Individual Taxpayer Identification Number (ITIN) for EA Exam

What is an ITIN?

A 9-digit number issued by the IRS for federal tax purposes for individuals ineligible for a Social Security Number (SSN).

• Purpose: Filing federal tax returns, claiming refunds, or allowable tax benefits.
• Limitations:
  • Does not qualify for Social Security benefits or Earned Income Tax Credit.
  • Does not authorize work or change immigration status.
  • Not valid as ID outside federal tax system.

Who Needs an ITIN?

Individuals with a federal tax purpose who are not eligible for an SSN.

Eligible Individuals

• Nonresident aliens filing a U.S. tax return or claiming a tax treaty benefit.
• Resident aliens (substantial presence test or green card) filing a U.S. tax return.
• Spouses or dependents of U.S. citizens/resident aliens or nonresident alien visa holders, if claimed for tax benefits or filing a return.
• Nonresident alien students, professors, or researchers filing a return or claiming an exception.

Ineligible Individuals

• U.S. citizens.
• Green card holders.
• Nonresident aliens with U.S. work visas (eligible for SSN).

Federal Tax Purpose

• Filing a required U.S. federal income tax return.
• Claiming a refund or allowable tax benefit.
• Reporting income (even if no tax owed).
• Providing a tax ID for other federal tax purposes.
• Note: Returns with all zero entries do not require an ITIN.

Allowable Tax Benefits

1. Spouse Filing Joint Return: Nonresident/resident alien without SSN can file jointly with U.S. citizen/resident alien spouse.
2. Head of Household:
   • Requires qualifying child or relative (e.g., parent) living with taxpayer for over half the year.
   • Tax return must check Head of Household and list dependent ITIN applicants.
3. Qualifying Surviving Spouse:
   • Requires qualifying child/stepchild living with taxpayer all year.
   • Tax return must check Qualifying Surviving Spouse and list dependent ITIN applicants.
4. American Opportunity Tax Credit (AOTC):
   • Up to $2,500 per student for education expenses.
   • Requires Form 8863 in ITIN application, listing dependent ITIN applicant.
5. Premium Tax Credit (PTC):
   • Assists with health plan premiums.
   • Requires Form 8962 in ITIN application, listing ITIN applicant.
6. Child and Dependent Care Credit:
   • For care expenses to enable work.
   • Requires Form 2441 in ITIN application, listing dependent ITIN applicant.
7. Credit for Other Dependents (ODC):
   • $500 non-refundable credit for dependents not eligible for Child Tax Credit.
   • Dependent must be resident alien or U.S. national.
   • Requires Schedule 8812, with "Credit for other dependents" box checked.

When to Apply

• Timing: By tax return due date (April 15) or with extension (Form 4868, write "ITIN TO BE REQUESTED").
• Extension: Extends filing to October 15; taxes owed due by April.
• Prior Year/Exception: Apply anytime for prior year returns or if meeting an exception.
• Credits: ITIN must be assigned by due date (with extensions) for Child Tax Credit, ODC, or AOTC.

Application and Renewal

• Apply: Submit Form W-7 with tax return and supporting documents (e.g., passport) by mail or in person.
• Processing: 7 weeks normally; 9-11 weeks during tax season (Jan 15–Apr 30) or overseas.
• Renewal: Required if ITIN expired and filing is needed.
• Post-Application:
  • Contact IRS if no status in processing timeframe or documents not returned in 60 days.
  • Notify IRS of address or name changes (with documentation).

If SSN Obtained

• Stop using ITIN; use SSN for taxes.
• Notify IRS to combine tax records under SSN (include name, address, ITIN, SSN card copy).
• Mail to: Internal Revenue Service, Austin, TX 73301-0057.
• Impact: Failure to notify may reduce refunds due to uncredited wages/taxes.

Key Forms and Publications

• Form W-7: ITIN application.
• Form 4868: Filing extension.
• Form 1040-ES/NR: Estimated tax payments.
• Form 8863: AOTC.
• Form 8962: PTC.
• Form 2441: Child and Dependent Care Credit.
• Schedule 8812: Child Tax Credit and ODC.
• Publications: 519 (Tax Guide for Aliens), 501 (Dependents), 970 (Education), 974 (PTC), 503 (Child Care), 1915 (ITIN).

Exam Tips

• Focus: Eligibility, tax benefits, forms, application process, SSN transition.
• Common Questions:
  • ITIN vs. SSN eligibility.
  • Tax credits (AOTC, PTC, ODC).
  • Filing status (HOH, joint, surviving spouse).
  • Application/renewal procedures.
• Tax Residency: Substantial presence test (183+ days) or green card; special rules for certain visa holders.