Who Needs an ITIN
Do I need an ITIN?
The IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for Social Security Numbers (SSNs).
You must apply for an ITIN if you:
- Are not eligible to obtain an SSN
- Need to furnish a federal tax identification number
- Want to file a federal income tax return
Nonresident alien individuals who are not eligible for an SSN are only required to file a U.S. tax return to claim a refund of tax under the provisions of a U.S. tax treaty. To file a tax return and get your refund, you must have an ITIN.
What if you are a Canadian national who gambled in the US and had your winnings and US taxes (taxed at 30%) immediately withheld at the gambling establishment and would like you’re your money back? In most instances, you will likely be required to file a FORM 1040NR to report you’re winning and taxes withheld to the IRS and to request your refund. But in order to file, you must have an ITIN.
Other examples of individuals who need ITINs include:
- A nonresident alien required who is required to file a U.S. tax return. If you have never filed a U.S. tax return, but you want to make a voluntary disclosure and become compliant with your tax return filing obligations, you may need an ITIN.
- A U.S. resident alien (based on days present in the United States) filing a U.S. tax return.
- An undocumented alien who wants to come into compliance with the Internal Revenue Code.
- A dependent or spouse of a U.S. citizen/resident alien.
- A dependent or spouse of a foreign national who is present in the U.S. on an HIB visa. The dependent on H 4 Visa must obtain an ITIN to file jointly with your H IB spouse.
- If you have an application for an SSN pending, you do not need an ITIN. You only need an ITIN if the Social Security Administration (“SSA”) notifies you that an SSN cannot be issued.
Undocumented (illegal) Immigrants
Undocumented immigrants who are living in the US are still required to file federal income tax returns. How you treat your tax obligations can affect your eligibility for naturalization. Specifically, when applying for naturalization, one must demonstrate good moral character. The regulations provide that someone who avoids paying taxes lacks good moral character. Therefore, if you are applying for naturalization, you should not be delinquent on your taxes. If you are behind on your tax obligations, then you should enter into an “offer in compromise” with the IRS, which is basically a payment plan. At the naturalization interview, you can present the letter from IRS confirming the payment plan. In order to file their taxes, these individuals required to apply and be approved for an ITIN number. If these individuals do not file federal income taxes and later apply to become a naturalized US Citizen, the United States Citizenship and Immigration Services (USCIS) may determine that you lack “good moral character” for failure to file tax returns.
ITINs are not valid for work or identification
An ITIN is not valid for work purposes. One needs a valid Social Security Number (SSN) to work in the US.
In addition, ITINs are not valid for identification outside of the tax system. ITINs are us solely for the purpose of submitting and processing a tax return. Therefore, ITINs should not be used as identification in nontax related matters.