was prepared by Educators for Fair Consideration (E4FC). The purpose of this guide is to provide information and updates about the IRS's Individual Taxpayer Identification Number (ITIN).
- An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service.
- The Internal Revenue Service (IRS) issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security number (SSN) from the Social Security Administration (SSA).
- ITINs allow individuals ineligible for an SSN to (1) report their earnings to the IRS, (2) open interest-bearing bank accounts with certain banks and, (3) conduct business in the U.S.
- The IRS issues ITINs regardless of immigration status, because both citizens and noncitizens may have a U.S. tax filing or reporting requirement under the Internal Revenue Code.
- ITINs are intended primarily to facilitate federal tax reporting. An ITIN does not authorize work in the U.S. or provide eligibility for Social Security benefits or the Earned Income Tax Credit.
DOWNLOAD THE GUIDE HERE http://www.e4fc.org/images/ITIN_Guide.pdf
QUESTIONS & ANSWERS:
Can undocumented individuals apply for an ITIN? Yes. Any individual not eligible for a SSN may apply and file for an ITIN.
Who is eligible to apply for ITIN? Individuals who identify with one the following categories may file for an ITIN:
» Does not have a SSN and are not eligible to obtain one
» Nonresident alien who is required to file a U.S. tax return
» U.S. resident alien who is (based on days present in the United States) filing a U.S. tax return.
» Dependent or spouse of a U.S. citizen/resident alien.
» Dependent or spouse of a nonresident alien visa holder.
Are ITINs valid for identification? No. ITINs are not valid identification outside the federal tax system. Since ITINs are strictly for tax processing, the IRS does not apply the same standards as agencies that provide genuine identity certification (e.g. state IDs/ driver’s license, passports, green cards, etc.).
Can I open a bank account with an ITIN? Yes. Some banks will accept the ITIN instead of the SSN. However, you still need to provide some form of identification. We suggest calling or visiting your local bank or credit union to ensure they accept the ITIN and inquire about the types of ID they accept.
Do ITINs enable someone to work legally? No. ITINs are for federal income tax purposes only. Getting an ITIN does not change your immigration status or your authorization to work in the United States.
Can ITINs be used as proof of identification to obtain a state driver’s license? No. ITINs are not valid for identification outside the federal tax system. However, some states may accept the ITIN as part of the driver’s license application or verification of residency.
Who should renew their ITIN? Anyone who has not used their ITIN on a federal tax return at least once in the last three years should renew. All ITINs issued before 2013 will begin expiring this year based on a rolling schedule. You will be notified via postal mail (using the address on your most recent income tax form on which the ITIN appears) if your ITIN is expiring.
When does renewal of ITINs begin? January 1, 2017.
Which ITINs are expiring? Individuals who hold ITINs with middle digits of 78 and 79 (e.g. 9NN-78-NNNN). The IRS began sending Letter 5821 to taxpayers with these expiring ITINs in Summer 2016.
When may I renew my ITIN? Taxpayers whose ITINs will expire on January 1, 2017 can begin the renewal process beginning October 1, 2016.
How do I renew my ITIN? Complete your federal tax return, complete W-7 form and provide original documentation (or certified copies of the documentation from the issuing agency) required to support the information provided on Form W-7.
Should I apply or renew an ITIN if I have a valid SSN? No. Any person who applied for and received an SSN will no longer be eligible for an ITIN, since his/her SSN remains valid, even if his/her work authorization expires.
Should I apply or renew an ITIN if I am a DACA recipient? No. If you obtained DACA and used it to get a SSN you should not continue to use or renew your ITIN. Regardless of the possible termination of DACA, the assigned SSN will remain your SSN even if the individual’s work authorization terminates.
A new policy was introduced on June 30, 2016, but it became obsolete with the passage of the Tax Hikes Act of 2015 (PATH Act), enacted on December 18, 2015. The new law states that ITINs that have not been used on a federal tax return at least once in the last three years would no longer be valid for use on a tax return unless renewed by a taxpayer. In addition, ITINs issued prior to 2013 and not used on a federal tax return in the last three years need to be renewed starting October 1, 2016, based on a rolling renewal schedule.
