How do I apply for an ITIN?

Living in the U.S. as a foreign individual comes with its own set of challenges, especially when it comes to taxes. What if you don’t have a Social Security Number (SSN) but still need to file a tax return? Enter the Individual Taxpayer Identification Number (ITIN)—a lifeline for many non-residents and foreign nationals navigating the U.S. tax system. 

An ITIN isn’t just for filing taxes; it can also help you open a bank account, obtain a driver’s license, or even prove residency. But what exactly is an ITIN, and how do you get one? If you’ve ever wondered, “Do I need an ITIN?” or “How do I apply?”—you’re in the right place. Let’s break it down step by step and make the process as smooth as possible. 

What is an ITIN? 

An Individual Taxpayer Identification Number (ITIN) is a nine-digit tax processing number issued by the IRS to individuals who must comply with U.S. tax laws but aren’t eligible for a Social Security Number (SSN). Think of it as your passport to the U.S. tax system—it lets you file returns, claim tax benefits, and stay in good standing with the IRS, even if you’re not a citizen or permanent resident. 

ITIN vs. SSN vs. EIN: What’s the difference? 

To avoid confusion, let’s break down the alphabet soup of U.S. identification numbers: 

If the SSN is a Swiss Army knife (versatile and all-purpose), the ITIN is a specialized tool—like a corkscrew. It won’t help you with everything, but it’s perfect for the job it’s designed to do: keeping you compliant with tax laws. 

Who needs an ITIN? 

The IRS issues ITINs to: 

• Non-resident aliens filing U.S. tax returns. 
• Dependents or spouses of U.S. citizens/residents (if they don’t qualify for an SSN). 
• International students, investors, or professionals who earn income in the U.S. but aren’t eligible for an SSN. 
• Individuals claiming tax treaty benefits (e.g., reduced withholding on income).

What an ITIN Doesn’t Do 

While an ITIN is powerful for tax purposes, it has limits: 

• It doesn’t authorize work in the U.S. 
• It doesn’t qualify you for Social Security benefits (like retirement or disability). 
• It doesn’t provide immigration status or a path to citizenship.

The Lifespan of an ITIN 

ITINs aren’t forever! They expire if not used on a tax return for three consecutive years. Additionally, the IRS recently introduced rolling expirations: 

• ITINs issued before 2013 expired in 2016. 
• ITINs with middle digits 70-88 expired in 2019. 
• ITINs with middle digits 90-99 expire in 2024. 

Why might I need an ITIN? 

If you’re a foreign national living in the U.S., an ITIN can be your key to unlocking essential services and staying compliant with U.S. tax laws. While the primary purpose of an ITIN is to file taxes, its benefits extend far beyond the IRS.  

Here’s why you might need one: 

Filing Taxes Without an SSN

The most common reason to apply for an ITIN is to file a U.S. tax return. If you earn income in the U.S. but don’t qualify for an SSN, the IRS requires you to report that income and pay taxes. An ITIN allows you to do just that. 

For example, if you’re an international student with a scholarship or a non-resident alien earning rental income from U.S. property, you’ll need an ITIN to file your taxes. Without it, you risk penalties, interest, or even legal complications. 

Opening a Bank Account

Many banks and financial institutions accept ITINs as a valid form of identification. This means you can open a checking or savings account, apply for a credit card, or even secure a loan—all without an SSN. 

A U.S. bank account simplifies your financial life, whether you pay bills, receive payments, or manage expenses. It’s a practical step toward building a stable financial foundation in the U.S. 

Obtaining a Driver’s License

An ITIN can be used in certain states to apply for a driver’s license or state ID. This is especially helpful if you’re not eligible for an SSN but still must drive legally. 

For instance, states like California, Colorado, and Illinois allow ITIN holders to apply for a driver’s license. This not only makes daily life easier but also serves as a valid form of identification for other purposes, like renting a car or verifying your identity. 

Proving Residency

An ITIN can serve as proof that you’re complying with U.S. tax laws, which can be helpful in various situations. For example: 

• Renting an Apartment: Landlords may request proof of residency or financial responsibility. 

• Applying for Utilities: Some utility companies require identification to set up services. 

• Enrolling Children in School: Schools may request proof of residency during enrollment. 

Claiming Tax Treaty Benefits

If your home country has a tax treaty with the U.S., you may be eligible for reduced tax rates or exemptions on certain types of income (e.g., dividends, royalties, or pensions). To claim these benefits, you’ll need an ITIN. 

What documents do I need, and how do I submit them? 

Applying for an ITIN requires specific documentation to prove your identity and foreign status. The process might seem daunting, but with the proper preparation, it’s straightforward. But remember: the IRS requires original documents or certified copies from the issuing agency. Photocopies or notarized documents won’t be accepted. 

