In order to file an US expat tax return in the US, an individual is required to input either a Social Security number (SSN) or an individual tax identification number (ITIN). The ITIN is only available for those individuals who are not eligible for a Social Security number, and it is only good for tax purposes. But since an expat tax return is quite a big deal in the US, it’s important to obtain an ITIN if you are unable to get a SSN.
What Can I Use an ITIN For?
The ITIN provides no legal status in the United States–it was created by the IRS primarily to help foreigners who were ineligible for the SSN comply with their tax filing requirements. However, certain banks will allow individuals to use an ITIN to open accounts, and certain states allow an ITIN to be used to obtain a drivers license. As a foreigner, generally the only way to be eligible for a SSN would be when authorized to work within the United States.
However, there are other foreigners in the United States that may have a tax-filing obligation. For instance, the following immigrant categories may require a tax filing:
- Students: To report scholarship and grant receipts
- Dependents: Resident US foreigners whom a taxpayer wishes to claim as a dependent
- Consultant/contractor: those working for a foreign company in the United States (US-sourced wages)
It is important to apply for an ITIN if one is required, as individuals should stay current with their tax-filing obligation. Apart from that, the IRS may deny refunds due or recalculate tax without the foreign dependent if the ITIN is not provided for.
How Do I Apply For an ITIN?
To apply for the ITIN, an individual should complete the Form W-7 Application for IRS Individual Taxpayer Identification Number found on the IRS website. This completed form should be attached to a completed US individual tax return and sent to the W-7 center, along with the necessary supporting documentation. It is important to note that the supporting documentation that is submitted needs to be either original or certified by the issuing agency–this makes the process a bit more complicated as a simple notary will no longer suffice. Military spouses and dependents, as well as certain nonresident aliens, are not held to the new regulations. For those that do not meet the exceptions but are required to submit original documentation and are currently abroad may also go to the IRS stations in the US Embassies in Paris, Beijing, Frankfurt, or London.
Where Do I Send My Return and ITIN Application?
Individuals should not send the package to the address listed on the return, as the return is an attachment to the W-7 application, rather than the other way around. If individuals do not wish to mail the information in, they may find an IRS approved acceptance agent or go to an IRS Taxpayer Assistance Center (both of which may also be found on the IRS website). Individuals should expect to receive a letter with the ITIN after approximately six weeks. If nothing is received, individuals are advised to contact the IRS. An issued ITIN is generally valid for 5 years –after which an individual is required to repeat the application process.
As a return is required to be attached to the W-7 application, the timing of the application will be after the year-end that the return is required to be filed. The US filing deadline is April 15 for the prior tax year. Individuals should not disregard the actual filing deadline for the return, as should there be a balance due, the IRS may impose penalties and interest for the late filing.
Need More Information on US Expat Taxes as Foreigner Living in the US?
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