Gokce Tandogdu
ITIN Specialist, itin.net
An ITIN stands for Individual Taxpayer Identification Number. It is a tax processing number issued by the U.S. Internal Revenue Service (IRS) to individuals who are neither eligible for a Social Security number (SSN) nor have one, but who require a U.S. taxpayer identification number for tax purposes.
What is an ITIN?
The ITIN is a nine-digit number that always begins with the number 9, has a 7 or 8 in the fourth digit, and ends with a 4. The format is 9XX-7X-XXXX or 9XX-8X-XXXX. The IRS issues ITINs 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. This includes many non-resident aliens who have U.S. tax filing or reporting obligations, such as receiving U.S. source income, or resident aliens (under specific IRS definitions) who are not eligible for an SSN.
Who Needs an ITIN?
Individuals who need an ITIN generally fall into several categories:
- Non-resident aliens who must file a U.S. tax return and are not eligible for an SSN. This is common for individuals earning income from U.S. sources, such as freelance work, rental income, or business profits, where U.S. tax must be paid.
- Resident aliens (as defined by U.S. tax law) who are not eligible for an SSN and must file a U.S. tax return. This can include individuals who meet the substantial presence test but are ineligible for an SSN due to immigration status.
- Dependents or spouses of U.S. citizens or resident aliens who are not eligible for an SSN and are claimed on a U.S. federal income tax return.
- Dependents or spouses of non-resident alien visa holders who are not eligible for an SSN and are claimed on a U.S. federal income tax return.
- Individuals applying for an ITIN for various tax treaty benefits. Some tax treaties allow certain non-resident aliens to claim reduced rates on U.S. source income. To claim these benefits, an ITIN is often required, even if no tax return is otherwise due.
- Individuals who need to open a U.S. bank account and are not eligible for an SSN. While not a strict IRS requirement for banking, many U.S. financial institutions require a U.S. taxpayer identification number, and an ITIN often serves this purpose. This can be crucial for non-residents looking to establish financial ties in the U.S.
- Individuals forming a U.S. LLC or other business entity. While an Employer Identification Number (EIN) is typically required for business operations, an ITIN may be needed for the non-resident owner's personal tax filings related to the business income or if the LLC requires a U.S. taxpayer identification for certain purposes.
It's important to understand that an ITIN is solely for tax reporting and identification purposes. It does not authorize employment in the U.S., provide eligibility for Social Security benefits, or grant any immigration status.
How Do You Get an ITIN?
To obtain an ITIN, you must apply using IRS Form W-7, Application for IRS Individual Taxpayer Identification Number. The application requires you to provide proof of your identity and foreign status. You can submit your application through several methods:
- Mail: 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, to the IRS address specified in the Form W-7 instructions. The IRS will review your application and return your original documents, usually within 60 days.
- IRS Taxpayer Assistance Center (TAC): You can schedule an appointment at a designated IRS TAC to apply in person. You must bring your original identification documents or certified copies from the issuing agency. The IRS will verify your documents and forward your application to the ITIN processing center.
- Through a Certified Acceptance Agent (CAA): This is often the most convenient method. CAAs are individuals or entities authorized by the IRS to help taxpayers apply for ITINs. They can verify your original identification documents, reducing the risk of them being lost or delayed in the mail. The CAA submits the W-7 application and your certified documents directly to the IRS. itin.net is a service that can assist you in finding a CAA or guiding you through the application process if you choose to handle it yourself.
When applying for an ITIN, you must typically file a U.S. federal income tax return for the year for which the ITIN is needed, unless you qualify for an exception (such as applying to claim treaty benefits or if you are a dependent). The tax return is filed concurrently with the Form W-7, or in advance if you are seeking an ITIN solely for treaty benefits.
What Documents Are Required for an ITIN?
To apply for an ITIN, you must provide proof of identity and foreign status. The IRS accepts a combination of original documents or certified copies from the issuing agency. The most commonly accepted documents are:
- Passport: This is the preferred document as it serves as both proof of identity and foreign status.
- National Identity Card: A card issued by your country of citizenship that contains your photograph, name, address, date of birth, and expiration date.
- Birth Certificate: For dependents under 18, a birth certificate can be used.
- Foreign Driver's License: A driver's license issued by a foreign government.
- Foreign Military Identification Card: Issued by a foreign military authority.
- U.S. Military Identification Card: For military personnel.
- Visa: Foreign visas.
- U.S. State Identification Card: If the applicant is a resident alien.
- Foreign Voter's Registration Card: If applicable in your country.
- Medical Records: For dependents under 6 years of age (if not available, other documents are required).
- School Records: For dependents under 18 years of age (if not available, other documents are required).
If you are applying by mail or through a TAC, you must submit original documents or certified copies from the issuing agency. If you use a CAA, they will verify your original documents and return them to you on the spot. The CAA then sends certified copies to the IRS. Using a CAA can provide peace of mind that your original documents will not be lost in transit.
