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What is Taxpayer Identification Number ?
A Taxpayer Identification Number
(TIN) is a nine-digit number that is used for income tax
purposes. The Internal Revenue Service (IRS) has three kinds of
taxpayer identification numbers:
Social security numbers (SSN)
- is a number issued to citizens and permanent residents in the
US. The main purpose of SSN is to track working individuals for
taxation purposes and Social Security benefits. However, the SSN
has slowly become a de facto national identification number.
Employer identification numbers (EIN)
is the business equivalent of a Social Security number. It is
used by businesses for tax purposes and is also known as Federal
Tax Identification Number.
Individual taxpayer identification
numbers (ITIN) In 1996, IRS introduced the ITINs for
individuals who are required to have a US taxpayer
identification number, but cannot obtain a Social Security
Number.
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An Individual Taxpayer
Identification Number (ITIN) is a nine-digit number issued by
the IRS for tax processing. The number always begins with the
number 9, thus distinguishing it from a SSN, and has either a 7
or 8 as the fourth digit. ITINs are for federal tax reporting
only and do not serve any other purpose. An ITIN cannot be used
as work authorization, for Social Security benefits, or as valid
identification outside the tax system.
IRS issues ITINs to help individuals
comply with the US 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.
If you do not have an SSN and are not eligible to obtain an SSN,
but are required to provide a federal tax identification number
or file a federal income tax return, you must apply for an ITIN.
By law, an individual cannot have both an ITIN and an SSN.
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Eligibility Criteria
Any individual who is not eligible for an SSN but who must
furnish a taxpayer identification number should apply for an
ITIN. Some examples include:
Non-resident alien filing a U.S. tax return and not eligible
for an SSN.
U.S. resident alien (based on days present in the United
States) filing a U.S. tax return and not eligible for an SSN.
Dependent or spouse of a U.S. citizen/resident alien.
Dependent or spouse of a non-resident alien visa holder.
Benefits of ITIN
You may be able to get a refund for excess taxes that have
been withheld from your paycheck.
You may be able to claim the Child Tax Credit if you qualify.
You may be able to claim exemptions for your dependents.
Filing taxes helps you to document a wage record.
Filing taxes may help with future immigration applications by
showing continuous presence and good moral character.
If you are going to receive money as part of a settlement of a
case or a judgment by the court in your favor and you dont have
a SSN, you will need an ITIN so that taxes may be withheld from
the settlement monies.
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Application Process
To apply for an ITIN, an individual has to complete the
following:
Completed form W-7 (Application for ITIN) revised 12-17-2003.
Original, completed tax return(s) for which the ITIN is needed
(unless you submit proof that you fall within one of the
exceptions.)
An applicant must establish proof of identity to obtain an ITIN.
There are now 13 acceptable documents that are acceptable as
proof of identity by the IRS:
An original or a certified or notarized copy of an unexpired
passport is the only document that is accepted for both identity
and foreign status.
In lieu of a passport, IRS will accept two or more of the
following documents (original or notarized) as proof of
identity. The documents must also show your name and photograph,
and support your claim of foreign status.
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National identification card (with
photo, name, current address, date of birth, and expiration date)
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
Visa
U.S. Citizenship and Immigration Services (USCIS) photo
identification
Medical records (dependents - under 14 years old - only)
School records (dependents and/or students - under 25 years old -
only)
You should complete Form W-7 as soon as you are ready to file your
federal income tax return since you need to attach the return to
your application. You can apply for an ITIN any time during the
year. If you qualify for an ITIN and your application is complete,
IRS will send you a letter with your tax identification number
within four to six weeks. The applicant will receive an
authorization letter with the Tax Identification Number within 4-6
weeks of submitting the application.
You can apply in-person to an Acceptance Agent or at a Taxpayer
Assistance Center or apply by mail to IRS. Applicants outside the
United States may contact an overseas IRS office to find out if that
office accepts Form W-7 applications. An Acceptance Agent is an
individual, business or organization (college, financial
institution, accounting firm, etc.) authorized by IRS to assist
individuals in obtaining ITINs. Acceptance Agents review applicants'
documentation, complete a certificate of accuracy, and forward the
certificate and application to the IRS for processing.
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Article Contributed By: Jaya Suresh
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