What Is An ITIN Number?

The Internal Revenue Service (IRS) uses several different types of identification numbers for individuals and businesses. Most U.S. citizens are familiar with Social Security Numbers or Employer Identification Numbers, however, not everyone knows about the other types of federal tax ID numbers.

In this article, we discuss Individual Tax Identification Numbers, or “ITINS”. We breakdown what ITINs are, how they are used, and how they relate to Employer Identification Numbers (EINs). 

What Is An Individual Tax Identification Number (ITIN)?

Individual Tax Identification Numbers, or ITINs, are a type of unique tax ID number assigned by the IRS to individuals who need to pay taxes in the United States, but who are not eligible for a US Social Security Number. 

People who are typically eligible to obtain ITINs are either resident or nonresident aliens in the U.S., or their spouses and dependents. The IRS does not allow individuals who are already eligible for a Social Security Number to Receive an Individual Tax Identification Number. 

What Is An Individual Tax Identification Number Used For?

Individuals can use ITINs to pay taxes for income that they earn in the United States. This income can be earned through employment, or by doing business as a sole proprietor or a single-member LLC. 

Although an Individual Tax Identification Number does allow you to pay U.S. federal taxes, an ITIN does not provide access to Social Security benefits. 

Does An ITIN Allow You To Work In The U.S.?

No, having an ITIN does not authorize an individual to be able to work in the U.S. An Individual Tax Identification Number is different from a U.S. work permit or Employment Authorization Document (EAD). 

Individual Tax Identification Numbers are issued by the Internal Revenue Service (IRS), while Employment Authorization Documents are issued by United States Citizenship and Immigration Services (USCIS). 

How To Get An ITIN Number:

To obtain an Individual Tax Identification Number from the IRS, you need to complete an application and submit some additional documentation. 

Here are the documents that you will need in order to apply for an ITIN:

• Complete a Form W-7 – The Form W-7 is the Application for IRS Taxpayer Identification Number (ITIN). You will need to complete this form in its entirety to get an ITIN. 
• Federal Tax Return – You need to submit the completed Form W-7 along with the federal income tax return that you will be filing with the IRS. 
• Proof of Identity – You will need to provide the IRS with some type of identifying document in order to get an ITIN. 
• Foreign Status Document – The IRS requires documentation confirming your foreign status as either a resident or nonresident alien in the U.S. in order to issue an ITIN. 

Once you’ve gathered your documents and completed the Form W-7, you can mail the copies to the IRS, or make an appointment to visit an IRS Taxpayer Assistance Center in person.

Do I Need An ITIN Number?

Certain foreign residents living and working in the United States may be required to obtain an ITIN. Generally, if you are required to pay taxes on income earned in the U.S., and you are not eligible for a Social Security Number, you likely need to get an ITIN to meet your tax obligations.

You may need get an Individual Tax Identification Number if you meet one of the following descriptions:

• You are a resident or nonresident of the U.S. who needs to report U.S. based income on a federal tax return and you do not qualify for a SSN;
• You are a spouse or dependent of a resident alien or non-resident alien;
• Anyone living outside the U.S. who needs to file a U.S. tax return.

Do You Use An EIN or ITIN For Business?

You may use an ITIN instead of an EIN where an EIN is requested, however, not the other way around. You cannot use an EIN in place of an ITIN where an ITIN is required.

An “Employer Identification Number”, or EIN, is the type of IRS identification number assigned to business entities like LLCs and corporations. Business entities need to have an EIN number for several important functions, like opening business bank accounts, obtaining lines of credit, tracking payroll and obtaining business licenses..

Entrepreneurs often have questions about how an EIN works with an ITIN. Foreign residents operating businesses in the US often ask whether they are required to get an ITIN if they already have an EIN number for their company. 

This question comes from the fact that sole proprietors are able to use EIN Numbers instead of a Social Security Number in order to keep their personal finances separate from their business. Even single member LLCs must have an EIN to open a bank account.

Can You Work Legally With An ITIN?

Individual Tax Identification Numbers are not work permits. They do not authorize a foreign individual to be able to work in the United States. An ITIN can help you pay taxes on income you have earned in the U.S. However, simply having a tax ID number does not permit you to work.