ITIN Center

 

What is a U.S. Individual Tax Identification Number (ITIN)?

 

An individual tax identification number (ITIN) is a unique nine-digit tax processing number issued by the U.S. Internal Revenue Service. It’s assigned to individuals who need a tax identification number for different reasons. To be eligible for an ITIN, an individual must not be eligible for a U.S. Social Security Number (SSN). An ITIN is issued irrespective an individual’s immigration status. Both resident aliens and nonresident aliens of the U.S. may have a federal tax filing or payment responsibility under U.S. tax laws. Both sets of individuals may be eligible to receive an ITIN.

 

When would a Canadian need a U.S. Individual Tax Identification Number (ITIN)?

There are many reasons an individual may need an ITIN. For instance, obtaining an ITIN helps eligible Canadians receive certain U.S. payments and comply with U.S. tax laws. Canadians may need a U.S. ITIN because of a tax filing or tax reporting requirement. Individuals who are not eligible to receive a SSN may need to apply for an ITIN. This includes individuals:

• who need to file a U.S. tax return but live outside the U.S.
• wanting to start a business in the U.S.
• wanting to open a U.S. bank account
• who are students in the receipt of U.S.-sourced income
• intending to become an Amazon licensed seller
• who are dependents or the spouse of a U.S. citizen or resident alien
• wanting to claim a treaty benefit
• individuals who need to file a tax return because of the time they have lived in the U.S., add a spouse or dependent on a U.S. tax return, or completing Form 8288-A or Form 8288-B withholding requirements related to the sale of U.S. property

 

What’s the Difference Between an ITIN and a Social Security Number?

An ITIN provides a unique number to those who do not have or are not eligible for a Social Security Number. The IRS issues ITINs to individuals and foreign nationals whose income must be reported on a U.S. tax return but don’t qualify for a SSN (SSNs are issued by the Social Security Administration). An ITIN does not provide eligibility to work in the United States; however, it may make you eligible for certain benefits.

 

Three steps to applying for an ITIN from Canada

STEP 1: Complete a Form W-7, Application for IRS Individual Taxpayer Identification Number

When completing a Form W-7, it is best to work with a trained professional. Errors on an ITIN application may result in the rejection of the application and delays in securing a number.

STEP 2: Obtain proof of identity and foreign status

Proof of identity may be obtained from:

• A passport
• A national ID card that includes a photo, name, current address, date of birth and an expiration date
• A U.S. driver’s license
• A U.S. state identification card
• A foreign voter’s registration card
• A foreign military identification card
• A visa
• U.S. Citizenship and Immigration Services (USCIS) photo identification
• Medical records (appropriate only for dependents under 6)
• School records (appropriate only for dependents under 14, or under 18 is a student)

Keep in mind a passport is the only document considered to be acceptable proof of both identity and foreign status.

STEP 3: Submit the application to the IRS

When mailing an ITIN application, the use of a private delivery service is recommended. All documents should be submitted to the IRS here:

Internal Revenue Service

ITIN Operation

Mail Stop 6090-AUSC

3651 S. Interregional, Hwy 35

Austin, TX 78741-0000

 

Why use a CAA for an ITIN application?

Our IRS Certifying Acceptance Agent (CAA) is available to assist with your ITIN application. Using an IRS CAA to complete your ITIN application saves you time. Our IRS CAA can assist with certifying original I.D. documents, thereby avoiding the need to submit them to the IRS. Submitting documents like a passport or driver’s license to the IRS could take significant time to be processed. Express service for ITIN applications is currently available. Your ITIN application includes follow-up communication with the IRS and a full refund possible if your ITIN application is rejected.

 

Some exceptions to submitting a tax return and substitute documents required

While an ITIN application is generally submitted with a U.S. tax return, there are some exceptions. Some of the exceptions are noted in the table below.

 

Circumstance	Substitute Documents
Individual partners of a U.S. foreign partnership that invests in the U.S. and own assets that generate income subject to IRS information reporting or withholding requirements	Copy of partnership or LLC agreement with partnership’s EIN and indicating the applicant is a partner in the partnership
Individuals with an interest-bearing bank deposit account that generates income effectively connected with a U.S. trade or business and is subject to IRS information reporting or withholding requirements	Signed letter from the bank on their official letterhead displaying your name and noting that you have opened a business account subject to IRS information reporting or withholding requirements on the interest generated for the current taxation year
Individuals receiving current year distributions of pensions, rental income, royalty income, annuity income and are required to provide an ITIN to the financial institution or insurance company	Signed letter or documents from withholding agent on official letterhead showing individual’s name and evidence an ITIN is required to make current year distributions to the individual which are subject to IRS information reporting or withholding requirements. Self-generated statements may be accepted but only with a copy of the contract or a letter with a post-marked envelope addressed from the withholding agent.
Individuals with wages, compensation, salary, and honoraria payments eligible to claim treaty benefits, are exempt from tax or subject to reduces withholding and who will be submitting a Form 8233 to the payer of the income	·         A letter of employment from the payer of the income ·         A copy of the employment contract ·         A letter requesting your presence for a speaking engagement   And   ·         Evidence on Form W-7/W-7(SP) that the individual is entitled to claim the benefits of a tax treaty; and ·         A copy of the completed Form 8233 with the information of both the applicant and the withholding agent
Individuals receiving scholarships, fellowships, and grants and claiming benefits of a treaty and will be submitting a Form W-8BEN to the withholding agent	·         An original letter or notification from the education institution; or ·         A copy of the contract with the University, College or other educational institution   And   ·         An original or certified copy of a passport from the issuing agency showing a valid visa issued by the U.S. Department of State; and ·         Evidence displayed on the Form W-7(SP) application that the individual is entitled to claim the benefits of a tax treaty; and ·         A copy of the Form W-8BEN submitted to the withholding agent and attached to Form W-7/W-7(SP); and ·         A letter from the Social Security Administration that the individual is ineligible to receive a Social Security Number Students on a F-1, J-1, or M-1 visa who will not be working while studying in the U.S. will be permitted to provide a letter from the designated school official or the responsible officer.
Individuals subject to third-party reporting of Mortgage Interest	Evidence of a home mortgage loan, a copy of the contract of sale, or similar documentation showing evidence of a home mortgage loan on real property located in the United States
Disposition by a foreign person of U.S. real property interest	·         A completed Form 8288, Form 8288-A or Form 8288-B; and ·         A copy of the real estate sales contract or settlement statement (HUD-1)

 

 

Be sure to contact us so that we can be in touch with you and then you may GET STARTED.

Get started working with us on your U.S. ITIN application by clicking here. or checkout our ITIN Center for further information.

 

 

 

Need Help from an IRS Certifying Acceptance Agent in Oakville, or Toronto Ontario?

Contact Cross-Border Financial Professional Corporation – When Perspectives Matter! Karlene J. Mulraine, EA, CPA, CA, CPA (NH) is the President of Cross-Border Financial Professional Corporation. Follow us on Linkedin and Twitter, or hang out on Facebook.

 

 

 

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