Individual Tax Identification Number (ITIN)

Individual Tax Identification Number (ITIN)

The Individual Tax Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS) to ensure that people – including unauthorized immigrants – pay taxes even if they do not have a Social Security number and regardless of their immigration status.1

The ITIN program was created by the IRS in July 1996 so that foreign nationals and others individuals who are not eligible for a Social Security number (SSN) can pay the taxes they are legally required to pay.2

ITIN are not SSNs. The ITIN is a nine-digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, for example 9XX-7X-XXXX.3

People who d not have a lawful status in the United States may obtain an ITIN. In addition, the following people are lawfully in the country and must pay taxes but may not be eligible for SSN and may obtain an ITIN:

  • A non-resident foreign national who owns or invests in a U.S. Business and receives taxable income from that U.S. Business, but lives in another country.
  • A foreign national student who qualifies as a resident of the United States (based on days present in the United States.)
  • A dependent or spouse of a U.S. Citizen or lawful permanent resident.
  • A dependent or spouse of foreign national on temporary visa.4

ITINs do NOT provide legal status or work authorization.

An ITIN does not provide legal immigration status and cannot be used to prove legal presence in the United States.5

An ITIN does not provide work authorization and cannot be used to prove work authorization on an I-9 form.6

ITIN holders pay taxes.

  • ITIN holders are not eligible for all of the tax benefits and public benefits that U.S. Citizens and other taxpayers can receive. For example, an ITIN holder is not eligible for Social Security benefits or the Earned Income Tax Credit (EITC). However, if that person becomes eligible for Social Security in the future (for example, by becoming a lawful permanent resident), the earnings reported with an ITIN may be counted toward the amount he or she is eligible to receive.10
  • ITIN holders are eligible for the Child Tax Credit (CTC). The CTC tax credit may be worth as much as $1,000 per qualifying child, depending upon the applicant’s income. Because ITIN holders are eligible for the CTC, over 4 million U.S. citizen children benefit from the tax credit.11

What other purposes can an ITIN serve?

  • Opening an interest-bearing bank account. Individuals who do not have SNN but do have ah ITIN can open interest-bearing accounts.12
  • Securing a driver’s license. Some states have allowed the ITIN to be used instead of a SSN in order to receive a driver’s license, driver’s permit, or state identification card.13
  • Providing proof of residency.14 At some point in the future an immigrant may need to prove how long he or she has been in the United States and having a tax return filed using an ITIN is one way to show that.

How does one apply for an ITIN?

  • Applicants must fill out a W-7 application form and submit it to the IRS along with a completed tax return. Individuals do not need to apply in person.16 When the application is approved, ITINs are sent to applicants through the mail.
  • Applicants are required to submit original documents verifying identify and “foreign status”. The IRS has issued a list of 13 documents that will be accepted for this purpose. Those documents will be returned to the applicant within 60 days of receipt and processing of the W-7 form.17
  • There are IRS Acceptance Agents and Taxpayer Assistance Centers available to help persons apply.18

In 2015, Congress enacted legislation to clarify the 2012 guidance from the IRS stating that all ITINs issued after December 31, 2012 will have to be revalidated every five years. Additionally, if a person obtains an ITIN but does not use it for three consecutive years, it will expire, and will need to be revalidated.19

Source: AILA Doc. No. 16040665

Endnotes:

1.) Internal Revenue Service, “Taxpayer Identification Number,” Last modified December 28,2015, https://www.irs.gov/Individuals/International-Taxpayers/Taxpayer-Identification-Numbers-TIN.

2.) Government Accountability Office, “Internal Revenue Service: Individual Taxpayer

3.) Identification Numbers Can Be Improperly Obtained and Used,” March 10, 2004, http://www.gao.gov/assets/120/110663.html

4.) Internal Revenue Service, “General ITIN Information, last modified October 27, 2015, http://www.irs.gov/Individuals/General-ITIN-Information.

5.) Internal Revenue Service, “General ITIN Information,” last modified October 27, 2015, https://www.irs.gov/Individuals/General-ITIN-Information.

6.) Internal Revenue Service, “Immigration and Taxation,” accessed January 25, 2016, https://www.irs.gov/pub/irs-utl/20-Immigration%20and%20Taxation.pdf.

10.) Internal Revenue Service, “General ITIN Information, “last modified October 27, 2015, https://www.irs.gov/Individuals/General-ITIN-Information.

11.) Internal Revenue Service, “Earned Income Tax Credit & Other Refundable Credits,” last modified October 19, 2015, https://www.eitc.irs.gov/Tax-Preparer-Toolkit/faqs/basicquals.

12.) Internal Revenue Service, “Ten Facts About the Childcare Tax Credit,” last modified May 29, 2015, https://www.irs.gov/uac/Ten-Facts-about-the-Child-Tax-Credit; Internal Revenue Service, “Immigration and Taxation, “accessed January 25, 2016, https://www.irs.gov/pub/irs-utl/20-immigration%20and%20Taxation.pdf

13.) Internal Revenue Service, “instructions for Form W-7 Notices, “accessed January 25, 2016, https://www.irs.gov/instructions/iw7/ar02.html.

14.) National conference of State Legislatures, “States Offering Driver’s Licenses to Immigrants, July 8, 2015, http://www.ncsl.org/research/immigration/states-offering-driver-s-licenses-to-immigrants.aspx.

16.) 26 U.S. code & 6103

17.) Internal Revenue Service, “General Instructions,” accessed January 26, 2016, https://www.irs/instructions/iw7/ch01.hrml

18.) Internal Revenue Service, “ITIN Update Procedure Frequently Asked Questions, “last modified January 5, 2016, https://www.irs.gov/Individuals/ITIN-Update-Procedures-Frequently-Asked-questions

19.) Internal Revenue Service, “ITIN Update Procedure Frequently Asked Question, “last modified January 5, 2016, https://www.irs.gov/Individuals/ITIN-Updated-Procedures-Frequently-Asked-Questions.

 

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