications. They can guide you through the process, verify your documents, and submit your application. itin.net, for example, offers these services to help individuals worldwide obtain their ITINs efficiently and securely.
- Tax Professionals: A qualified tax professional or CPA experienced in international taxation can provide personalized advice and assistance with your ITIN application and related tax filings. This is especially recommended if your tax situation is complex or involves significant U.S. business activities.
Choosing the right path for your ITIN application depends on your comfort level with the process and your specific circumstances. For many, especially those outside the U.S., leveraging the expertise of a Certified Acceptance Agent provides the most reliable and secure method to start the ITIN process. You can find more information about ITIN services and related tax matters on our blog or Q&A index.