Here’s what you’ll need and how to submit your application: 

👤Proof of Identity: 

A valid passport is the most common and preferred option. 

If you don’t have a passport, the IRS accepts: 

• National ID cards (with photo, name, and address). 

• U.S. driver’s licenses. 

• Civil birth certificates (for dependents under 18). 

🌐Proof of Foreign Status: 

Your passport usually covers this requirement. 

If you don’t have a passport, you may need additional documents like: 

• Visas or immigration documents. 

• U.S. Citizenship and Immigration Services (USCIS) photo IDs. 

📄Completed Forms: 

• Form W-7: The official ITIN application. Make sure to fill it out completely and accurately. 

• Tax Return (if applicable): If you’re applying with a tax return, include the completed return (e.g., Form 1040). 

How to Submit Your Application 

Once you’ve gathered your documents, you can submit your ITIN application in one of three ways: 

📬Mail: 

Send your completed Form W-7, supporting documents, and tax return (if applicable) to the IRS address listed in the Form W-7 instructions. 

🏢In-Person: 

Visit an IRS Taxpayer Assistance Center (by appointment only) or an IRS-authorized Certifying Acceptance Agent (CAA). 

CAAs can verify your documents and submit your application on your behalf, saving you from mailing originals. 

👨‍💻Through a Tax Professional: 

Many tax preparers are authorized to submit ITIN applications. They can help you complete the forms, verify your documents, and ensure your application is error-free. 

Applying for an ITIN is like renewing your passport: You need the proper documents, fill out the forms carefully, and wait for processing. Miss a step, and you’ll be stuck in limbo. 

Can I apply for an ITIN before filing my personal taxes? 

Yes, you can—and it’s a smart move in many cases! Applying for an ITIN before tax season can save you time and stress. Here’s what you need to know: 

Timeline for Applying 

The IRS typically processes ITIN applications within 7 weeks, but it can take longer during peak periods (like tax season). If you wait until the last minute, you might miss the tax filing deadline, leading to penalties or refund delays. 

Applying with Your Tax Return 

If you’re filing taxes, you can submit your ITIN application along with your tax return. If you’re not ready to file your taxes but still want to apply for an ITIN, you can do so separately. Just remember, the ITIN won’t be issued until you file a tax return. 

Here’s how it works: 

• Complete Form W-7 (the ITIN application). 

• Attach your original documents or certified copies (e.g., passport) to prove your identity and foreign status. 

• Include your completed tax return (e.g., Form 1040) if you’re applying at the same time. 

Why Apply Early? 

Think of it like ordering a ticket to a concert—you don’t want to wait until the day of the show to figure out how to get in. Applying early ensures you’re prepared when tax season arrives, avoiding last-minute rushes and potential delays. 

Am I eligible for tax credits (CTC, EIC, etc.) with an ITIN? 

Tax credits can significantly reduce your tax bill or even result in a refund, so it’s important to know which ones you qualify for as an ITIN holder. While some credits are available to you, others have stricter eligibility requirements. Here’s what you need to know: 

Child Tax Credit (CTC) 

If you have dependent children who are U.S. citizens, you may qualify for the Child Tax Credit (CTC), even if you have an ITIN. The CTC can provide up to $2,000 per child (as of 2023), with up to $1,600 refundable as the Additional Child Tax Credit (ACTC). 

Key Requirements: 

• Your child must have a valid SSN. 

• Income limits: 

• • Single filers: total income must be under $200,000 

• • Married filing jointly: total income must be under $400,000 

Earned Income Credit (EIC) 

Unfortunately, ITIN holders are not eligible for the Earned Income Credit (EIC) unless they have an SSN. This credit is designed to support low-to-moderate-income workers, but it requires both the taxpayer and any qualifying children to have SSNs. 

Other Tax Credits 

American Opportunity Tax Credit (AOTC): If you’re paying for higher education, you may qualify for this credit, but it requires an SSN. 

Premium Tax Credit (PTC): Available to ITIN holders who purchase health insurance through the Marketplace. 

The bottom line

Navigating the U.S. tax system as a foreign individual can feel overwhelming, but an ITIN is a powerful tool to help you stay compliant and access essential services. From filing taxes to opening a bank account or obtaining a driver’s license, an ITIN opens doors and simplifies life in the U.S. 

By understanding what an ITIN is, why you might need one, and how to apply, you can tackle the process with confidence. And if you’re unsure about your eligibility for tax credits or need help with your application, don’t hesitate to reach out to a qualified professional. 

Need personalized guidance? Contact DiMercurio Advisors today for expert assistance with your ITIN application or tax filing. Let’s make the process smooth and stress-free!