Editor’s Note: This article was originally published on February 14, 2018.
ITIN stands for Individual Taxpayer Identification Number. The IRS issues Individual Taxpayer Identification Numbers (ITINs) to people who need to file taxes, but who do not qualify for Social Security numbers (SSNs). The IRS will also issue ITINs to dependents who can be claimed on a tax return, but who do not qualify for social security numbers.
Who’s eligible for an ITIN?
A lot of people, actually. Here are a few examples:
- Any nonresident that has a U.S. source of income would need an ITIN from the IRS to file their United States tax return, as required by law. This means that a Canadian citizen, who lives in Canada, but has rental property in the United States, must file a tax return, using an ITIN, to report their rental income and expenses on a nonresident tax return.
- If someone is in the U.S. on a temporary visa (like a L-1 intracompany transfer visa) and their spouse accompanies them to the country, the spouse will need an ITIN in order for the couple to file a joint resident return in the U.S.
- A U.S. resident (based on the days of presence test in the U.S.) who does not qualify for a Social Security number will need an ITIN to fulfill their U.S. tax reporting requirements.
ITINs allow taxpayers to stay in compliance with United States tax law. In some cases (such as claiming some dependent-connected tax benefits or filing jointly with a spouse), ITINs allow a taxpayer to benefit from tax rules that apply to all filers and not only to those with an SSN.
What ITINs don’t do.
Taxpayers filing with an ITIN cannot claim the Earned Income Tax Credit, which requires a valid SSN. However, ITIN filers can claim the Other Dependent Credit for a dependent who has an ITIN and is a U.S. resident. If an ITIN filer has a dependent child with an SSN, they may be eligible to claim the Child Tax Credit and Additional Child Tax Credit.
Starting in 2015 both the taxpayer and qualifying child must have SSNs or ITINs by the due date of the tax return (including extensions) in order to claim the child tax credit and additional child tax credit. The same timing rule also applies to the Other Dependent Credit. If a taxpayer or qualifying child qualifies for an SSN or ITIN but waits to apply, the taxpayer may not be able to claim this credit, even if they are otherwise eligible. Also, the credit cannot be claimed later if the taxpayer or qualifying child gets an SSN or ITIN from the IRS after the due date of the tax return (including extensions).
How to get an ITIN number.
ITIN application rules require ITIN applicants to mail their passports and/or other qualifying documents that prove their citizenship and identification to the IRS.
Individuals who are not dependents and who use a Certified Acceptance Agent (CAA) can apply for an ITIN and retain their original documents (they do not have to mail their passports and other original documents to the IRS).
Other benefits of using a CAA include:
- Help completing Form W-7, Application for IRS Individual Taxpayer Identification Number
- Assistance responding to the IRS if the IRS needs more information to process the ITIN application
- Services provided in the applicant’s preferred language (such as Spanish)
- Aid from an expert who understands taxes and the ITIN application process
A Certified Acceptance Agent can be the helping hand needed to start the ITIN Application process.