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Understanding ITIN for Illegal Immigrants: What You Need to Know in 2024

Ready to discover the significance of ITIN for illegal immigrants, including their use, requirements, and implications for tax filing and financial matters?

The Individual Taxpayer Identification Number (ITIN) is a unique tax-processing identifier issued by the Internal Revenue Service (IRS) to ensure tax compliance, even for individuals, including undocumented immigrants, who lack a Social Security number (SSN) or have uncertain immigration status.

An ITIN is a substitute for an SSN, specifically designed for those ineligible for the latter. Assigned by the IRS since July 1996, ITINs are essential for foreign nationals and other individuals residing in the United States who must fulfill tax obligations but lack SSNs.

ITINs differ from SSNs in their format, always commencing with 9 and comprising nine digits. While resembling SSNs in appearance (9XX-XX-XXXX), ITINs have specific digit ranges for the fourth and fifth positions.

ITINs are not exclusive to undocumented immigrants; they are also obtained by individuals lawfully residing in the U.S. who require tax compliance but are ineligible for SSNs. This includes foreign nationals on temporary visas, students, professors, researchers, dependents, or spouses of U.S. citizens or lawful permanent residents. Ultimately, ITINs facilitate tax filing and ensure compliance with U.S. tax laws for diverse individuals, irrespective of their immigration status.

ITIN for Illegal Immigrants
ITIN for Illegal Immigrants

ITINs do NOT provide legal status or work authorization.

An ITIN does not provide legal immigration status and cannot be used to prove legal presence in the United States.

An ITIN does not provide work authorization and cannot be used to prove work authorization on an I-9 form.

ITIN holders pay taxes.

ITINs let people without SSNs pay taxes. According to the IRS, in 2015, “4.4 million ITIN filers paid over $5.5 billion in payroll and Medicare taxes and $23.6 billion in total taxes.”

ITIN holders are not eligible for all the tax and public benefits that U.S. citizens and taxpayers can receive. For example, an ITIN holder is not eligible for Social Security benefits or the Earned Income Tax Credit (EITC). However, suppose that person becomes eligible for Social Security in the future (for example, by becoming a lawful permanent resident). In that case, the earnings reported with an ITIN may be counted toward the amount he or she is eligible to receive.

Some ITIN holders are eligible for the Child Tax Credit (CTC). According to federal legislation passed in March 2021, the CTC may be worth up to $3,600 for each child under 6 and up to $3,000 for each child aged 6 to 17, depending upon the applicant’s income. Because ITIN holders are eligible for the CTC, the IRS estimated 2014 that up to 4 million U.S. citizens and children of ITIN holders benefit from the tax credit. If a child does not have an SSN, he or she is not eligible for the tax credit.

Other Purposes of an ITIN:

1. Opening an interest-bearing bank account: Individuals without a Social Security number (SSN) but possessing an ITIN may qualify to open interest-bearing bank accounts.

2. Securing a driver’s license: Some states accept ITINs as an alternative to SSNs for obtaining a driver’s license, driver’s permit, or state identification card.

3. Providing proof of residency: In the future, immigrants may need to demonstrate their duration of residence in the United States. Filing a tax return using an ITIN can serve as evidence of residency.

Is the ITIN Used for Tracking Undocumented Immigrants?

The ITIN is not utilized as an immigration-enforcement tool. Its primary purpose is to facilitate tax payment, and the IRS generally maintains privacy regarding applicants’ information, refraining from sharing it with immigration enforcement agencies. Taxpayer privacy is safeguarded under Section 6103 of the Internal Revenue Code, which restricts the IRS from disclosing taxpayer information to other government entities, except under specific circumstances related to tax administration or non-tax criminal investigations.

How does one apply for an ITIN?

To apply for an Individual Taxpayer Identification Number (ITIN), individuals must follow these steps:

1. Fill out a W-7 application form provided by the IRS.

2. Submit the completed W-7 form and a completed tax return to the IRS.

3. Provide documents to the IRS to verify identity and “foreign status.” The IRS has specified a list of 13 acceptable documents for this purpose.

4. Choose one of the following methods to apply:

Apply by mail or private delivery service, sending original documents (or certified copies) to the IRS. Applicants must await the return of their documents.

Seek assistance from an Acceptance Agent (AA) authorized by the IRS to help complete and file the W-7. Original documents (or certified copies) must be submitted to the IRS through the AA.

Utilize a Certifying Acceptance Agent (CAA) authorized by the IRS to authenticate documents. With a CAA, applicants can retain their original documents.

Apply in person at a Taxpayer Assistance Center (TAC), where IRS staff can authenticate documents. Applicants can keep their original documents when applying at a TAC.

5. Once the IRS approves the application, the ITIN is mailed to the applicant.

6. Remember that if an individual obtains an ITIN but fails to include it on a federal tax return for three consecutive years, it will expire and require revalidation. Expired ITINs have a middle digit between “70” and “87.”

What Documents Do I Need to Submit to Apply for an ITIN?

To apply for an Individual Taxpayer Identification Number (ITIN), you must provide specific documents to verify your identity and foreign status. These documents are crucial to confirming your identity and ensuring U.S. tax laws compliance. Here’s what you’ll need to submit:

1. Fill out Form W-7: Complete the required Form W-7, available in both English and Spanish. Make sure to carefully follow the instructions provided in the form.

