Do you Need a Taxpayer Identification Number?
*This publication is only intended to be used for general informational purposes. Consult a tax professional for the most current data and/or personal advice.
If you are not eligible for a Social Security Number but are employed in the United States, you may be able to get an Individual Taxpayer Identification Number. The Internal Revenue Service issues these numbers to workers so they can comply with federal tax laws. There are, however, several other benefits to having this number, such as being able to use a financial institution’s valuable products and services.
Federal tax reporting
Individual Taxpayer Identification Numbers (ITINs) were originally developed for federal tax reporting purposes, essentially so the IRS could keep track of tax returns and collect taxes from everyone working in the United States.
Keep in mind that getting an ITIN does not mean that you can be legally employed in the United States, or become eligible for Social Security benefits and the Earned Income Tax Credit. It just means that you have to file your taxes and pay any tax due if you do work.
Financial institution services
Many financial institutions are now allowing people with ITINs to use their products, especially credit unions whose aim is to provide under-served communities with quality, low-cost financial services. With an ITIN, you may be able to open checking and savings accounts, as well as other income-bearing accounts. You may even apply for loans and lines of credit; there is no difference between a Social Security Number (SSN) and an ITIN for qualification purposes.
Having an ITIN can also help you establish credit. Since you may be able to get a loan or line of credit from a financial institution, you can build a good credit history by borrowing money and repaying balances responsibly. Your activity will be reported to the credit bureaus, and as with loan qualification, there is no distinction between a SSN and an ITIN for credit scoring and reporting purposes. That said, not all financial institutions issue credit products to consumers with ITINs.
To apply for an ITIN
Applying for an ITIN is fairly simple. You don’t have to apply for the number in person and IRS will not take steps to ensure you are who you say you are. All you have to do is complete a one-page IRS-issued form (called Form W-7), attach your federal income tax return, and provide your proof of identity and foreign status.
For identification purposes, an unexpired passport is best; without that you’ll have to have a combination of documents that have your name, photograph, and support your claim of foreign status. The IRS requires you to send original documents, or certified copies of these documents from the issuing agency.
These include such documents as a:
- National identification card
- U.S. driver’s license
- Civil birth certificate
- Foreign driver’s license
- U.S. state identification card
- Foreign voter’s registration card
- U.S. military identification card
- Foreign military identification card
- U.S. Citizenship and Immigration Services photo identification
- Medical records
- School records
Send your return, Form W-7, and proof of identity documents to:
Internal Revenue Service
P.O. Box 149342
Austin, TX 78714-934
If your application is accepted, you will receive an authorization letter that contains your ITIN. The application and approval process typically takes six to ten weeks. When you receive it you will notice that, as with a SSN, an ITIN is nine digits long. But the first number will always starts with a “nine” and the fourth will always be either a seven or an eight. For example, your ITIN may look like: 955-85-5555.
If you need help with the form, or have any questions about eligibility or how to apply, the best place to go is the IRS. The IRS offers free ITIN assistance through their taxpayer assistance center. You may receive guidance over the telephone or you may visit your nearest office:
IRS Taxpayer Assistance Centers
Help is also offered by “Acceptance Agents”: individuals, businesses, and organizations that are authorized by IRS to help you obtain an ITIN. Be aware, though, that there may be a fee for this service. Start with the IRS, and if you need more help, ask them for a referral to a qualified Acceptance Agent.