Gokce Tandogdu
ITIN Specialist, itin.net
Individuals who do not have a Social Security number (SSN) and are required to file U.S. federal income tax returns or have other U.S. tax obligations use an ITIN. This includes many non-resident aliens, resident aliens (who are not eligible for an SSN), and others who need to comply with U.S. tax law but cannot obtain an SSN.
Who is Required to Obtain an ITIN?
Most individuals who use an ITIN are required to do so because U.S. tax law mandates it. You need an ITIN if you are a foreign national and:
- You are filing a U.S. federal income tax return, such as Form 1040-NR (U.S. Nonresident Alien Income Tax Return), and you are not eligible for an SSN. This is common for individuals earning U.S. source income but not working in the U.S. in a capacity that grants SSN eligibility.
- You are a dependent or spouse of a U.S. citizen or resident alien filing a U.S. tax return, and you do not have an SSN. In this case, the primary filer may need to obtain an ITIN for you to claim you as a dependent or to file jointly.
- You are a nonresident alien claiming tax treaty benefits on U.S. income. Many tax treaties require you to have an ITIN to claim reduced withholding rates on certain types of income (e.g., dividends, royalties, interest).
- You are a nonresident alien or resident alien (not eligible for an SSN) who has other U.S. tax reporting requirements. This can include reporting under the Foreign Account Tax Compliance Act (FATCA) or the Internal Revenue Code.
- You are an individual who will be making U.S. tax elections or are subject to U.S. tax laws, even if you do not have U.S. source income. For example, if you are a partner in a U.S. partnership or a beneficiary of a U.S. estate or trust, you may need an ITIN.
- You are a foreign national who owns a U.S. business, such as a U.S. LLC, and you need to file informational returns like Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business). This form is crucial for reporting transactions between the foreign owner and the U.S. entity.
- You are seeking to open a U.S. bank account and the bank requires a Taxpayer Identification Number (TIN) but you are not eligible for an SSN. While not all banks require a TIN for non-resident account opening, some do.
Who is NOT Eligible for an SSN and Therefore May Need an ITIN?
An SSN is issued by the Social Security Administration (SSA) and is primarily for individuals authorized to work in the United States. If you are not authorized to work in the U.S., you generally cannot get an SSN. This category includes:
- Non-resident aliens who are not authorized to work in the U.S. but have U.S. tax filing obligations or need to claim treaty benefits.
- Resident aliens (individuals who meet the substantial presence test or green card test) who are not authorized to work in the U.S. and thus not eligible for an SSN. This is a less common scenario but can occur for individuals on certain visa types or with specific immigration statuses.
- Dependents of U.S. taxpayers who are foreign nationals and not eligible for an SSN.
In essence, anyone who needs to interact with the IRS for tax purposes and lacks an SSN will need an ITIN. The question of "who uses itin" directly addresses this need for a U.S. tax identification number in the absence of an SSN.
What is the Purpose of an ITIN?
The primary purpose of an ITIN is to provide a tax processing number for individuals who are not eligible for an SSN. It allows the IRS to track tax filings and payments for these individuals. An ITIN does not:
- Grant work authorization in the United States.
- Make an individual eligible for Social Security benefits.
- Provide eligibility for the Earned Income Tax Credit (EITC), unless specific IRS criteria are met for ITIN filers.
However, an ITIN is essential for:
- Fulfilling U.S. tax obligations accurately and avoiding penalties.
- Claiming tax treaty benefits, which can significantly reduce U.S. tax liability on certain income.
- Facilitating business transactions in the U.S. that require a TIN, such as forming a U.S. LLC or opening certain business accounts.
- Allowing U.S. taxpayers to claim foreign dependents or spouses on their tax returns.
How Do You Obtain an ITIN?
To obtain an ITIN, you must apply for one by completing Form W-7, Application for IRS Individual Taxpayer Identification Number. You can apply for an ITIN in several ways:
- Mail-in Application: You can mail your completed Form W-7, along with original identification documents or certified copies from the issuing agency, and a U.S. federal income tax return (or other required tax forms) to the IRS at the address specified in the Form W-7 instructions.