2. Proof of Identity: Provide an unexpired document containing your photograph, such as a passport or driver’s license. This document serves to confirm your identity.

3. Proof of Foreign Status: Submit an unexpired document demonstrating your connection to a foreign country. This requirement underscores the purpose of the ITIN, which allows foreign nationals or individuals from other countries to fulfill their U.S. tax obligations. For example, you can use an unexpired passport from your home country to fulfill both identity verification and proof of foreign status requirements.

4. Complete Federal Tax Return: Along with the Form W-7, complete your federal tax return as required.

5. Submit Application to IRS: Attach your completed Form W-7 and supporting documents to your tax return and submit them to the IRS.

By providing these documents and completing the necessary forms, you can apply for an ITIN and ensure compliance with U.S. tax regulations. Remember, an unexpired passport from your home country can satisfy both the requirement for photographic proof of identity and proof of foreign status in a single step.

Can I Provide a Regular Copy of My Documents?

No, regular copies of documents are not acceptable. The IRS requires either original documents or certified copies for each of the required documents. A certified copy is a duplicate of the original document issued by the relevant government agency, certifying its accuracy and authenticity.

How Do I Submit Original Documents?

You have two options for submitting original documents to the IRS: mailing them with your application or scheduling an appointment to present them in person through the IRS website. While the IRS will return your original documents if you mail them, it’s advisable to consider the risks involved in mailing original documents to a government agency. Opting for an appointment may offer greater peace of mind.

To apply for an ITIN, you must submit Form W-7 with your tax return and provide unexpired documentation demonstrating your identity and foreign status. These documents must be original or certified copies, which you can submit by mail or during an appointment with the IRS. At least one of the documents should contain your photograph.

Though the process may seem complex initially, the key takeaway is that undocumented individuals can obtain an identification number through an ITIN, enabling them to open bank accounts or apply for credit cards.

Conclusion on ITIN for Illegal Immigrants

The Individual Taxpayer Identification Number (ITIN) is a critical tool for tax compliance among individuals ineligible for a Social Security Number (SSN), including undocumented immigrants. While ITINs do not confer legal status or work authorization, they enable individuals to fulfill their tax obligations in the United States. Despite their limitations, ITINs facilitate various financial transactions, such as opening bank accounts and obtaining certain state-issued documents like driver’s licenses.

However, it’s essential to recognize that ITINs are solely for tax purposes and do not serve as valid identification outside the federal tax system. Moreover, individuals with valid SSNs or DACA recipients with SSNs obtained through the program should not apply for or renew an ITIN. Overall, understanding the role and limitations of ITINs is crucial for individuals navigating the complexities of the U.S. tax system, especially for those without legal immigration status.

Frequently Asked Questions on ITIN for Illegal Immigrants

1. Can undocumented individuals apply for an ITIN?

Yes. Individuals not eligible for a Social Security Number (SSN) may apply and file for an ITIN.

2. How do I apply to get an ITIN?

Visit the IRS website for instructions on how to apply for an ITIN. Due to the complexity of the process, it’s advisable to work with an IRS-authorized Certifying Acceptance Agent or schedule an appointment at a designated IRS Taxpayer Assistance Center.

3. Are ITINs valid for identification?

No. ITINs are strictly for tax processing and are not valid for identification outside the federal tax system. They do not meet the same standards as genuine identity certification documents like state IDs, driver’s licenses, passports, or green cards.

4. Can I open a bank account with an ITIN?

Yes. Some banks accept ITINs instead of SSNs for opening accounts. However, you still need to provide other forms of identification. Contact your local bank or credit union to confirm acceptance of ITINs and inquire about required IDs.

5. Do ITINs enable someone to work legally?

No. ITINs are solely for federal income tax purposes and do not grant legal work authorization in the United States.

6. Can ITINs be used to obtain a state driver’s license as proof of identification?

No. ITINs are not recognized as valid identification outside the federal tax system. Some states may accept them as part of a driver’s license application or residency verification, but they are not a primary form of ID.

7. Who should renew their ITIN?

Individuals who have not used their ITIN on a federal tax return in the last three years should renew. ITINs issued before 2013 are expiring on a rolling schedule.

8. When does ITIN renewal begin?

Renewal of ITINs began on January 1, 2017.

9. Which ITINs are expiring?

ITINs with middle digits 78 and 79 (e.g., 9NN-78-NNNN) are expiring. Taxpayers with these ITINs received Letter 5821 from the IRS in Summer 2016.

10. How do I renew my ITIN?

Complete your federal tax return, fill out the W-7 form, and provide original documentation (or certified copies) supporting the information provided on Form W-7.

11. Should I apply for or renew an ITIN if I have a valid SSN?

No. Individuals with a valid SSN are ineligible for an ITIN, as the SSN remains valid even if work authorization expires.

12. Should I apply or renew an ITIN as a DACA recipient?

No. If you have obtained DACA and used it to obtain an SSN, you should not apply for or renew an ITIN. The assigned SSN remains valid regardless of DACA status.

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