As an employer you might be dealing with an employee or a contractor who is not a citizen or permanent resident of United States. If an individual is required to file a federal tax report with the Inland Revenue Service and does not have a Social Security number, this individual need an ITIN. An ITIN is a number given to qualifying individuals who cannot get a Social Security number. The ITIN is used on the tax forms.
If you are an employer, you are required to fill out the Form W-2 particulars such as your Social Security number. Instead of a Social Security number, an independent contractor might have an ITIN. This ITIN does not make an individual eligible for Social Security benefits or the Earned Income Tax Credit. It also does not authorize an individual to work in the United States and is not a substitute for a Social Security number.
An ITIN is a nine digit number issued by the Inland Revenue Service. The first number always starts with a “9” and it comes in the following format e.g. xxx-xx-xxxx. Employees without a Social Security number are still required to file their individual income tax return to report their wages. The employee must include their ITIN on their income tax return form.
To apply for an ITIN, the individual must file the IRS FORM W-7, Application for Individual Taxpayer Identification Number. If an individual has a pending Social Security Number application, then he or she should not fill out an ITIN application.
An individual can either apply for a new ITIN or for an ITIN renewal with the IRS Form W-7 and must attach a valid federal income tax return along with identity and foreign status documents. The identity documents must be original or copies that are certified by an issuing agency. The ITIN application can be sent via mail to the Inland Revenue Service or through an IRS Authorized Acceptance Agent or by visiting an IRS Taxpayer Assistance Centre.
Application for the ITIN should be sent when the individual is ready to file his or her federal income tax return to avoid paying penalty for late submission of tax return. The application of ITIN usually takes within seven weeks for approval.
The IRS will normally issue a notice to an individual to inform of their upcoming ITIN expiration. If an individual has received a new Social Security number, this individual need not have to renew his or her ITIN. If an individual needs legal assistance, he or she should contact an attorney or law firm licensed in his or her jurisdiction.