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What Is An Individual Taxpayer Identification Number?
Individual taxpayer Identification Number, or ITIN, can be defined as a tax processing number. The ITIN number is available only for some U.S non-residents and resident aliens, their dependents, and spouses who are not eligible for the SSN (Social Security Number). The ITIN is a nine-digit number that starts with the number 9 and is in the format - SSN (NNN-NN-NNNN). The Internal Revenue Service issues ITIN. The number is provided so the residents, aliens, and non-residents can comply with U.S. tax laws. In simpler terms, Individuals' taxpayer identification number is issued to individuals who need to comply with the U.S. tax laws but are not eligible for SSNs from SSA (Social Security Administration). The ITIN is used to file tax returns, pay taxes owed, and claim benefits as per the law on tax.
The ITIN provides efficiency to tax returns and payments for these individuals. The individual taxpayer identification number is preferred as it can be issued to individuals regardless of their immigration status. The only aim or purpose of ITIN is federal tax reporting.
Who Needs To Obtain An ITIN?
You must obtain an Individual taxpayer identification number if you don't qualify for the social security number and the eligibility to obtain it. You will need an ITIN to fulfill the U.S Tax reporting requirements. You might be a U.S. resident alien, a non-resident, a dependent or spouse of a U.S. citizen, a resident alien, or a non-resident alien visa holder. If you fall into any of these categories, you must file U.S. tax returns, per the law.
For example, suppose you are a Canadian citizen but hold a property (Rental) in the United States. In that case, you must file for a tax return through ITIN. This will allow you to report your rental property income and expenses in the U.S. The Individual taxpayer identification number will also provide some benefits on tax rules in some cases.
How Is The ITIN Issued? - The Process
To obtain the ITIN, applicants are required to mail their passports and other documents to prove their citizenship and identification. The Internal Revenue Service issues the Individual taxpayer identification number. Applicants using a CAA (Certified Acceptance Agent) can apply for ITIN through their original documents.
To get the ITIN, individuals must fill out the IRS Form W-7, the IRS application for ITIN. This form will require you to submit some documents in order to prove your foreign status and identity. You can mail the required paperwork documents with the form to the address in the Form instructions. You will need to present the documents to the IRS walk-in offices or move your application forward with the help of an Authorized agent by the IRS only.
You can apply for the agent using the IRS-authorized Certifying Acceptance agent service, which will prevent you from mailing the proof of identity and foreign status documents. These agents can be colleges, financial institutes, accounting forms, etc., and are authorities by the IRS to assist you in the application process and obtain ITIN without any hassle. These authorized entities and agents review your application process and documents and shift your W-7 form for processing.
Another way to obtain the ITIN is by booking an appointment at an IRSD Taxpayer Assistance Center. This will also prevent you from mailing your identity proof and foreign status documents. Following the processing, the IRS will issue your Individual taxpayer identification number through mail only. The process can take up to weeks. You will get your ITIN through the mail in seven weeks after all your documents are qualified.
Difference Between ITIN And SSN
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ITIN |
SSN |
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What is it? |
It is a 9-digit Taxpayer Identification number, beginning with 9, and formatted like - SSN (NNN-NN-NNNN). |
It is a social security number of 9- digit which is issued to U.S. citizens, permanent and temporary residents under section 205(c)(2) of the Social Security Act. |
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Process of applying |
Individuals are required to fill out the IRS Form W-7, the IRS application for ITIN. This form will require you to submit some documents to prove your foreign status and identity. |
Complete Form SS-5, Application for a social security CardPDF. Documentation includes identity evidence, age, and U.S. citizenship or lawful alien status. |
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Eligibility |
It is issued to residents with foreign status and migrants without documentation. (Used as a replacement for SSN). Issued to people who cannot get a Social Security Number. |
It is issued to U.S. citizens and authorized non-citizens. |
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Benefits |
It provides eligibility for Social Security benefits and qualifies a dependent for Earned income tax credit purposes. |
This allows you to obtain credit, open a bank account, and other government benefits like insurance. |
Benefits Of ITIN Tax Forms
The Individual taxpayer identification number provides efficiency for tax returns and payments for people who can't get their social security number. It allows migrants to pay Taxes without the use of Social Security numbers.
The ITIN also helps collect taxes from nonresident aliens, foreign nationals, and people who have following or payment issues or obligations as per the U.S. tax laws.
Another benefit of ITIN is that it can secure your driver's license. ITIN is used instead of SSN in some states to get a driver's license, permit, or even a state identification card.
The identification number can also allow you to open an interest-bearing bank account. This is great for people without SSNs but who want to open a bank account bearing interest.
ITIN also provides you with your residency proof. Immigrants must give proof of their residency in many aspects of their life while living in the United States. The ITIN allows you to file a tax return and secure residency proof for future use.
Facts About ITIN
1. ITIN was created solely for tax returns filing and other tax purposes.
Formed by the Internal Revenue Service in 1996, IRS was built to allow foreign nationals and resident aliens to comply with U.S Tax laws without needing an SSN.
2. ITIN is not considered to be an SSN.
The individual taxpayer identification number is 9-digit and serves tax returns benefits. However, it is not considered to be an SSN.
3. Immigration status
The individual taxpayer identification number can not provide individuals with legal immigration status and is not used to prove legal presence in the States.
4. Work authorization
The ITIN can not give you legal documentation or work authorization. (I-9 form).
5. ITIN does not provide the same benefits as SSN
Individual taxpayer identification number is not eligible for Social Security benefits or the Earned income tax credit (EITC). The number can not give you the same benefits that other U.S. citizens or taxpayers received while living in the United States.
6. ITIN holders can get CTC
CTC is a child tax credit that ITIN holders can claim. The CTC can be worth up to $3,600 for each child under the age of 6 and up to $3000 for each child between the age of 6 to 17, based on your income.
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