An Individual Taxpayer Identification Number (ITIN) is a tax processing number, issued by the Internal Revenue Service, for certain resident and nonresident aliens, their spouses, and their dependents. It is a nine-digit number beginning with the number “9” and is formatted like an SSN (Social Security Number).
An ITIN is only available to individuals who are required to have a taxpayer identification number for tax purposes, but who do not have, and are not eligible to obtain, an SSN. You may be eligible for a Social Security Number if you are a US Citizen, a green card holder, or are an individual holding a work or student visa (lawful alien status).
The IRS will not process a tax return without a valid ITIN. Tax returns submitted without an ITIN are immediately returned to the taxpayer with a W-7 form. Processing of the return (and refunds for that matter) will be delayed until the return is submitted with a valid identification number or a correctly filled out W-7 form with supporting documentation.
Form W-7 must be completed, signed, and dated by the applicant. The form requests general information such as the applicant’s name, address, country of birth, citizenship, as well as the reason the form is being completed (ex. Nonresident alien filing a U.S. return, etc.). The IRS will not issue an ITIN without a valid tax reason. The completed W-7 application must be submitted to the IRS along with a valid U.S. Federal income tax return (or if eligible, specific documents for one of five exceptions to the tax return filing requirement).
Supporting documentation to substantiate the individual’s “identity” and “foreign status” must also be attached. The IRS has very specific requirements for what they will accept as identity documents and what they will accept as certified copies. More often than not, clients have completed Form W-7 only to have it returned to them by the IRS because of unacceptable, incomplete, or incorrectly certified documentation.
The IRS will only accept “copies” of identity documents if they are certified by the issuing agent, the issuing agent’s consulate, or persons approved as certifying acceptance agents for ITIN applications. Kotler van den Brink and Company has been a Certifying Acceptance Agent for the IRS since 1998. The IRS will not accept copies of documents that are certified by a notary or lawyer.
Once the W-7 application is completed with all the necessary supporting documentation, it is sent to the ITIN Operations Unit in Austin, Texas for processing. The IRS usually processes Form W-7 within 7 weeks of receipt, but it can take up to 12 weeks during the busy tax season.
ALERT: You may need to renew your ITIN: As of December 31, 2020, all ITIN’s, issued before 2013, with the middle digits of 70 to 99, have expired. (Example: 9XX-94-XXXX). All expired ITIN’s must be renewed before being used on a U.S. tax return. Additionaly, All ITINs that have been issued and are not used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return. (Example: ITIN’s not used to file a federal U.S. tax return in 2018, 2019 or 2020 expired December 31, 2021.)
If your ITIN is only used on information returns filed with the IRS by third parties, you are not required to renew your ITIN.
ALERT: Does your spouse or dependent need to renew their ITIN?: For tax years after December 31, 2017, spouses and dependents are not eligible for a new ITIN or to renew an ITIN, unless they qualify for an allowable tax benefit, or they file their own tax return. As ITIN’s are not eligible for most allowable tax benefits, having an ITIN for your spouse or dependent, not living in the U.S, is not beneficial in most cases.
In addition, spouses and dependents cannot renew in advance; for spouses and dependents who reside outside of the U.S. and need to renew their ITIN to claim an allowable tax benefit, their name must be listed on a U.S. Federal tax return with the schedule or form that applies to the allowable benefit, and it must be attached to the ITIN application. The passport isn’t a stand-alone document for a dependent if there is no date of entry into the United state; If the applicant is a resident of Canada, one additional document listed in the “Supporting Documention” table (example: civil birth certificate) must be sumitted with the passport to prove residency. (applicants claimed as dependents must prove U.S. residency unless the applicant is from Canada or Mexico or is a dependent of U.S. military personnel stationed overseas.)