Gokce Tandogdu
ITIN Specialist, itin.net
An ITIN is a nine-digit number, beginning with the number 9, that is formatted like a Social Security number (SSN) but always starts with the digits 90, 91, 92, or 94. The IRS issues ITINs to individuals who are not eligible for an SSN and need a U.S. taxpayer identification number for tax purposes. This includes non-resident aliens filing U.S. tax returns, resident aliens filing U.S. tax returns, dependents claimed on U.S. tax returns, and spouses of U.S. citizens or resident aliens. The IRS issues ITINs solely for federal tax reporting purposes. An ITIN does not authorize employment in the U.S., provide eligibility for Social Security benefits, or serve as a replacement for an SSN. Understanding what is itin on tax return is the first step for many foreign nationals planning to engage with the U.S. tax system.
Who Needs an ITIN?
An ITIN is required for any individual who must file a U.S. federal tax return but cannot obtain an SSN. This broad category includes several distinct groups:
- Non-resident aliens who are required to file a U.S. tax return: This is the most common group. Examples include foreign nationals earning U.S.-sourced income (e.g., from investments, rental properties, or business activities) that is subject to U.S. tax. They will typically file Form 1040-NR, U.S. Nonresident Alien Income Tax Return.
- Resident aliens filing a U.S. tax return: While most resident aliens are eligible for an SSN, some may not be. In such cases, an ITIN is used for filing their U.S. tax return, typically Form 1040, U.S. Individual Income Tax Return.
- Dependents and Claimants: Individuals claimed as dependents or on a tax return (e.g., a spouse) who do not have and are not eligible for an SSN must also have an ITIN. This applies even if they do not file a tax return themselves.
- Individuals claiming tax treaty benefits: Non-resident aliens who are entitled to claim tax treaty benefits (e.g., reduced withholding on certain types of income) must generally have an ITIN to claim these benefits on their tax return. For example, if a foreign national has U.S. rental income and wants to claim a reduced tax rate under a tax treaty, they will need an ITIN.
- Students, professors, or researchers on visas: J-1 visa holders (and their dependents) who are not employed by a U.S. institution and are not eligible for an SSN may need an ITIN to file U.S. tax returns if they have U.S. income. F-1 visa students who are required to file a tax return (e.g., for scholarship income or treaty benefits) and are not eligible for an SSN also need an ITIN.
It is important to note that an ITIN is strictly for tax processing. It does not grant work authorization, eligibility for Social Security benefits, or any other privileges associated with an SSN.
How Do You Get an ITIN?
The primary method for obtaining an ITIN is by filing Form W-7, Application for IRS Individual Taxpayer Identification Number. This form requires you to provide your name, address, and foreign tax identification number (if applicable). Crucially, you must also submit original documentation or certified copies of documents to prove your identity and foreign status. The IRS allows several ways to submit the Form W-7 and supporting documents:
1. Mail Your Application Directly to the IRS
You can mail your completed Form W-7, along with original or certified copies of your identification documents and a U.S. federal income tax return (or other tax documents as required), to the IRS address listed in the Form W-7 instructions. This is the most common method but also the slowest, as the IRS processes these applications in batches.
2. Apply Through a Certified Acceptance Agent (CAA)
This is often the most convenient and secure method. A Certified Acceptance Agent (CAA) is an individual or entity (like itin.net) authorized by the IRS to help taxpayers apply for ITINs. CAAs can verify your original identification documents and transmit your Form W-7 application to the IRS on your behalf. The key benefit is that you do not have to mail your original documents to the IRS; the CAA will return them to you after verification. This significantly reduces the risk of losing important personal documents. Applying through a CAA can expedite the initial processing of your application, as they are trained to ensure all forms are correctly filled out and all necessary documents are included.
3. Visit an IRS Taxpayer Assistance Center (TAC)
Some IRS Taxpayer Assistance Centers offer ITIN application services by appointment. You will need to bring your original identification documents and your completed Form W-7 to the appointment. However, availability can be limited, and not all TACs provide this service. It is essential to check with your local IRS TAC to confirm services and schedule an appointment.
What Documents Are Needed for an ITIN?
To apply for an ITIN, you must provide documentation to prove your identity and foreign status. The IRS requires one of the following combinations of documents:
- Option 1: A passport. If you submit a passport, it can serve as both your identity and foreign status document. If the passport is not from your country of citizenship, you must also submit a secondary identification document.
- Option 2: Two original secondary identification documents from the list provided in the Form W-7 instructions. These documents must contain your name, photograph, address, date of birth, and be current (not expired).
Commonly accepted secondary identification documents include:
- National identification card (must have photo, name, address, DOB, expiration date)
- Civil birth certificate (must have name, DOB, place of birth, and be certified)
- Foreign driver's license (must have photo, name, address, DOB, expiration date)
- U.S. state identification card
- Foreign voter's registration card
- Visa
- U.S. Citizenship and Immigration Services (USCIS) photo identification
- Medical records (for dependents under age 6)
- School records (for dependents under age 18, or under age 24 if a student)
Important: All documents must be current (not expired) and in the applicant's name. If the name on your identification document is different from the name on your Form W-7 (e.g., due to marriage or divorce), you must submit a legal name change document (like a marriage certificate or court order) as proof.
