What is an ITIN? A Complete Guide
You must pay taxes if you intend to work in the United States. If you are not eligible for a Social Security Number (SSN), you will need an Individual Taxpayer Identification Number (ITIN) to meet federal tax requirements.
The Internal Revenue Service (IRS), which collects and processes taxes in the United States, issues ITINs. An ITIN is a nine-digit number that always begins with the number nine and ends with either a seven or an eight. This number ensures that you comply with U.S. tax laws and allows the IRS to efficiently process your tax returns and payments.
If you do not have an SSN and are not eligible for one but are required to file a federal income tax return, you must obtain an ITIN. To qualify, you must fall under one of the following categories.
- Foreign nationals who are residents of the United States and are required to file a U.S. tax return.
- Non-resident foreign nationals who must file a tax return in the United States.
- Non-resident foreign nationals claiming a tax treaty benefit.
- Resident or non-resident foreign nationals who cannot be claimed as dependents by a U.S. citizen.
- Foreign national spouses who can be claimed as dependents on a U.S. tax return but are not filing their own return.
- Resident or non-resident foreign nationals married to a U.S. citizen and filing a joint federal tax return.
- Non-resident professors, students, and researchers filing a federal tax return or claiming an exemption.
- Foreign nationals who are dependents or spouses of non-resident foreign nationals holding U.S. visas.
What Are the ITIN’s Limitations?
Yes, ITINs have certain restrictions. An ITIN is used only for federal tax purposes and cannot be used for any other form of identification.
- ITIN holders are not eligible for Social Security benefits.
- Eligibility for the Earned Income Tax Credit is not available.
- An ITIN does not authorize employment in the United States.
- You must have a federal tax filing requirement and submit a valid income tax return unless an exception applies.
- ITINs are strictly for tax identification and are not valid for identification purposes.
Despite these limitations, ITIN holders may still qualify for the Child Tax Credit and the Additional Child Tax Credit, depending on their individual circumstances.
When Is the Best Time to Apply for an ITIN?
The best time to apply for an ITIN is when you are ready to file your first federal income tax return. In most cases, your completed tax return must be mailed along with Form W-7 and the required supporting documents. If you qualify for an IRS exception and are not required to file a tax return, you may submit Form W-7 and the supporting documents as soon as you determine your eligibility.