ITIN stands for the “individual taxpayer identification number,” and it’s a number issued by the IRS used for tax purposes by those who aren’t eligible for a Social Security Number (SSN). Understanding precisely what an ITIN is will tell you in which situations it's used and precisely who qualifies to obtain it.

In this article, we’ll explore the ins and outs of an ITIN to explain not only who needs it and why, but how long it takes to receive this number, how it’s different from an SSN, and how it can be used to ensure compliance with the U.S. tax laws. Without further ado, let’s jump right in!

Key Takeaways

• An ITIN is an individual taxpayer identification number, typically issued for tax purposes to resident and nonresident aliens, as well as their spouses or dependents.
• Thoroughly understanding what an ITIN is helps individuals file taxes, get tax refunds, and even start sole proprietorship businesses or open bank accounts.
• An ITIN is not to be confused with a Social Security Number (SSN), which is issued to U.S. citizens, or an Employer Identification Number (EIN), which is issued to businesses.
• To receive or renew an ITIN, you should submit Form W-7, Form 1040 or 1040-NR, and supporting documentation to the IRS.

What is ITIN Used For and Who Needs it?

An ITIN is an individual taxpayer identification number. It contains nine digits and is used for federal tax purposes by those who can’t obtain a Social Security Number (SSN). The groups of people who can apply for an ITIN in the USA include resident and nonresident aliens and their spouses or dependents.

Resident aliens are foreign nationals who aren’t U.S. citizens but have passed the green card test or have been in the country for more than 183 days (substantial presence). Nonresident aliens applying for ITIN are foreign nationals who earned taxable income in the U.S. but don’t meet green card or substantial presence criteria.

Spouses or dependents of these people are eligible for an ITIN only if they can claim allowable tax benefits or file their own tax returns.

Keep in mind that an ITIN does not provide many SSN-like benefits outside of tax compliance. For instance, it cannot be used as a work permit or an immigration document.

Instead, some of the main reasons why you should apply for an ITIN are that you’re filing a federal tax return, claiming a tax treaty benefit, opening a U.S. bank account as a non-resident, or, in some cases, starting a sole proprietorship business.

Lastly, here’s an example of an ITIN:

An ITIN uses the same format as an SSN, and its first digit is always 9.

How to Apply for an ITIN

To apply for an ITIN, you need to submit the necessary documents to the IRS before or on your tax return due date.

Here are the three types of documents that you need:

1. Form W-7. This form is called the Application for IRS Individual Taxpayer Identification Number. To fill out this form, you’ll need to include relevant personal information and disclose which identification document you’ll submit with your application.
2. Form 1040 or Form 1040-NR. These are the U.S. Individual Income Tax Return (Form 1040) and the U.S. Nonresident Alien Income Tax Return (Form 1040-NR). They are used to file annual income tax returns. Forms have SSN areas, which you should leave blank, as the IRS will write in your assigned ITIN.
3. Supporting documents. These are used to prove your foreign status and identity. There are 13 different documents to use (e.g., medical records, school records, national ID, etc.), and they have to be non-expired originals or certified copies. You can either use a passport or two other documents (one for your identity and one for your status).

While you can’t submit your ITIN application online, you can do so by mail or in person.

Applying in person offers several benefits, as you can have most of your supporting documents authenticated and returned immediately. Moreover, you can get assistance with completing W-7 and an explanation on how to get an ITIN if you’re not sure what to do.

How Long Does It Take to Get an ITIN?

It typically takes up to seven weeks to get an ITIN. This period can extend up to 9–11 weeks if you’ve applied for an ITIN between January 15 and April 30, in the middle of tax season. Applying outside of peak months can result in faster processing times.

After that period, the IRS will notify you about your application using one of the three following notices:

• CP565 Notice. This notice means that your application has been accepted and that you’ve been assigned an ITIN, so you don’t need to do anything else.

• CP566 Notice. If you receive this notice, the IRS needs you to provide additional information before your application can be processed.

• CP567 Notice. Receiving this notice means that your application has been denied, and you need to apply again.

If you submitted your application via mail, the IRS will return supporting documents within 60 days.