If you are applying as a dependent, you will also need to provide documentation proving your relationship to the person claiming you on their tax return (e.g., a birth certificate showing parentage). If the applicant is not the person filing the return, the filer must also provide their own identification documents.
How Long Does It Take to Get an ITIN?
The processing time for an ITIN application can vary significantly depending on the method of application and the current workload of the IRS. Generally:
- Mail-in Applications: These are the slowest. It can take anywhere from 8 to 11 weeks from the date the IRS receives your application for them to process it and issue an ITIN. This timeframe does not include the time it takes for your documents to be mailed to the IRS and for the IRS to mail your ITIN back to you.
- Certified Acceptance Agent (CAA) Applications: Applying through a CAA can sometimes expedite the initial review process. While the IRS still needs to issue the ITIN, CAAs are trained to ensure applications are complete, reducing the chances of delays due to errors. The overall processing time by the IRS is typically similar to mail-in applications, but the initial submission and verification by the CAA are more efficient.
- IRS Taxpayer Assistance Center (TAC) Applications: If you can secure an appointment, this method can be faster as the verification of documents is done on the spot. However, the IRS still needs to process the application internally, which can take several weeks.
During peak tax filing seasons (January through April), processing times may be longer. It is advisable to apply for an ITIN well in advance of any tax filing deadlines.
What Happens After You Get an ITIN?
Once you receive your ITIN, usually in the form of a notice from the IRS (commonly CP-565), you can use it to file your U.S. federal income tax return. If you applied for an ITIN because you needed it to claim benefits on a tax return (like treaty benefits), you must file that return within the specified deadline. If you applied for an ITIN in anticipation of needing one for future tax filings or other U.S. financial activities, you should keep it in a safe place.
Filing U.S. Tax Returns
If you are required to file a U.S. tax return (e.g., Form 1040-NR), you will enter your ITIN in the designated space on the form. If you are filing as an individual and are not required to file a separate return but are being claimed as a dependent or spouse, your ITIN will be entered on the primary filer's return.
U.S. Business and Banking Needs
While an ITIN is primarily for tax purposes, it can be a foundational step for non-residents looking to establish a U.S. business presence. For instance, if you form a U.S. LLC, you will often need an EIN (Employer Identification Number) for your business, which is obtained by filing Form SS-4 with the IRS. Although an ITIN is not required to apply for an EIN, it can be helpful in some scenarios. Many non-residents use their ITIN to open a U.S. bank account, which is often a prerequisite for conducting business or managing investments effectively. Services like Mercury, Relay, or Brex may have specific requirements, but having an ITIN can sometimes simplify the process, especially if you are also establishing a U.S. business entity.
ITIN Renewal
ITINs do not expire in the traditional sense, but they can become inactive. The IRS has a policy for renewing ITINs that have not been used on a federal tax return for three consecutive tax years. If your ITIN becomes inactive, you will need to renew it by submitting a renewal application (Form W-7) along with a valid tax return for which you need the ITIN. The IRS typically notifies taxpayers if their ITIN is subject to renewal. Some ITINs with middle digits of 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, or 89 have already expired and require renewal. If you have an older ITIN, it's wise to check its status.
Common Mistakes When Applying for an ITIN
Several common errors can lead to delays or rejections of your Form W-7 application. Being aware of these can save you significant time and frustration:
- Missing or Incorrect Identification Documents: Submitting expired documents, documents that do not meet the IRS requirements (e.g., missing a photo or required information), or failing to submit the correct number of documents are frequent issues. Always double-check the IRS list of acceptable documents.
- Incomplete or Incorrectly Filled Form W-7: Missing information, incorrect spelling of names, or errors in address details can cause problems. Ensure all fields are accurately completed.
- Failure to Include a Tax Return: Unless you are applying under specific exceptions (like being a dependent or claiming treaty benefits without needing to file a return yourself), you generally must submit a valid U.S. federal income tax return with your Form W-7. Ensure the tax return is complete and signed.
- Not Submitting Original or Certified Copies: If you are not using a CAA, you must send original documents or certified copies from the issuing agency. Photocopies are not accepted unless certified by the issuing agency.
- Not Updating Address with the IRS: If you move after applying, ensure you update your address with the IRS so you can receive your ITIN notice and any other important correspondence.
When to Seek Professional Help
While the process for obtaining an ITIN is designed to be accessible, complex situations may warrant professional assistance. If you are unsure about your U.S. tax obligations, the correct documentation to provide, or how to handle specific tax treaty benefits, consulting a tax professional experienced with non-resident taxation is advisable. For those forming a U.S. LLC or needing an EIN, professional guidance can be invaluable. Additionally, if you encounter issues with your ITIN application or require assistance with ongoing tax filings, a qualified tax advisor or an authorized Certified Acceptance Agent can provide tailored support. For specific questions about your unique circumstances, it is always best to consult a qualified tax professional or attorney.
Understanding what is itin on tax return is a critical first step for many non-residents and foreign nationals. The ITIN serves as a vital identification number for tax administration in the United States, enabling individuals to comply with U.S. tax laws while potentially accessing benefits and financial services.