Tax-Filing: Here’s What to Know About ITINs and the Form W-7

Individual taxpayer identification numbers, or ITINs, are used to differentiate and identify taxpayers who aren’t eligible for a Social Security number.

If you use an ITIN, take a moment to verify whether it’s set to expire at the end of 2020. More than 1 million ITINs expire Dec. 31, and renewing your ITIN promptly by filing a Form W-7 will help you avoid delays and get your tax refund more quickly and efficiently.

If you’re confused about this process, here’s what to know about ITINs, W-7s and the process of renewing or applying for an ITIN.

[See: 15 Tax Questions — Answered.]

What Is an ITIN?

An individual taxpayer identification number is an individualized code to identify taxpayers who aren’t eligible for a Social Security number.

“It’s for individuals who are either not allowed or not eligible to get a Social Security number, or who don’t need a Social Security number,” says Mark Jaeger, director of tax development at tax software company TaxAct.

The IRS uses ITINs to more efficiently process tax returns and payments for a certain subset of taxpayers, often noncitizens and other foreign individuals who interact with the U.S. tax system. They are used solely for federal tax reporting, according to the IRS.

You cannot use an ITIN for these purposes:

— To authorize work in the United States.

— To receive Social Security benefits.

— To qualify a dependent for earned income tax credit purposes.

An ITIN is just one of several identification numbers federal agencies and the IRS use to differentiate taxpayers. Other identification numbers include:

Taxpayer identification number. This term is used by the IRS to refer to a range of taxpayer identification numbers, such as Social Security number, Employer Identification Number and ITIN.

Social Security number. This is a common identifier for individual taxpayers. To apply for a Social Security number, you must submit evidence of your age, U.S. citizenship or lawful alien status.

Employer identification number. An EIN is used by the IRS to identify a business and some estates and trusts.

[See: 9 Red Flags That Could Trigger a Tax Audit.]

Do I Need an ITIN?

You may need an ITIN if you aren’t eligible for a Social Security number but are required to file a federal tax return or provide a federal tax identification number in another situation.

People who may need an ITIN are often not U.S. citizens. According to the IRS, ITIN holders include folks in these situations:

— Nonresident alien who files a federal U.S. tax return.

— U.S. resident alien (based on the number of days spend in the country) who needs to file a tax return.

— Spouse or dependent of a U.S. citizen or resident alien.

— Spouse or dependent of a nonresident alien visa holder.

— Nonresident alien claiming a tax treaty benefit.

— Nonresident alien student, professor or researcher who files a tax return or claims an exception to the tax-filing requirement.

If you’re unsure whether you need an ITIN, it can make sense to work with a tax preparer who specializes in taxes for noncitizens.

How Do I Apply for an ITIN?

To get an ITIN, you must file the Form W-7, which is the IRS application for an individual taxpayer identification number. Applicants can apply by mail, through an acceptance agent or in person at an IRS Taxpayer Assistance Center, which are open via appointment during the coronavirus pandemic.

The form itself is just one page and asks for identifying information such as:

— Mailing address.

— Foreign address.

— Birth information.

— Country or countries of citizenship.

What is more complicated is that you’ll need to send supporting documents to verify your identity and nationality.

If you have to travel to an embassy or consulate, especially during the coronavirus pandemic, it can be challenging. “Just the process of actually getting the documentation to submit with the W-7 is now more cumbersome,” says Ryan L. Losi, certified public accountant and executive vice president of Piascik, an accounting firm in Glen Allen, Virginia.

These documents may be originals or certified copies, which can require a visit to an embassy or a consulate. If you send an original copy, the IRS is supposed to return it within 60 days of your application.

Supporting documents you may submit with the W-7 include current versions of these:

— Passport.

— U.S. Citizenship and Immigration Services photo identification.

— Visa issued by the U.S. Department of State.

— U.S. or foreign driver’s license.

— U.S. or foreign military identification card.

— National identification card.

— U.S. state identification card.

— Foreign voter registration card.

— Civil birth certificate.

— Medical records (valid only for dependents under age 6).

— School records (valid for dependent students under age 18).

Which paperwork you submit will depend on your individual situation. At least one document must contain an image of you unless you’re a dependent under age 14 (or 18 if a student).

How Much Does It Cost to Apply for an ITIN?

Applicants can download a W-7 at no cost on the IRS website. Those who work through a tax preparer or tax software company may pay an additional fee.

For example, the fee for filing a W-7 with Losi at Piascik is a flat $1,000, with the guarantee that they will see the application through to the end, Losi says. At TaxAct, the W-7 is included in your software fee.

You may pay additional mailing fees, rush fees or shipping costs, plus potential fees for copies of important documents.

[Read: How to File Back Taxes.]

Expiring ITINs and ITIN Renewals

At the end of 2020, more than 1 million ITINs are set to expire. Submitting your W-7 on time will help you avoid tax refund delays, according to the IRS.

The ITINs expiring at the end of 2020 include these:

— ITINS not used on a federal tax return in the last three consecutive years.

— ITINs issued before 2013.

To identify an ITIN that will expire, look at your number. Those with the middle digits 88 will expire on Dec. 31, 2020. Additionally, ITINs with the middle digits 90, 91, 92, 94, 95, 96, 97, 98 or 99, which were assigned before 2013 and have not already been renewed, will expire at the end of the year.

If you expect to have to file a U.S. tax return in 2021, and your identification number is expiring, submit a renewal application by completing the Form W-7 and including all required documents.

If you forget to renew your ITIN, your tax return will be processed but certain tax credits and exemptions won’t be allowed. Says Losi: “Plan ahead, understand it takes some time to get these documents filed, to get the number issued, and then you’re good.”

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Tax-Filing: Here’s What to Know About ITINs and the Form W-7 originally appeared on

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