You may have heard the acronym “ITIN” surfacing in tax talk lately and thought to yourself “Hmm…I should probably Google that later...” Well don’t worry, most taxpayers aren’t ITIN know-it-alls. Whether you went through with that Google search or not, we’ve put together a list of FAQs to help you understand what the ITIN is, who needs one, and how you apply.
What is an ITIN?
ITIN stands for Individual Taxpayer Identification Number. First introduced in 1996, an ITIN is a United States tax processing number issued by the Internal Revenue Service. A tax ID number consists of nine digits beginning with the number 9 and generally has a range of 70 to 99 (excluding 89 and 93) in the fourth and fifth digit. Example: 9XX-70-XXXX or 9XX-99-XXXX.
What is an ITIN used for?
The IRS issues ITINs to help individuals comply with the U.S. tax laws, and to provide a means to efficiently process and account for tax returns and payments for those not eligible for Social Security Numbers (SSNs). ITINs are used for federal tax reporting purposes only. An ITIN does not serve as valid identification outside of the tax system, therefore it does not authorize work in the U.S. or provide eligibility for Social Security benefits or the Earned Income Tax Credit.
Who needs an ITIN?
If you meet one of the following situations below, you will need an ITIN to file your federal income tax return:
- Foreign nationals and others who have federal tax reporting or filing requirements and DO NOT qualify for SSNs
- A non-resident alien individual not eligible for a 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 needs an ITIN
- A nonresident alien required to file a U.S. tax return
- A U.S. resident alien (based on days present in the United States) filing a U.S. tax return
- A dependent or spouse of a U.S. citizen/resident alien
- A dependent or spouse of a nonresident alien visa holder
How do I apply for an ITIN?
To apply for an ITIN, complete Form W-7 and mail it to the IRS ITIN Unit in Austin, Texas. Attach a valid federal income tax return, unless you qualify for an exception. Along with your ITIN application, you must also include your original proof of identity or certified copies by the issuing agency and foreign status documents. Use the 13 Acceptable Documents list approved by the IRS.
If you’re looking for an easier route, you can apply at a Liberty Tax office with a Certified Acceptance Agent. Our Certified Agents will walk you through the process and verify that documents required to apply for an ITIN, such as passports or birth certificates, are authentic. This saves you the hassle of submitting your supporting documents to the IRS and you won’t have to wait to get your documents back. Simply apply for an ITIN at a participating Liberty Tax office and take your important documents with you when you leave.
ITIN Renewals (New for 2016!)
With new requirements signed into law under the PATH Act, certain taxpayers will need to renew their ITIN. The law states that taxpayers who have not used an ITIN on a tax return in the last three years or those with the middle digits of 78 and 79 must renew their ITIN before filing a 2016 tax return. Learn more about ITIN renewals here.
Still have questions about the ITIN? We’re all ears! Ask your questions in the comments below and we’ll get back to you. Be sure to follow us on Facebook and Twitter for more important tax tips and updates.