What is ITIN?

Definition

An Individual Taxpayer Identification Number (ITIN) is a nine-digit tax processing number issued by the IRS in the format 9XX-XX-XXXX. The IRS created ITINs in 1996 to enable individuals who are not eligible for a Social Security Number (SSN) to comply with US tax laws. An ITIN does not authorize employment in the United States, does not provide eligibility for Social Security benefits, and does not change the holder's immigration status. It serves one purpose: tax filing and reporting. Who Needs an ITIN: The most common scenarios requiring an ITIN include: a nonresident alien spouse of a US citizen who is electing to file a joint return (requiring the spouse to be treated as a US resident for tax purposes under IRC Section 6013(g)); a foreign national dependent claimed on a US tax return (such as a child who is not a US citizen and does not have an SSN); a nonresident alien filing a US tax return to report US-source income or to claim a refund of overwithholding; a foreign national who is a partner in a US partnership or a member of a US LLC; and a foreign investor receiving rental income or capital gains from US real property subject to FIRPTA withholding. For US-Canada cross-border families, the most common need is obtaining an ITIN for a Canadian spouse who wants to file jointly or for Canadian-born children claimed as dependents. Application Process (Form W-7): To obtain an ITIN, you file Form W-7 (Application for IRS Individual Taxpayer Identification Number) along with your federal tax return and original documents (or certified copies) proving your identity and foreign status. Required documentation typically includes a valid passport (which serves as a stand-alone document for both identity and foreign status) or a combination of two or more documents such as a national ID card, US or foreign driver's license, birth certificate, or US visa. If you do not want to mail original documents to the IRS (who may take 6-14 weeks to return them), you can use an IRS-authorized Certifying Acceptance Agent (CAA) who can verify your documents in person and submit certified copies. Processing Times: The IRS typically processes Form W-7 applications in 7-11 weeks, though processing times can extend to 14+ weeks during peak filing season (February through April). If you are filing a tax return with your ITIN application, the return is processed only after the ITIN is assigned, which can delay refunds significantly. For time-sensitive situations, the IRS offers an appointment system at Taxpayer Assistance Centers where you can apply in person and receive faster processing. Renewal Requirements: ITINs expire if they have not been used on a federal tax return for three consecutive tax years. Additionally, ITINs issued before 2013 have been subject to rolling expiration schedules. Expired ITINs must be renewed before filing — if you file with an expired ITIN, the return will be processed but any exemptions and credits related to the ITIN will be disallowed until the ITIN is renewed. Renewal uses the same Form W-7 with 'Renewal' checked in the reason section. Important Limitations: ITIN holders cannot claim the Earned Income Tax Credit (EITC). Children must have SSNs (not ITINs) to qualify for the refundable portion of the Child Tax Credit. However, ITIN holders can claim the non-refundable Child Tax Credit (up to $500 per qualifying dependent with an ITIN as the 'credit for other dependents'). ITIN holders also cannot e-file as primary or secondary taxpayers on a return in the first year of ITIN issuance — they must paper-file. ITIN vs. SSN: An ITIN is not a substitute for an SSN. If you become eligible for an SSN (for example, through a change in immigration status that authorizes employment), you must apply for an SSN and stop using the ITIN. Once you receive an SSN, notify the IRS so they can combine your tax records under the SSN. Filing under both an ITIN and SSN simultaneously can cause processing problems. Cross-Border Application: For US citizens married to Canadian nationals, obtaining an ITIN for the Canadian spouse is often the first step in cross-border tax planning. Filing jointly (with the Canadian spouse electing to be treated as a US resident) typically results in lower combined US tax than filing separately, and it enables the couple to claim the full standard deduction. The Canadian spouse must report worldwide income on the joint US return, but Foreign Tax Credits for Canadian taxes paid usually eliminate any additional US tax.

Related Forms

Common Mistakes to Avoid

• 1Not renewing an expired ITIN before filing, causing the return to be processed without exemptions and credits — potentially losing thousands in tax benefits
• 2Failing to apply for an ITIN for a Canadian spouse, preventing joint filing that would reduce the US tax bill significantly
• 3Mailing original identity documents (like a passport) to the IRS instead of using a Certifying Acceptance Agent — the IRS can take 6-14 weeks to return originals

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