What is the process to obtain the US Individual Taxpayer Identification Numbers (ITINs)?

What is the process to obtain the US Individual Taxpayer Identification Numbers (ITINs)?

US Individual Taxpayer Identification Number is an Identification Number which is used by the IRS (Internal Revenue Service) for the administration required in the field of tax laws. ITIN is a nine-digit number that is issued either by the SSA (Social Security Administration) or by the IRS. ITIN is issued by IRS to those individuals who must have a US taxpayer identification number but do not qualify to obtain SSN (Social Security Number)from the SSA.

Why do you need ITIN?

When you are working in the US and earning in the US, but you do not qualify to obtain an SSN, then the ITIN will be helpful during your filing for tax returns.

Let us find out what does an ITIN does.

1. If you qualify to obtain a tax refund from the IRS, then ITIN will help you in obtaining a refund.
2. ITIN will help you to file your taxes and help the qualifying dependents to claim the tax benefits.
3. Moreover, ITIN can help you to apply for a mortgage loan or open a bank account.

Eligibility for obtaining ITIN

 You should be falling into these below-mentioned categories to obtain the ITIN.

1. You should be a non-resident alien who needs to file a US tax return.
2. You must be a US resident alien who has to file a US tax return.
3. You should be a dependent or the spouse of a US citizen or resident alien.
4. You must be a dependent or spouse of a non-resident alien VISA holder such as H4 VISA.
5. You should be a non-resident alien who is claiming a tax benefit.
6. You should be a non-resident alien student, researcher or professor filing a US tax return or for claiming an exception.

Procedure to obtain ITIN

• For the process of applying for ITIN, you will need the below-mentioned documents.

1. Form W-7
2. IRS Application for Individual Tax Identification Number.
3. Your federal tax return. But, if you are eligible for an exception then you must provide the supporting documents as well for the exception.
4. Original documentation from the issuing agency for proof of your identity and foreign status.

• Since, you will be filing your tax returns in the form of an attachment to your ITIN application you should avoid mailing your filled form to the address which is mentioned in Form 1040, Form 1040A or even Form 1040EZ.
• You can send your Form W-7, tax return, and other documents either to the mailing address mentioned in Form W-7 or submit it at the walk-in offices of the IRS. You can also get your form and documents processed by an agent who has been appointed by the IRS.
• These Acceptance Agents are those entities such as colleges, financial institutions, accounting organizations, etc. who help the ITIN applicants in obtaining ITIN. These Acceptance Agents would review the application forms and would forward them to IRS for further processing.

Timeline within which ITIN must be applied

When you are ready to file your Federal Income Tax Return, you should also complete your Form W-7. This needs to be done as the return would be needed to be attached to FormW-7.

If you are qualifying for any of the exceptions, then you do not need to file a tax return. You would only submit Form W-7 along with those supporting documents which provide proof for the exception. An applicant is allowed to apply for ITIN during any time of the year but if you need to attach the tax return to Form W-7 and that tax return is filed after the due date then you might have to pay penalties.

When will you receive your ITIN?

 The IRS usually takes a time of around two months to complete the processing of the ITIN form. If your documents and details are correct, then your form would be processed and ITIN would be sent to your mailing address approximately within two months.

However, if even after 2 months you do not receive your ITIN or any other document/correspondence from IRS then you can call IRS at the Toll-free number and enquire about your ITIN application.

Hence, ITIN is very much necessary for tax return and if you are filing your tax return with an expired ITIN then your request would be processed but you will not receive any tax exemptions or credit claims.

Reference

1. https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin
2. https://www.hrblock.com/tax-offices/tax-prep/itin-application.html
3. https://internationalcenter.umich.edu/resources/tax/getting-itin
4. https://studyinthestates.dhs.gov/what-is-an-itin
5. https://www.immihelp.com/itin-individual-taxpayer-identification-number/