What May Happen if an ITIN is Not Renewed Some individuals may not be aware that their ITIN has expired or that they must renew an expired ITIN. According to the IRS, returns filed by these individuals will be accepted by the IRS; however, there may be a delay in processing these returns, and certain credits, such as the Child Tax Credit6 and the American Opportunity Tax Credit7 , may not be allowed unless the ITIN is renewed. This could result in a reduced refund or additional penalties and interest. The IRS will notify these filers about the delay and any reduction in refunds and credits claimed and will inform them about the need to file Form W-7 to renew their ITIN.
Can I use both ITIN and SSN? No. Holders of Expired ITINs Who Have Obtained or Become Eligible for a SSN An individual with an expired ITIN who has obtained or become eligible for an SSN (for example through DACA) should not renew the ITIN and should discontinue using it. It is improper to use both the ITIN and the SSN assigned to the same person to file tax returns.
How to Notify the IRS About Your New SSN? It is your responsibility to notify the IRS so it can combine all of your tax records under one identification number. If you do not notify the IRS when you are assigned a SSN, you may not receive credit for all wages paid and taxes withheld, which could reduce the amount of any refund due. Individuals who become eligible to obtain a SSN (i.e. DACA or permanent residents) should obtain one from the Social Security Administration (SSA) and visit a local IRS office, or write a letter explaining that you have now been assigned a SSN and want your tax records combined. Include your complete name, mailing address, and ITIN along with a copy of your social security card and a copy of the CP 565, Notice of ITIN Assignment, if available. The IRS will void the ITIN and associate all prior tax information filed under the ITIN with the SSN. Send your letter to: Internal Revenue Service Austin, TX 73301-0057 Note: In addition to sending a letter to the IRS, you may also send letters to the credit agencies requesting to change your ITIN to a SSN. The letter should include name, mailing address and copies of your ITIN, SSN and identification.
Information Specific to DACA Recipients. DACA recipients are eligible to receive a social security number (SSN) and therefore should not continue to use or renew their ITIN. Regardless of the possible termination of DACA, the assigned SSN will remain their SSN even if the individual’s work authorization terminates. As stated above, all people who have obtained a SSN should send letters to the IRS and credit agencies requesting to transfer all tax and credit history from the ITIN to their SSN.
How to apply for ITIN? This information comes directly from the IRS, for additional information see the updated online instructions (Instructions for Form W-7 (09/2016), https://www.irs.gov/ instructions/iw7/index.html ). You may file or renew an ITIN by completing Form W-7 (Application for IRIS ITIN, https://www.irs.gov/pub/irs-pdf/ fw7.pdf ), which you may download for free on the IRS website. The form and instructions were updated September 2016, so make sure to download and complete the most current version of the forms. The form requires supporting documentation to prove foreign status and identity. The documentation you provide must meet the following requirements:
1. You must submit documentation to establish your identity and your connection to a foreign country (“foreign status”). Applicants claimed as dependents must also prove U.S. residency unless the applicant is from Mexico or Canada or the applicant is a dependent of U.S. military personnel stationed overseas.
2. You must submit original documents, or certified copies of these documents from the issuing agency, that support the information provided on Form W-7. A certified document is one that the original issuing agency provides and certifies as an exact copy of the original document and contains an official stamped seal from the agency. You may be able to request a certified copy of documents at an embassy or consulate. However, services may vary between countries, so it is recommended that you contact the appropriate consulate or embassy for specific information.
3. Note: Original documents you submit will be returned to you at the mailing address shown on your Form W-7. You don’t need to provide a return envelope. Applicants are permitted to include a prepaid Express Mail or courier envelope for faster return delivery of their documents. The IRS will then return the documents in the envelope provided by the applicant. If your original documents aren’t returned within 60 days, you can call the IRS (see Telephone help, earlier). If you will need your documents for any purpose within 60 days of submitting your
Processing times. Allow 7 weeks for the IRS to notify you of your ITIN application status (9 to 11 weeks if you submit the application during peak processing periods (January 15 through April 30) or if you’re filing from overseas). If you haven’t received your ITIN or correspondence at the end of that time, you can call the IRS to find out the status of your application.
Telephone help. Call 1-800-829-1040 if you’re in the United States. If you’re outside the United States, call 267-941-1000 (not a toll-free number) for assistance.
ITIN GUIDE http://www.e4fc.org/images/ITIN_Guide.pdf