FAQs- ITIN in USA for Non-Resident Foreign Nationals doing Business in the US

1. What is ITIN - Individual Taxpayer Identification Number?

ITIN is an ID number used by non-U.S. resident foreign nationals or aliens who need to file tax returns in the US. So, if you need to file an individual tax return in the US and cannot get a US Social Security Number, you will need to get an ITIN.

Your ITIN will allow you to get a refund of income tax, file taxes, and claim tax benefits and it may allow you to open a bank account or apply for a loan. It is a 9-digit number, beginning with "9".

Having an ITIN does NOT mean that you can work. It is only for the Tax system and nothing else.

People cannot have both SSN and ITIN.

Remember that ITIN is for individuals whereas EIN is for businesses.

2. Can I get US ITIN?

If you are a foreign national who needs to file taxes in the US system then you can get an ITIN.

Somebody who is a US citizen or is on a Green Card cannot get an ITIN number, because they do not qualify for ITIN. For example, if you live in India and have income from the US, then you need to pay taxes in the US and, so, if you do not have SSN, then you need ITIN. 

Certain eCommerce portals allow foreign manufacturers to sell on it ask the foreign company owners to get ITIN.

3. What is the process for applying for an ITIN?

Obtaining an ITIN number requires filing Form W7 with the personal tax return. Copies of identification documents, including passports, are required to fill ITIN application form.

It can be done in two ways

a). You can either go to an ITIN Agent who is authorized by the IRS to accept the documents, they can verify the original document, and then they can submit it. 

List of the IRS Agents in your Area: Acceptance Agent Program | Internal Revenue Service

Or 

b). If you are trying to get ITIN by yourself then you must submit your identification documents (original), typically including the copies on the Personal Tax return, and you must submit the original documents to get your ITIN unless you are going through an ITIN agent. 

Documents required:

You will need a signed copy of the original Form W7 along with a copy of a personal tax return and identifying documents typically including a passport.

If you go through an ITIN agent the benefit is that you don't have to submit your original passport, however, the ITIN agent must see the original documents before accepting the copies from you. 

4. When should I file for ITIN?

As soon you are ready to file the annual federal tax returns for your business, you can apply for your ITIN. This is because you would be required to attach the return to your ITIN application.

It is possible to apply for your ITIN during any time of the year but to avoid interest and penalties, you should try to apply during the filing of the tax return's due date.

As a business, you should file your current year's tax return by the March 15 deadline.

5. In what ways can I apply for ITIN?

Though you can apply for ITIN in person or by mail but since are a foreign resident who has formed the company in the US for business, it is better than you apply through a CPA.

6. How long does it take to get ITIN?

Getting an ITIN number takes two to three months. And it must be filed along with your tax returns. 

Unlike the case of SSN in which a card is issued, for ITIN and authorization of letter from IRS is sent.

In case you have not received any letter from the IRS in the period you should get your ITIN, we suggest that you check with your CPA who has filed your ITIN, or call the IRS to check the status of your application. The IRS number to call at is 1-800-829-1040.

7. Does ITIN expire and when to renew it?

So depending on the situation, an ITIN can be issued for a year or it can be issued perpetually.

For example, if you are a singer/artist, earning income by singing and filing taxes for only one year, you may qualify for an ITIN.

8. Example of getting ITIN

Once again, ITIN (Individual Tax Identification Number) can only be issued to individuals, not to businesses.

So, let's say ABCD Inc is a foreign company doing business in the US. ABCD being a business will get a federal tax id 'EIN' number, the owner of ABCD Inc will get the ITIN.

Now the Tax in the US system is filed on a Calendar year basis and along with the tax filing, ABCD Inc. can request issuing an ITIN. All the taxes are filed in the first quarter around Feb and March. Once ABCD Inc. files the taxes, it can take as long as 3 months before ABCD Inc. will get the ITIN.

9. Do I need ITIN if I register to sell my products from India on eCommerce portals here in the US?

We need ITIN only for eBay & PayPal. We can do business without ITIN on Amazon, Etsy, Walmart, Wayfair.

Important pointers:

1. See www.irs.gov/ITIN for more information.
2. Keep copies of ITIN or scan them on your computer. This is sensitive information and you shall protect it. 

About Author

Ajay Kumar is CEO of Sai CPA Services and partner at Entry USA LLC is based out of New Jersey, USA. Ajay did his B.S. in Computer Science from Delhi Institute of Technology (DIT) and MBA from Stern at NY University.