How an ITIN can help visa holders and their families
Filing a tax return is not a choice, it is an obligation for all who meet U.S. tax filing requirements. This can be surprising, for example, for U.S. citizens living overseas. One group of taxpayers are the thousands of H1B and TN visa holders who file and pay U.S. income taxes using a Social Security number (SSN) or individual taxpayer identification number (ITIN).
These visa holders can run into some trouble when filing if they don’t have a taxpayer identification number for their spouse and children, who don’t qualify for an SSN. Certain tax benefits are only available to those with a specific type of taxpayer identification number. While they don’t qualify for an SSN, spouses and dependent children of H1B and TN visa holders could qualify for an ITIN. By not getting an ITIN for their spouse or dependents, H1B and TN holders could be paying more than they should in taxes.
Who can get an ITIN?
Anybody who is eligible for a SSN should get the SSN and not the ITIN. But if they aren’t eligible for an SSN, dependents and spouses of U.S. citizens and resident aliens can get an ITIN.
What can an ITIN for spouses and dependents do?
An ITIN allows a nonresident alien spouse to file a joint return with a H1B or TN visa holder. The married filing joint status is a more favorable status than married filing separately with lower tax brackets and other benefits. For H1B or TN visa holders who are U.S. residents, getting an ITIN for their children living with them in the U.S. may allow them to claim an exemption for each of their dependents, which will lower their taxable income. They could also qualify for the child tax credit, which will lower their tax liability.
What is the ITIN application process?
Organize documents for an ITIN application
ITIN applicants will need current documents showing proof of identity and foreign status. The IRS accepts original and unexpired passports as stand-alone proof of identity and foreign status for primary taxpayers and spouses and for dependents in some cases. Other documents that prove either identity or foreign status include:
- U.S. Citizenship and Immigration Services (USCIS) photo identification,
- visa issued by the U.S. Department of State,
- U.S. driver’s license,
- U.S. military identification card,
- foreign driver’s license,
- foreign military identification card,
- national identification card,
- U.S. state identification card,
- foreign voter’s registration card and
- civil birth certificate.
Seek out a Certified Acceptance Agent (CAA)
A CAA undergoes specialized training and is approved by the IRS to assist with the ITIN process by preparing the ITIN application, verifying supporting documents and then submitting the ITIN application to the IRS. Because a CAA can verify the supporting documents, the applicant does not need to send their original identification documents to the IRS. CAAs can assist with ITIN applications for dependents. CAAs can also verify passports and birth certificates for dependents.
How long will it take to get an ITIN?
Applicants will generally receive their ITIN within six weeks, but it may take 14 weeks during tax filing season. Because of eligibility rules for certain credits, spouses and dependents of H1B visa holders should apply for their ITIN as soon as possible.
How can someone fix previous returns that left off a spouse or dependents?
If an H1B or TN visa holder filed taxes in 2014, 2015 or 2016 without their spouse or dependents, they can file an amended tax return to claim certain benefits they missed, like the dependent exemption or married filing jointly status. However, they won’t be eligible for the child tax credit, which requires the child to have a taxpayer identification number by the filing deadline.
Filing taxes is an obligation, but it shouldn’t be more painful than it has to be. Taxpayers can learn more about the ITIN application process to make sure they aren’t paying more than they should.
Were you surprised by a lower tax refund last year? Learn how to navigate any tax reform impact with tax planning strategies from the experts at H&R Block.
Tax refunds for H&R Block clients were up 1.4% under the first year of tax reform and the new withholding tables, while overall tax liability was down 5.6%.