For people who are not living in the US as residents or citizens, an ITIN is very important as it can help them open a bank account, get a head start on their credit history, or simply aid them in getting a driver’s license. However, not a lot of people know what ITIN is or what its purpose is.
In fact, most people aren’t even aware of some of the facts regarding an ITIN. So without further ado, here are some lesser-known facts about the ITIN that can help you understand the process clearly.Contact us.
Facts About the ITIN
- It was initially created for tax purposes by the IRIS in 1996 with the goal to give foreign citizens a chance to work in the US while complying with its tax laws.
- While ITIN serves a similar function to the SSN, in the sense that both are used for tax filing purposes, the two are not the same by any means. An SSN is issued to people who may be residents or citizens of the US and has several more benefits than an ITIN.
- The ITIN, like the SSN, is also a 9-digit number and is formatted the same way i.e., 9XX-XX-XXXX. However, the ITIN always begins with a 9 and has several numbers ranging from 50-65, 70-88, or 90-92.
- Several people living in the US have to have an ITIN, especially when they don’t have a lawful status. However, even if you’re living in the US, you must have an ITIN if you’re not eligible for an SSN. Examples of such people include a dependent spouse of a US citizen or a dependent of a foreign individual who wishes to work in the US.
- Having an ITIN doesn’t always get you a job nor can it be used to prove legal presence in the US. Moreover, it’s also not acceptable for legal immigration status.
Facts About ITIN and Taxes
- While people holding ITINs can pay taxes even with an SSN, they are not eligible for the public benefits associated with the tax such as the Earned Income Tax Credit, or the social security benefits such as retirement benefits. However, if or when the person does become eligible for social security, then the benefit that they will receive will be counted from the day they got their ITIN and will therefore, be eligible for a greater amount.
- As an ITIN holder, you are also eligible for the Child Tax Credit. Of course, this largely depends on your income level. If you have children between the ages of 6-17, you can get up to $3000 and if your child is under the age of 6, you can get an amount up to $3600.
- While you might not be eligible to get all the benefits that are associated with an ITIN, there are some benefits that you can still avail. The first one being an interest-bearing bank account. You can also get a driver’s license for yourself. However, not every state will give you a driver’s license based on the ITIN alone—you’ll have to check out your local DMV. And in the case that they do, you will have to show some proof such as a foreign passport or any other foreign government-issued identity.
- An ITIN is also useful in the sense that you can show it when you have to disclose how long you’ve been living in the United States. By having an ITIN on which you have filed tax returns, you can prove your case to the authorities without facing any hassle.
- Having an ITIN can encourage privacy and ensure that your information doesn’t get leaked anywhere or doesn’t find its way into the wrong hands. The ITIN has been designed to allow people to pay tax using the proper route. Moreover, the IRS keeps the numbers secret and doesn’t forward it to anyone, including the immigration authorities according to Section 6013. This is unlike SSN where one uses it for all kinds of financial transactions, which in turn offers a lower level of privacy.
Applying for an ITIN
Now that you know some of the advantages as well as the lesser-known facts regarding the ITIN, you should consider investing in one. It’s a straightforward process and one that won’t cost you a lot of time or money. Here are some ways you can get an ITIN:
- The first thing you will do is to get the W-7 application form and include a federal income tax return.
- Once you have all the documents in place, there are different ways you can send your documents. One is to mail it directly to the IRS and they will take it from there. The next step is to approach a Certifying Acceptance Agent. This would be an in-person service. One advantage of this is that you won’t have to mail your identity to the IRS. Lastly, you can also make an appointment with the Taxpayer Assistance Center and talk to them to help you out.
- Once you have submitted the form, wait for a couple of weeks—up to 7—for your ITIN to be issued. You can apply for your ITIN at any point during the year.
As you can see, several facts are not that well-known regarding ITIN. Moreover, there are several benefits of having the ITIN as well. So fill out an application today! If you’re still unsure of how to approach the process, you can always reach out to a professional who is available at reasonable rates to do the process for you. They’re licensed and can help you navigate the process, especially if your case isn’t that typical. So feel free to contact them, you’ll find there are several people qualified to help you out.More information please visit IRS website.