How Long Does It Take to Get an ITIN?
The processing time for an ITIN application can vary significantly. Generally, the IRS aims to process applications within 6 to 11 weeks from the date they are received. However, this timeframe can be longer during peak tax seasons (January to April) or if there are any discrepancies or missing information in your application.
- Mail Applications: These can take the longest due to mail delivery times and IRS processing backlogs. Expect at least 6-11 weeks, potentially more during busy periods.
- TAC Appointments: If you apply at a TAC, your application is forwarded to the ITIN processing center. The timeline is similar to mail applications once it reaches the center.
- Certified Acceptance Agents (CAAs): Applications submitted through CAAs are often processed slightly faster as the CAAs are experienced in submitting complete applications, reducing the chance of delays due to errors.
It is advisable to apply for an ITIN well in advance of any tax filing deadlines to avoid last-minute complications. If you are applying in conjunction with filing a tax return, ensure you submit both the Form W-7 and the tax return together.
What If My ITIN Expires?
ITINs do not automatically expire. However, the IRS has a policy that ITINs not used on a federal tax return for three consecutive tax years will be deactivated. Additionally, the IRS may issue new ITINs with a different fourth digit in the sequence (e.g., 9XX-7X-XXXX or 9XX-8X-XXXX) to manage the numbering system. If your ITIN has been deactivated due to non-use, or if you receive a notice from the IRS about an issue with your ITIN, you will need to reapply using Form W-7 and provide updated identification documents.
If your ITIN has been deactivated, you will need to go through the application process again. This involves submitting a new Form W-7, along with updated proof of identity and foreign status, and usually a tax return for the year you need the ITIN. The process and timelines are the same as for a first-time applicant. It is crucial to use your ITIN regularly on your tax filings if you wish to keep it active.
Common Mistakes When Applying for an ITIN
Several common mistakes can lead to delays or rejections of your ITIN application:
- Incomplete or Incorrect Information on Form W-7: Ensure all fields are filled out accurately. Double-check names, addresses, dates of birth, and identification numbers.
- Missing or Invalid Identification Documents: Not providing the correct combination of documents or failing to provide original or certified copies can cause issues. Using expired documents is also a common pitfall.
- Not Filing a Tax Return (When Required): For most applicants, an ITIN is issued only when a corresponding tax return is filed. If you are not eligible for an exception and do not include a tax return, your application will likely be rejected.
- Submitting Copies Instead of Originals or Certified Copies: Unless applying through a CAA, the IRS requires original documents or certified copies from the issuing agency. Photocopies are generally not accepted.
- Incorrectly Claiming Treaty Benefits: If applying for an ITIN to claim treaty benefits, ensure you meet all the specific requirements for that treaty and are filing the correct tax forms (e.g., Form 1040-NR or 8833).
- Delaying Application: Waiting until the last minute to apply can lead to missing deadlines for tax filings or other financial obligations. Applying early in the year is recommended.
ITIN vs. EIN
It is important to distinguish an ITIN from an Employer Identification Number (EIN). An EIN, also known as an Employer Identification Number or Form SS-4 number, is a nine-digit number assigned by the IRS to business entities operating in the United States. It is used for tax purposes for businesses, corporations, partnerships, and sole proprietorships that have employees or operate as certain other types of businesses. While an ITIN is for individuals, an EIN is for businesses. If you are establishing a U.S. business, such as a U.S. LLC, you will likely need an EIN, not an ITIN, for the business itself. You might need an ITIN as an individual owner of the LLC if you have personal U.S. tax obligations. You can learn more about obtaining an EIN on our /ein page.
Next Steps for Non-Residents
Obtaining an ITIN is often a foundational step for non-residents engaging with the U.S. financial and tax system. Beyond tax filing, an ITIN can be instrumental for non-residents looking to:
- Open a U.S. bank account: Many banks require a U.S. taxpayer identification number, and an ITIN can fulfill this requirement, facilitating easier financial transactions and management of U.S. source income. This is particularly useful for individuals who frequently conduct business in the U.S. or are considering a move. For information on opening accounts with providers like Mercury, Relay, or Brex, visit our /bank-account page.
- Form a U.S. LLC: Non-residents often form a U.S. LLC to conduct business in the U.S. While the LLC itself will need an EIN, the non-resident owner may need an ITIN for personal tax reporting related to the LLC's profits or if they have other U.S. tax obligations. More details on forming a U.S. LLC can be found on our /llc page.
- File U.S. Tax Returns: As discussed, the primary purpose of an ITIN is to comply with U.S. tax laws. This includes filing forms like Form 1040-NR for non-resident aliens or Form 5472 for reporting transactions with a foreign-owned U.S. disregarded entity or partnership.
Understanding what an ITIN stands for is the first step. The subsequent steps involve ensuring you meet the application requirements and follow the correct procedures to secure this essential tax identification number. For more in-depth information on ITINs and related U.S. tax matters, you can explore our /qa section or consult with a tax professional.