What is ITIN? What does it do and how to get it?
ITIN stands for "Individual Taxpayer Identification Number" and means "Individual Tax Identification Number" in Turkish. It is used in the US by individuals who do not have or are not entitled to a Social Security Number (SSN) but are taxpayers. Consisting of 9 digits and starting with the number 9, the individual tax identification number is provided by the IRS (Internal Revenue Service ).
Since 1996, the ITIN number has been used for federal income tax filers, whether they live in the United States or not. For this reason, it is independent of immigration status. Only by obtaining an ITIN number, one cannot gain rights such as the right to earn income and work in the USA. LLC (Limited Liability Company) is also important for those who own or plan to establish a company in the structure.
Who Should Have an ITIN?
The IRS (US Internal Revenue Service or Internal Revenue Service) developed the ITIN number to facilitate individuals who do not have an SSN but need to file federal taxes. The main situations where an ITIN is required are:
- Foreign persons residing in the U.S. who are not entitled to an SSN and are required to file a tax return
- Foreign persons residing outside the United States who are required to file a tax return
- Foreign individuals who have resided in the US for a period of time and are required to file a tax return
- Foreign dependent or spouse of a U.S. citizen
- Responsible person or spouse of the foreign resident (in the US)
- Foreign academic researchers or students who are required to file US tax returns
- People who need online payment systems such as Paypal
How to Get an ITIN Number?
It is possible to apply for an ITIN at any time of the year. Consulting companies that implement the necessary procedures on behalf of applicants to obtain an ITIN number make things easier. The seemingly complex application process can thus be more easily overcome for people with commercial and legal activities in the US. The IRS does not accept electronic applications for ITINs.
The application process starts with obtaining a W-7 form from the IRS. Along with the completed W-7 form, a passport or foreign status document must be sent to the IRS. The documents must not be expired. Before 2012, it was enough to send a notarized copy of the passport. However, with the change, it is now necessary to send the original passport that has not expired.
The IRS sends the required documents back to the address indicated on the W-7 form within 60 days of receiving the original documents. For documents that are not returned, you can contact the IRS at 800-829-1040 (US) and 267-941-1000 (non-US). You can also increase the chances of your application being approved with a current US visa, tax return form, and a document introducing yourself and your company.
If the applicant has plans to travel to the US, they can make an appointment with the IRS and apply in person. In this way, the problem of proving the authenticity of the person will be eliminated. It also eliminates the need to send original documents such as passports. The result of the application is sent to the address specified by the applicant on the form.
How Long Does ITIN Application Take?
In the past, it could take up to 10 - 12 weeks to receive the ITIN number after the application was finalized. Today, this has been reduced to an average of 8 weeks. If all the documents have been submitted in full and the IRS is satisfied that the application meets the IRS requirements, the result of the application is notified in 7 to 8 weeks. The total application process can take up to 16 weeks.
Does ITIN Expire?
Until the 2012 decision, the ITIN number had no expiry date. As of 2012, the ITIN number was extended to 5 years. A new decision published in 2014 stipulated that the ITIN number must not have been used for 5 years. After 5 years of inactivity, ITIN numbers expire and the same number can be assigned to someone else.
According to the latest decision taken in 2016, ITIN numbers that have not been processed for 3 years expire. To prevent this, ITIN numbers that have not been processed must be renewed. Beforehand, the IRS sends a notice explaining the expiration date. Individuals who do not request a renewal within the specified time period may have their ITINs canceled or assigned to another individual.
How to Fill in the W-7 Form?
It is possible to access the pdf format of the form by searching for "IRS W-7" form through search engines or through the official website of the IRS. After opening the form, it is necessary to check the "nonresident" option at the top. After the first and last name section, the address of the real or virtual office in the US is entered in the address line.
Section 3 of the form contains spaces for foreigners to enter the address where they live in their country. After sections 4 and 5, which include identity and gender information, section 6 requires the selection of the type of document applied for. This document type includes passport, driver's license or ID. After adding the country code and phone number, the form filling process is completed. Finally, the printed form is signed. It is absolutely necessary to use only English characters when filling out the form.
What can be done with an ITIN Number?
In the US, the ITIN number can be used to buy and sell a vehicle, buy and sell or rent a house, get a credit card, make bank transactions, pay company taxes. In some states, it can also be used to obtain a driver's license and receive a dependent tax deduction. However, the ITIN does not provide the benefits of a social security number (SSN). Rights such as the right to work or social security benefits cannot be obtained with an ITIN.
What are the Documents Needed for ITIN Application?
Documents required for ITIN applications include a completed W-7 form, valid passport, open business address with postal code, EIN number (Federal Identification Number), company documents, current US visa if applicable, statement of authorized person (US Federal Tax Return) and application petition.
