Gokce Tandogdu
ITIN Specialist, itin.net
To apply for an ITIN, you need to submit IRS Form W-7, Application for IRS Individual Taxpayer Identification Number, along with required identification documents and a U.S. federal tax return. This is the core requirement for anyone seeking an ITIN. The question of "what is needed for itin application" is best answered by understanding the specific documentation and procedural steps involved.
Who Is Eligible for an ITIN?
An ITIN is 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). This primarily includes:
- Non-resident aliens who need to file a U.S. tax return, such as those with U.S. source income, or who are claiming tax treaty benefits.
- Resident aliens (based on days present in the U.S.) who are not eligible for an SSN.
- Dependents or spouses of U.S. citizens or resident aliens who need to file a U.S. tax return or claim a tax benefit.
- Individuals who are not U.S. citizens but have U.S. business dealings that require them to file specific tax forms, even if they do not have U.S. residency.
Eligibility hinges on the need to comply with U.S. tax law or claim specific tax benefits, and the lack of an SSN. If you are eligible for an SSN, you must apply for one first. The IRS will not issue an ITIN to individuals eligible for an SSN.
Required Documentation for Your ITIN Application
The primary components of an ITIN application are Form W-7 and supporting documentation. The IRS requires specific items to process your application accurately.
IRS Form W-7
This is the application form itself. It requires personal information, including your name, address, foreign tax identification number (if applicable), and reason for applying for an ITIN. You must complete the form accurately and completely. Any errors or omissions can lead to delays or rejection of your application.
Proof of Identity and Foreign Status
This is a critical part of the application. You must provide original or certified copies of documents that prove both your identity and your foreign status. The IRS will accept a combination of these documents, but you must present at least one document that shows your photograph and another that shows your name and date of birth.
Acceptable original documents include:
- Passport: This is the preferred document as it typically satisfies both identity and foreign status requirements.
- National Identity Card: Must show your name, photograph, date of birth, and expiration date.
- U.S. Driver's License: Must show your name, photograph, date of birth, and expiration date.
- Foreign Driver's License: Must show your name, photograph, date of birth, and expiration date.
- Foreign Military Identification Card: Must show your name, photograph, date of birth, and expiration date.
- Foreign Voters Registration Card: Must show your name, photograph, date of birth, and expiration date.
- Civil Birth Certificate: Must show your name, date of birth, and place of birth. (Not acceptable alone for foreign status if you are not a U.S. national).
- National Health Insurance Card: Must show your name, photograph, date of birth, and expiration date.
- Bank Statement from your country of origin: Must show your name and U.S. address, or foreign address if applying from abroad.
- Foreign and/or U.S. Voter Registration Card: Must show your name, photograph, date of birth, and expiration date.
Important Notes on Documentation:
- Expired Documents: Expired identification documents are generally not accepted, except for U.S. passports and U.S. military identification cards which may be accepted if expired.
- Certified Copies: If you cannot submit originals, you can obtain certified copies from the issuing agency. For example, a passport can be certified by the issuing country's embassy or consulate.
- Specific Combinations: The IRS provides specific guidance on acceptable combinations of documents. For instance, a birth certificate alone is not sufficient to prove foreign status. You always need to prove both your identity and your non-U.S. status.
U.S. Federal Tax Return
In most cases, you must submit a valid U.S. federal income tax return with your Form W-7 application. The ITIN is assigned for tax processing purposes, so the IRS needs to see that you have a tax filing obligation. There are exceptions to this rule:
- Tax Treaty Benefits: If you are claiming tax treaty benefits, you may not need to submit a full tax return, but you will need to provide specific documentation related to the treaty. You will likely need to file Form 1040-NR, U.S. Nonresident Alien Income Tax Return, or a similar form, even if no tax is due.
- Other Exceptions: There are limited exceptions for individuals who are required to have an ITIN for other tax-related reasons, such as reporting income from a U.S. partnership or to comply with Form 5472 requirements for certain foreign-owned U.S. disregarded entities (often related to forming a U.S. LLC).
If you are unsure whether your situation requires a tax return, it is best to consult with a tax professional.
How to Apply for an ITIN
There are two primary methods to apply for an ITIN:
- Directly with the IRS: You can mail your completed Form W-7, original or certified identification documents, and your U.S. federal tax return to the IRS address listed in the Form W-7 instructions. This method can take the longest, as the IRS will mail your original documents back to you after processing.
- Through a Certified Acceptance Agent (CAA): 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 application to the IRS. This is often a faster and more secure method, as you do not have to mail your original documents. The itin.net service is a Certified Acceptance Agent, offering a streamlined process for ITIN applications. This can be particularly beneficial for individuals who are hesitant to mail sensitive identification documents.
IRS Taxpayer Assistance Centers (TACs)
Some IRS Taxpayer Assistance Centers (TACs) offer ITIN application services by appointment. You can bring your completed Form W-7, tax return, and original identification documents to an appointment. The TAC will verify your documents and forward your application to the ITIN processing unit. However, not all TACs provide this service, and appointments can be difficult to secure.
Processing Times and Costs
There is no fee charged by the IRS to apply for an ITIN. However, if you use a CAA or a tax professional, they may charge a service fee for their assistance. These fees vary widely.
Processing times can fluctuate significantly based on the volume of applications the IRS receives. Currently, direct mail applications to the IRS can take 11 weeks or longer to process. Applications submitted through a CAA or TAC may have slightly faster turnaround times for the verification step, but the overall IRS processing time remains the same.
Common Mistakes to Avoid
When preparing your ITIN application, several common errors can lead to delays or rejections:
- Incomplete or Inaccurate Form W-7: Failing to fill out all required fields or providing incorrect information is a primary cause of application issues.
- Missing or Unacceptable Identification Documents: Not providing original or certified copies, or submitting documents that do not meet IRS requirements (e.g., expired documents, or a combination that doesn't prove both identity and foreign status).
- Not Including a Valid U.S. Tax Return: Forgetting to attach the required tax return, or attaching an incomplete or incorrect tax form, is a frequent oversight.
- Incorrect Mailing Address: Sending the application to the wrong IRS address can cause significant delays.
- Failure to Prove Foreign Status: Submitting only documents that prove identity but not foreign status.
Understanding what is needed for itin application also means understanding what not to do. Double-checking all requirements before submission is crucial.
After You Receive Your ITIN
Once your ITIN application is approved, the IRS will mail you a notice, CP-565, Assignment of IRS Individual Taxpayer Identification Number. This notice contains your ITIN. Keep this notice and your ITIN in a safe place. You will need it for all future U.S. tax filings.
Your ITIN is permanent, but it may need to be renewed. The IRS periodically requires individuals with ITINs to renew them, especially if the ITIN has not been used on a federal tax return for three consecutive tax years or if certain digits in the ITIN have expired. The IRS will notify you via mail, typically with notice CP-48, if your ITIN needs renewal.
If you plan to conduct business in the U.S., you may also need an Employer Identification Number (EIN), also known as a Federal Employer Identification Number (FEIN). An EIN is used to identify a business entity. You can apply for an EIN using Form SS-4 through the IRS website or via mail, fax, or phone. Obtaining an EIN is a separate process from obtaining an ITIN, and is required for most business structures, including U.S. LLCs.
Furthermore, if you establish a U.S. business, such as a U.S. LLC, you will likely need to open a U.S. bank account to manage your business finances. Banks often require both an EIN and an ITIN (or SSN) to open an account. Services like Mercury, Relay, or Brex are popular options for non-residents needing U.S. business banking.