What is ITIN?

Each business requires a tax ID number and every individual person in United States needs a tax ID number. There are two types of individual tax identification numbers. The first form is the Social Security Number. These are open to all people of the United States, permanent resident aliens and temporary residents who have been authorized to work through a work permit.

The second type of standard tax number is the ITIN number which will be discussed below.

What is an ITIN number?

ITIN stands for Individual Taxpayer Identification Number. An ITIN is easy to identify, as it always starts with the number "9." An ITIN does not qualify a person to work lawfully in the U.S. nor does it provide suitability or access to benefits from social security.

The IRS provides Individual Taxpayer Identification Numbers (ITINs) to individuals who do not count for Social Security Numbers (SSNs) but need to pay taxes. The IRS will also issue ITINs to dependents who are eligible for a tax return but are not eligible for social security numbers.

Eligibility for ITIN number

The following persons are eligible for an ITIN number in the United States

  • Every non-resident who has an American source of income would need an ITIN from the IRS to file a U.S. tax return, as legally required. This means that a European citizen who lives in Europe but has rental property in the U.S. must file a tax return using an ITIN to report on a non-resident tax return their rental income and expenses.

  • For anyone on a temporary visa in the U.S. and their partner is accompanying them to the country then the spouse will need an ITIN to file a joint citizen return in the U.S.

  • A resident of America who does not qualify for a SSN will need an ITIN to fulfill their U.S. tax reporting requirements.

Obtaining an ITIN number

ITIN application rules require ITIN applicants to send their passports and/or other qualifying documents to the IRS proving their nationality and identity. Individuals who are not dependents and who use a Certified Acceptance Agent (CAA) may apply for an ITIN and retain their original documents.

With your federal income tax return, you can file FormW-7, IRS Individual Taxpayer Identification Number (ITIN). In order to prove identification and foreign origin, you must also include original documentation or approved copies from the issuing Office. When you apply for an exception then file FormW-7 for the exception with your identification and international status records as well as supporting documentation.

Expiry of ITIN

The IRS policy states that ITIN will expire for any year during a period of five consecutive years unless used on a federal income tax return. The IRS will not deactivate the ITIN until it has been used in the last five years on at least one tax return, and will remain in effect as long as you continue to use it to file U.S. tax returns. This policy applies to any ITIN, irrespective of when it was issued, and its aim is to ensure that anyone who legitimately uses an ITIN for tax purposes can continue to do so.

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