INDIVIDUAL TAX IDENTIFICATION NUMBER (ITIN or TIN) HOW TO FILE TAXES IF YOU ARE AN IMMIGRANT AND DO NOT HAVE A SOCIAL SECURITY NUMBER. WHAT IS AN TIN? An Individual Taxpayer Identification Number (ITIN or a TIN) is a tax processing number issued by the U.S. Internal Revenue Service (IRS). A TIN consists of nine digits, beginning with the number nine (i.e., 9XX-XX-XXXX). Since 1996, the IRS has issued ITINs to taxpayers and their dependents who are not eligible to obtain a Social Security number (SSN). WHY DOES THE IRS ISSUE TINS? All wage earners—regardless of their immigration status—are required to pay federal taxes. The IRS provides TINs to people who are ineligible for an SSN so that they can comply with tax laws. WHO USES A TIN? Taxpayers who file their tax return with a TIN include undocumented immigrants and their dependents as well as some people who are lawfully present in the U.S., such as certain survivors of domestic violence, Cuban and Haitian entrants, student visa–holders, and certain spouses and children of individuals with employment visas. As of January 2021, the IRS reported that there were 5.4 million active TINS Once a person who has been issued a TIN is eligible to apply for an SSN, the person may no longer use the TIN. WHAT IS A TIN USED FOR? TINs are issued by the IRS specifically as a means to pay federal taxes. While the IRS issues them solely for this purpose, TINs may sometimes be accepted for other purposes, such as for opening an interest-bearing bank account, in employment dispute settlements, or for obtaining a mortgage. WHY DO UNDOCUMENTED IMMIGRANTS NEED A TIN? In addition to being required to pay taxes, immigrants benefit from filing income tax returns because: It demonstrates that they are complying with federal tax laws. Filing federal taxes is a way for immigrants to further contribute to the economy. It is one way that people who may have an opportunity to legalize their immigration status and become U.S. citizens can prove that they have “good moral character.” Immigrants can use tax returns to document their work history and physical presence in the U.S. In order to be eligible for legal immigration status under any future immigration reform, people who currently are unauthorized to be in the U.S. most likely will have to be able to prove that they have been employed and have lived continuously in the U.S. for a certain number of years. People who file tax returns can claim crucial economic supports, such as the Child Tax Credit, including the refundable portion (also known as the Additional Child Tax Credit). Filing a tax return is required in order to be able to claim insurance-premium tax credits for family members—often U.S. citizen children—who are eligible for health care coverage under the Affordable Care Act (ACA, or “Obamacare”). These tax credits are necessary to help make health insurance affordable to people who otherwise would not be able to buy it. Individuals who are eligible to file their taxes with a TIN can establish that they are eligible for an exemption from the ACA’s individual mandate, which requires that people have health insurance. Undocumented immigrants are excluded from all ACA benefits, so they are not eligible to buy health insurance through the ACA’s health care marketplace, even at full cost. Immigrant workers who receive settlement payments as a result of an employment-related dispute will be subject to the maximum tax withholding rate, unless they have a TIN. For example, for a worker with a TIN, the withholding on back wages paid to the worker because of a settlement will be based on the worker’s family status and the number of exemptions the worker can claim. By contrast, if the worker did not have a TIN, the withholding would be figured as if the worker were single with no exemptions. Similarly, for workers without TINs, the withholding on payments other than wages, e.g., on payments for punitive damages, is figured at the “backup withholding” rate of 28 percent, whereas workers who have TINs ordinarily would have no withholding on such non-wage payments. DO TIN-FILERS PAY TAXES? Yes. That is the whole point. IS IT SAFE TO USE A TIN? Generally, yes. The IRS has strong privacy protections in place to ensure that immigrants who report their income and file their taxes are not at risk of having their information shared. Under Internal Revenue Code section 6103, the IRS is generally prohibited from disclosing taxpayer information, including to other federal agencies. However, certain exceptions apply. For example, the IRS is required to disclose taxpayer information to certain U.S. Treasury Department employees when they request it for tax administration purposes or to other federal agencies if it’s needed for a nontax criminal investigation and a federal court has ordered that it be provided. WHAT DOCUMENTS DO I NEED TO APPLY FOR A TIN? The form used to apply for an ITIN is the W-7: https://www.irs.gov/pub/irs-pdf/fw7.pdfInstructions from the IRS to complete the W-7 form can be found here:https://www.irs.gov/instructions/iw7 You must include original documentation or certified copies from the issuing agency to proveidentity and foreign status. (A notary cannot make certified copies for you.) Passport U.S. driver’s licenseForeign driver’s licenseU.S. state identificationcardU.S. militaryidentification cardU.S. Citizenship and Immigration Services(USCIS) photo identificationVisa issued by the U.S Department of StateForeign military identification cardNational identification card (must show photo, name, current address, date of birth, and expiration date)Foreign voter’s registration cardCivil birth certificate (required for dependents under 18 years of age)Medical records (dependents only – under 6)School records (dependents only – under 14, under 18 if a student)In the case of dependents, applicants will be required to submit additional documentation(along with the passport) like: If under 6 years of age: A U.S. medical record, U.S. school record, or U.S. stateidentification card that lists the applicant’s name and U.S. address, or a U.S. visa. TIN applicants are required to provide proof of their identity, foreign nationality status, and residency. (Proof must be submitted that any applicant claimed … Read more
