Some Immigrant Workers Need an ITIN to File a Tax Return and to Claim the Child Tax Credit (CTC)
What is an Individual Taxpayer Identification Number?
An Individual Taxpayer Identification Number (ITIN) is issued by the IRS to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security number (SSN) issued by the Social Security Administration (SSA). Such individuals include immigrants in the U.S. who are not yet able to obtain a valid SSN, as well as nonresident aliens who are listed on a U.S. tax return. For example, immigrants in the U.S. who have applied to the U.S. government to obtain legal status to work or reside in the U.S. would need an ITIN to file a tax return while waiting for a decision. The U.S. considers filing tax returns an indication that an immigrant applying for legal status is seeking to comply with his or her tax responsibilities.
What is the purpose of an ITIN? Can it be used to help some workers claim the CTC?
The ITIN is used in place of an SSN on a tax return to identify a taxpayer who has no SSN, or to identify a spouse or dependent without an SSN who is listed on the tax return. ITINs may be obtained by immigrant workers to file tax returns and to claim a person as a dependent who has no SSN, such as dependents living in Mexico or Canada. Eligibility rules for the CTC require that the taxpayer and the qualifying child claimed for the CTC have either an SSN or an ITIN. The qualifying child claimed for the CTC must also be either a U.S. citizen or a resident alien living in the U.S. (children living in Mexico or Canada may not be claimed for the CTC even if they have an ITIN).
To file a tax return, taxpayers enter their ITIN in the space for the SSN on the tax return and on Schedule 8812 “Additional Child Tax Credit.” An increasing number of banks accept ITINs as identification to open bank accounts, which can speed the receipt of a worker’s tax refund by having it deposited directly in the account. In addition, establishing savings can help workers build assets.
An ITIN does not:
- entitle an individual to Social Security benefits;
- enable a taxpayer to claim the EIC or permit a child with an ITIN to be claimed for the EIC—a valid SSN and authorization to legally work in the U.S. are required for the EIC;
- cause any adjustment to the individual’s immigration status;
- mean that the individual is an undocumented worker;
- give the individual the right to work in the U.S. Any individual who is eligible to be legally employed in the U.S. must have an SSN. A worker with an ITIN should not provide it to an employer in place of an SSN, since this would indicate to the employer and to the Social Security Administration that the worker is not authorized to work.
How do taxpayers get an ITIN?
Individuals who wish to file a tax return but who cannot obtain a valid SSN must complete IRS
Form W-7, “Application for IRS Individual Taxpayer Identification Number.” The Form W-7 must be attached to the completed tax return for which the ITIN is needed. The tax return, Form W-7 and supporting documents verifying identity and foreign status must be submitted together to the IRS. Form W-7 describes which documents are acceptable. Parents or guardians may complete and sign a Form W-7 for a dependent under age 18 if the dependent is unable to do so, and must check the parent or guardian’s box in the signature area of the application. Other dependents and spouses must complete and sign their own Forms W-7.
The IRS has revised its procedures for issuing new Individual Taxpayer Identification Numbers (ITINs) beginning in 2013. Applicants can receive assistance completing the ITIN application process through:
(1) select IRS Taxpayer Assistance Centers where staff can help individuals prepare W-7 forms, determine which documents are acceptable, and verify the validity of identification documents or
(2) an Acceptance Agent authorized by the IRS who may examine identification documents, certify that they are valid, and send the application to the IRS. (For dependents applying for an ITIN, the Agent must send to the IRS the original documents or copies certified by the original issuing agency.)
Upon approving the application for the ITIN, the IRS will process the tax return and send a letter to the taxpayer, or the Certified Agent, containing the ITIN number(s) for use on subsequent tax returns.
Individuals may also apply by mail to the IRS. Form W-7’s must include original documentation or copies of these documents certified by the issuing agency. Photocopies and notarized copies of documentation will not be accepted. The Form W-7 and the required supporting documentation must be mailed with the tax return to the IRS Service Center in Austin, Texas (the address is in the Instructions for Form W-7 and is different from the address to mail tax returns only for processing). This office can be reached at (800) 829-1040. There is risk of delay in IRS returning the supplied documentation, or it being lost, so applying through an IRS Taxpayer Assistance Center or with the help of a Certified Agent is recommended.
The Form W-7 and the separate instructions may be obtained free by calling the IRS at 1-800-TAX-FORM or at the IRS website: www.irs.gov/formspubs.
What are Acceptance Agents?
Acceptance Agents are authorized by the IRS to assist applicants in completing applications for ITINs.
However, some Acceptance Agents do not prepare tax returns. In that case, the completed Form W-7 certified by the Agent may be taken to a VITA site or commercial tax preparer and submitted with the tax return. Acceptance Agents may be found at colleges, financial institutions, accounting firms, nonprofit agencies and some Low Income Taxpayer Clinics. Commercial tax preparers who are Acceptance Agents often charge a fee that can range from $35 to $150 for completing the Form W-7. (If an individual applies for an ITIN directly with the IRS, there is no fee.)
Visit Acceptance Agent Program on the IRS website for a list of Acceptance Agents by state that is updated quarterly. Low Income Taxpayer Clinics (LITCs) may also be able to help identify local Acceptance Agents.
To become an Acceptance Agent, an organization must:
- Complete an Acceptance Agent training
- Submit the Application IRS Form 13551, IRS Application to Participate in the IRS Acceptance Agent Program during open season May 1-August 31 of each year (this applies to both new and renewing applicants)
- Attach the certification form for each authorized representative
- Complete forensic training and submit certificate of completion
For more information on becoming an Acceptance Agent, see Domestic and/or International Tax Professional – How to Become an Acceptance Agent for IRS ITIN Numbers.
For questions, contact:
ITIN Policy Section
Telephone: (404) 338-8963
Fax: (404) 338-8793
For more information on ITINs, you may also obtain IRS Publication 1915, “Understanding Your IRS Individual Taxpayer Identification Number” at www.irs.gov/formspubs. Information on the new rules is at: www.irs.gov/Individuals/General-ITIN-Information.