Posted by Abundant Wealth Planning LLC

ITIN Number (all you need to know)

ITIN Number (all you need to know)

Do I need an ITIN? If so, how do I get one? Does it expire? What do I need to know about ITIN and my tax return? These are frequently asked questions that arise each year as tax season approaches. Understanding what an ITIN is and what it is used for can help taxpayers effectively manage their claims in the United States without stress or additional delays.


What is an ITIN?

The Individual Tax Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. The IRS issues ITINs to people who need a U.S. tax identification number but do not have and are not eligible for a Social Security number.

In other words, an ITIN replaces a social security number that should only be used for tax purposes. The IRS issues ITINs to help taxpayers comply with U.S. tax laws and provide a means to efficiently process and account for tax returns and payments made by the resident and nonresident foreign taxpayers. ITINs have no other purpose than to report federal taxes.


What criteria are necessary to obtain an ITIN?

ITINs can help taxpayers avoid delays in filing U.S. income tax returns and withholding taxes. Taxpayers need an ITIN if they meet the following criteria:

  • The taxpayer belongs to one of the following categories: a nonresident alien who must file a U.S. income tax return or an alien residing in the United States who files a United States income tax return based on days of presence in the United States, or a dependent or spouse of a person in the United States, or a dependent or spouse of a nonresident foreign visa holder, or a nonresident alien claiming a tax treaty advantage, or a nonresident international student, professor, or researcher who files a U.S. income tax return.

  • The taxpayer does not have a social security number and is not entitled to receive it from the social security administration.

  • The taxpayer must provide a federal tax identification number or file a federal income tax return.

It is important to remember that ITINs expire. If you have to file a tax return in 2021 and your ITIN has expired or will expire before filing your taxes in 2021, you should submit a renewal request as soon as possible to avoid delays in processing your return.


How do I get an ITIN?

Unfortunately, obtaining an ITIN from the IRS can be a long and tedious process. Therefore, it is very important to apply for an ITIN as early as possible to avoid delays. To demonstrate a defined tax requirement for an ITIN, the general rule is that ITIN requests must be filed on the person's tax return before the due date of the tax return but can be made earlier to facilitate payments.

To obtain an ITIN, you must complete Form W-7, Request for Individual Tax Identification Number. The ITIN request requires documents proving the status of a foreigner and the identity of the person submitting the request. There are 13 specific types of documents accepted by the IRS as proof of identity and alien status. Of these 13 types of documents, only the passport serves as an independent document as proof of identity and foreigner status.

After completing the W-7 form, taxpayers can submit documents (example: real passport or certified copy of the document from the issuing agency), as well as the W-7 form (ITIN application file) and the declaration of the person's income at the IRS ITIN office, or they can arrange to meet with a designated local IRS office to meet with an IRS agent to personally process the ITIN package, tax return, and actual documents.

Alternatively, the person can use an IRS certification agent to handle the actual documents to verify the person's status and foreign identity instead of an IRS agent.

An acceptance agent is a person or entity authorized by the IRS to help taxpayers obtain their ITIN. Working with an IRS-licensed Certified Acceptance Agent (CAA) can help taxpayers save time and energy.

Taxpayers who choose to work with a certified acceptance agent are not required to present an original passport or a certified copy of the passport to the IRS. Instead, the CAA reviews the documentation and issues a Certificate of Accuracy (COA) sent to the IRS in place of all original documents.


Does an ITIN expire?

Yes, it expires. Starting in 2021, the IRS set an expiration date of December 31, 2020, for certain ITINs that will expire if not renewed. Check the list below to determine if you may need to renew your ITIN to file a tax return in 2021:

All ITINs that have not been used to file a federal income tax return in the past three years have automatically expired on December 31, 2020.

ITINs issued before 2013 and containing the following central digits have expired on December 31, 2020 (central digit example: 9XX-88-XXX): 88, 90, 91, 92, 94, 95, 96, 97, 98, 99.

To apply for or renew an ITIN number, eligible individuals must complete Form W-7 and verify all original identity documents and copies of original documents certified by IRS tax assistance centers or CAA. As soon as the W-7 form is completed, the application (most often) will be completed with the federal nonresident income tax return, where an ITIN code will be issued and assigned to the applicant.


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