September 14, 2017
Have you heard of an ITIN number and wonder whether it might apply to you? Read on to know the basics about this number and whether you need one:
What is an ITIN?
It’s an 'Individual Taxpayer Identification Number' and is issued by the Inland Revenue Service (IRS) to help them process taxes.
Who are ITIN’s issued to?
They are issued to those individuals who need a U.S. taxpayer identification number, but either do not have one, or are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).
ITIN’s are given to individuals irrespective of whether they are resident or non-resident aliens of the U.S. as both may have a U.S. filing or reporting requirement under the Internal Revenue Code.
A valid federal income tax return must be filed to receive an ITIN, unless the individual meets an exception.
What are ITIN’s used for?
They are used for federal tax reporting, and are not intended to be used for any other purpose. They are issued by the IRS to try and help individuals comply with all U.S. tax laws, and to help those who do not qualify for a SSN, to be efficiently processed for tax returns and payments.
What an ITIN does not help you with:
Obtaining an ITIN will not give you automatic rights to work in the U.S. or make you eligible for Social Security benefits. Neither does it enable adependant to qualify for Earned Income Tax Credit Purposes.
Do you need an ITIN?
If you don’t qualify for a SSN but still have federal tax reporting or filing requirements, then you will need to be issued an ITIN by the IRS. Also, if you’re a non-resident alien who doesn’t qualify for an SSN but who is required to file a U.S. tax return for claiming a tax refund under the U.S. tax treaty, will need an ITIN.
You may also need one if you’re a non-resident alien required to file a U.S. tax return, a U.S. resident alien filing a U.S. tax return, a dependent or spouse of a U.S. citizen or resident alien or a dependent or spouse of a non-resident alien holding a visa.
If you recognize your own status as mentioned above, then you will need to apply for an ITIN.
However, if you are in the process of applying for a SSN, you must wait until you hear back from the IRS before you complete the form necessary for an ITIN application. If you receive notification that a SSN cannot be issued, then you can go ahead and file a form W-7. Please take note that an alien individual cannot obtain both an ITIN and a SSN.
To find out more about ITIN’s and whether you require one, it is best to seek the help of a tax planning and preparation company, who can give you the latest advice and guidance according to the ever changing federal and state laws.
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