When Do I Need An ITIN?
An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. It is a nine-digit number that always begins with the number 9 and has a range of 70-88 in the fourth and fifth digit. Any individual who has tax filing or payment obligations under U.S. law but is not eligible for a Social Security Number (“SSN”) typically uses an Individual Taxpayer Identification Number.
Because both resident and nonresident aliens may have a U.S. filing or reporting requirement, the federal government may issue ITINs regardless of immigration status, unless an exception applies. If a person does not have an SSN and is not eligible to obtain an SSN, but has a requirement to furnish a federal tax identification number or file a federal income tax return, he or she must apply for an ITIN.
ITINs serve only one purpose: federal tax reporting. ITINs provide a means to efficiently process and account for tax returns and payments for those not eligible for Social Security Numbers. ITINs also help individuals such as resident and nonresident aliens comply with federal tax law.
However, an ITIN does not authorize any individual to work in the United States. It also does not provide eligibility for Social Security benefits. ITIN holders also don’t qualify as a dependent for Earned Income Tax Credit Purposes.
Nonetheless, anyone, including a foreign national, who does not qualify for a Social Security Number and has federal tax reporting or filing requirements, should apply for an ITIN. A non-resident alien individual not eligible for an SSN who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty must have an ITIN. Some U.S. resident aliens (based on days present in the United States) who file a U.S. tax return and a dependent or spouse of a U.S. citizen/resident alien or nonresident alien visa holder also should have an ITIN.
Individuals may apply for an ITIN at any time during the year. However, if the tax return attached to the application (Form W-7) is filed after the return’s due date, interest and/or penalties may, of course, apply. Timely filing the current year’s return by the due date is necessary to avoid incurring these costs and penalties.
It is wise for taxpayers, whether an individual or business located in the Tri-State area, to consult with a tax professional to help assess their current tax situation, looking ahead to the future. If you have any question about taxes, especially related to 2017, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation call 212-490-0704.