While you can’t check your ITIN status online or make an inquiry about supporting documents, you can call the following phone numbers:

• 800-829-1040, for U.S. individuals
• 267-941-1000, for individuals abroad
• TTY/TDD 800-829-4059, for hard-of-hearing or deaf individuals

ITIN vs. SSN: What’s the Difference?

Here are some of the key ITIN vs. SSN (Social Security Number) differences:

• Issuer. An ITIN is issued by the IRS while an SSN is issued by the Social Security Administration (SSA).

• Eligibility. ITINs are for resident and nonresident aliens and their spouses or dependents who can’t obtain SSNs. Conversely, SSNs are for U.S. citizens, permanent residents, and eligible nonimmigrant workers.

• Purpose. An ITIN is used solely for tax purposes by individuals who have tax obligations in the U.S. but aren’t eligible to get an SSN. On the other hand, SSN is used not only to file taxes but also to land jobs, get passports, apply for loans, etc.

Due to these differences, it’s impossible to use an ITIN instead of an SSN in most cases.

However, you can become eligible for an SSN and submit a request if you work in the U.S., attend school there, or have a valid nonwork reason. If you do become eligible and apply for an SSN through the SSA, you can transfer your ITIN records to SSN before having your ITIN rescinded, since you can’t have both.

Does an ITIN Expire?

An ITIN expires if you haven’t used it on a tax return in three consecutive tax years. The expiration date is December 31 after the third year. If you’re wondering how you can know if your ITIN has expired, you can check its status and your tax records on your online account for individuals.

That means your ITIN is valid as long as you keep using it. However, if you try to use an expired ITIN, you can run into several issues. While you’ll still be able to file your tax return, you can encounter delayed processing, reduced tax refunds, and even penalties.

The only instance in which you can use an expired ITIN is on documents that report payments you receive, like a filed Form 1099. In any other case, it’s critical to renew an expired ITIN if you need it again.

The process of renewing your ITIN is similar to obtaining it for the first time. You need to complete Form W-7 once again. However, when filling out the document, you’ll need to check the “Renew an existing ITIN” box and enter your expired ITIN in lines 6e and 6f, if you know it. If you don’t remember your expired ITIN, check the “No/Don’t know” box.

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By using our generators, you’ll significantly speed up the creation process while avoiding errors. You can use them to track payments, prove income, file taxes, and more. Automate and simplify the processes, and you’ll ace the tax season every time!

Final Thoughts

Now that you know what an ITIN is, what it’s for, and how to obtain it, you can effortlessly file your taxes and ensure compliance. If you’re not eligible for a Social Security Number and have tax obligations in the U.S., apply with relevant documentation, and you’ll reap the benefits of having an ITIN.

And if you ever use it to start a sole proprietorship business, don’t forget to check out our document generators. Being able to effortlessly create W-2s, 1099 forms, invoices, and pay stubs will make your document management easier and help you ensure compliance for tax season.

FAQs on ITINs

#1. Can I use an ITIN to work in the US?

No, you cannot use an ITIN to work in the U.S. You need an SSN (Social Security Number) to be authorized to work. The same number is used on the Form W-2 issued by the employer when reporting employee wages for tax purposes.

#2. Do ITIN holders get a tax refund?

Yes, ITIN holders can get a tax refund. In some states, like California, they can qualify for tax credits, such as California Earned Income Tax Credit (CalEITC), Young Child Tax Credit (YCTC), and Foster Youth Tax Credit (FYTC). However, they aren’t eligible for the federal Earned Income Tax Credit (EITC).

#3. Can I open a bank account with an ITIN?

Yes, you can open a bank account with an ITIN. To open an account, you’ll need to provide and verify your name, date of birth, address, and ID number, which can be either an SSN or an ITIN. You can use an ITIN to apply for a credit card, too.

#4. How do I check my ITIN application status?

To check your ITIN application status, you can call the IRS via phone. They have three phone numbers, one for U.S. citizens (800-829-1040), one for individuals abroad (267-941-1000), and one for deaf or hard-of-hearing individuals (TTY/TDD 800-829-4059).

#5. What happens if I don’t renew my ITIN?

If you don’t renew your ITIN, you can still pay tax or request an extension, but you may receive a reduced refund or have to pay penalties and interest. There can also be a delay in processing your tax return, and you may not be able to claim certain credits.