- In-Person Application at IRS Taxpayer Assistance Centers (TACs): Some IRS TACs offer ITIN application services by appointment. You must bring your original documentation or certified copies to verify your identity and nationality.
- Through a Certified Acceptance Agent (CAA): This is often the most convenient method. A CAA is an individual or entity, such as itin.net, that has been authorized by the IRS to help taxpayers apply for ITINs. CAAs can review your documentation, help complete the Form W-7, and forward your application package to the IRS. Crucially, CAAs can often verify your original identification documents, meaning you do not have to mail them to the IRS, reducing the risk of loss and speeding up the process.
When applying, you will need to provide proof of your identity and foreign status. Accepted documents include passports, national identity cards, driver's licenses, and birth certificates. Your passport is generally the preferred document as it proves both identity and nationality.
What Documents Are Required for an ITIN Application?
To apply for an ITIN, you must submit Form W-7 along with:
- A U.S. federal income tax return: This is typically required unless you qualify for an exception (e.g., certain treaty benefits, specific reporting requirements without filing a full return). The tax return must be complete and accurate.
- Original identification documents or certified copies from the issuing agency: You need to provide proof of your identity and foreign status. The IRS generally prefers a passport as it serves as both. If you do not have a passport, you can use a combination of other documents, such as a national identity card, U.S. driver's license, foreign driver's license, U.S. state-issued ID card, civil birth certificate (for dependents under 18), or foreign military identification card.
If you are applying through a Certified Acceptance Agent (CAA), they will review your original documents and then return them to you. If you mail your documents directly to the IRS, they will be returned to you after processing, which can take several weeks. It is advisable to use certified copies from the issuing agency if you cannot part with your original documents for an extended period.
What is the Processing Time for an ITIN?
Processing times for ITIN applications can vary significantly. Currently, the IRS reports that it can take up to 11 weeks to receive your ITIN after submitting a complete application. This timeframe can increase during peak tax seasons (January to April) or if there are errors or missing information in your application. If you are mailing your application, you must also account for the time it takes for your tax return to be processed by the IRS.
Applying through a Certified Acceptance Agent (CAA) can sometimes expedite the process, as they can ensure your application is complete and correctly submitted. However, the final issuance of the ITIN is still handled by the IRS.
Can an ITIN Expire?
Yes, an ITIN can expire. The IRS has implemented a renewal process for ITINs that have not been used on a federal tax return for three consecutive tax years. Additionally, the IRS may designate certain ITINs for renewal based on specific criteria. If your ITIN has expired and you still have U.S. tax obligations, you must renew it by submitting Form W-7 again, along with a U.S. tax return and updated identification documents.
Who Else Uses ITINs for Tax Purposes?
Beyond individuals filing their own tax returns, ITINs are used by:
- Dependents and Spouses: As mentioned, U.S. citizens and resident aliens may need an ITIN for their foreign-born dependents or spouses to be included on their tax returns.
- Partners and Beneficiaries: Foreign individuals who are partners in U.S. partnerships or beneficiaries of U.S. estates or trusts often require an ITIN to report their share of income or distributions on their own tax returns.
- Business Owners: Foreign nationals who own or operate U.S. businesses, especially those structured as a U.S. LLC, will likely need an ITIN for themselves or for the entity's reporting requirements (e.g., Form 5472).
- Individuals Opening U.S. Bank Accounts: While not a universal requirement, some U.S. financial institutions request an ITIN from non-residents who cannot provide an SSN when opening a U.S. bank account. This allows the bank to comply with IRS reporting requirements. Services like Mercury, Relay, or Brex may have specific TIN requirements for non-resident founders.
Ultimately, anyone who is subject to U.S. tax law and is not eligible for an SSN will likely encounter the need for an ITIN. It serves as the critical link for the IRS to identify and process tax information for a significant portion of the international community interacting with the U.S. tax system.
For those planning to establish a U.S. business, obtaining an ITIN may be a preliminary step before securing an Employer Identification Number (EIN), which is required for most business operations. You can learn more about applying for an EIN on our /ein page.