If you want to work in the US, it is a mandatory requirement to pay taxes accordingly. And for that, you need to have a Social Security Number (SSN). If you cannot qualify for an SSN, an Individual Taxpayer Identity Number (ITIN) is required to get through the processes without a hassle.
If you’re unsure what an ITIN is and why it is essential for those who wish to work legally inside the US, this blog post guides you in detail about everything you need to know about the ITIN.
What Is an Individual Taxpayer Identity Number (ITIN)?
ITIN, Individual Taxpayer Identity Number, is a unique identifier issued to individuals from outside the US who have operations inside the region and are supposed to pay taxes and claim for tax returns. The number is issued by the Internal Revenue Service (IRS), a government-based tax collection agency in the US. The first digit of your ITIN is usually a 9, while the fourth digit is either a seven or an 8. Having an ITIN ensures that you’re following all IRS requirements. The IRS can process your tax information more efficiently, including your tax return and payments.
What Is the Purpose of ITIN?
The Internal Revenue Service (IRS) issues ITINs to foreign nationals so that they may file tax returns and make payments without needing a Social Security number. Since resident and non-resident foreigners are obliged to file or report in the United States under the Internal Revenue Code, they are issued without regard to immigration status. ITINs are useless for anything other than submitting federal taxes.
An ITIN cannot –
- Provide permission to work in the USA.
- Let people access their Social Security benefits.
- Check a dependent’s EITC eligibility to see whether any tax relief will be available.
What Makes an ITIN Significant?
There are several reasons which make ITIN Numbers a significant requirement; a few prominent among them can be listed as follows –
Helps Submitting Your Taxes Online –
More than ever, filing your taxes electronically is the quickest and safest method to file a return, get a refund, or pay your tax payment on time. Most taxpayers who do not have an ITIN are barred from filing online, resulting in needless and lengthy delays in many circumstances.
Enables You to Claim Certain Tax Credits –
Many ITIN taxpayers have children with social security numbers qualified for the Child Tax Credit. Still, they must wait long during the epidemic to get this much-needed money for their children. While Congress has sponsored legislation acknowledging the importance of parents receiving these payments on schedule, there are still delays.
The same is true for taxpayers with a social security number who must file jointly with a spouse who needs an ITIN. They will also have to wait longer for a stimulus pay-out if they did not initially get Economic Impact Payments. They must also claim the Recovery Rebate Credit on their paper returns.
Qualifies You for the PPP Funds –
Non-U.S. citizens now have additional access to Payroll Protection Program (PPP) funds that they could not previously qualify for. The proposed modifications would enable US citizens to petition for PPP relief using their Taxpayer Identification Numbers (ITINs), as well as Green Card holders and persons in the US on a Visa.
Get Your ITIN Number Hassle-Free with Active Filer –
If you need an ITIN number, we can assist you in navigating the application procedure. Contact Active Filer for assistance in navigating tax season and beyond. We are experts in business accounting, individual tax services, tax preparation, international tax services, tax planning, and tax resolution. Connect with one of our representatives now to see how we can meet your accounting requirements.