Some immigrants may need to take a simple extra step when filing their taxes: applying for an Individual Tax Identification Number (ITIN).
What is an ITIN?
ITINs are a substitute for Social Security numbers during tax filing. The Internal Revenue Service (IRS) assigns these to people so they can report federal taxes and receive the refunds they deserve.
- The ITIN is a nine-digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit (for example, 9XX-7X-XXXX).
- You will receive a mailed letter with your ITIN 6 – 8 weeks after applying. (The IRS does not send a card with the ITIN number any longer.)
- You cannot use an ITIN as a work authorization or to receive Social Security benefits.
- ITINs are not valid as identification and should not be given when applying for work.
Who needs an ITIN?
People who cannot get a Social Security Number may obtain an ITIN regardless of their immigration status or country of origin. By law, you cannot have an ITIN and a Social Security Number. If you are filing jointly with your spouse and/or claiming any dependents on your tax return, each of you must have an ITIN if you cannot get a Social Security Number.
If you have earned income in the United States and support dependents living in Mexico or Canada (but lived in your household for at least 6 months of last year), you should apply for an ITIN for each one of them and claim them on your tax return. This may decrease the taxes you owe or increase your refund.
Advantages of getting an ITIN
You can qualify for a refund for money that has been taken out of your paycheck for income taxes. This depends on your income, the amount that was withheld from your paycheck and the number of dependents you are claiming.
Filing your taxes can help you apply for residency in the future. The IRS wants individuals to file their taxes, regardless of their immigration status, so they do not share information about people who have an ITIN with the Bureau of Citizenship and Immigration Services.
Some financial institutions accept the ITIN to open bank accounts that pay interest and to apply for loans. Many people use an ITIN to establish their credit history and apply for loans to buy a car or house.
Even if you didn’t file your taxes in the past, you may qualify for a refund for three previous years once you receive your ITIN. However, you must have a Social Security Number to qualify for the Earned Income Tax Credit (EITC).