Discussion Points for Punto Legal- April 6, 2016
Individual Tax Identification Numbers (ITINs). An ITIN is a tax processing number issued by the Internal Revenue Service (IRS) to ensure that people — including unauthorized immigrants — pay taxes even if they do not have a social security number. ITINs allow the IRS to bring in billions of dollars the federal government otherwise would have no way of collecting.
The ITIN program was created by the IRS in 1996 so that foreign nationals and other individuals who are not eligible for a social security number can pay the taxes they are legally required to pay. ITINs are not social security numbers. The ITIN is a nine-digit number that always begins with the number 9. You can tell that a nine-digit number is an ITIN if it starts with a 9 and has a 7 or 8 in the fourth digit.
Many immigrants have ITINs. People who do not have a lawful status in the United States may obtain an ITIN.
ITINs do NOT provide legal status or work authorization. An ITIN does not provide legal immigration status and cannot be used to prove legal presence in the United States. An ITIN does not provide work authorization and cannot be used to prove work authorization on an I-9 form.
Although illegal immigrants paid $11.8 billion in state and local taxes in 2012, an ITIN holder is not eligible for social security benefits or the Earned Income Tax Credit (EITC).
However, if that person becomes eligible for Social Security in the future (for example, by becoming a lawful permanent resident), the earnings reported with an ITIN may be counted toward the amount he or she is eligible to receive.
What good is an ITIN? With an ITIN, You can:
A) Open a bank account. Individuals who do not have a social security number but do have an ITIN can open interest-bearing accounts at banks.
B) Obtain a Colorado driver’s license. Colorado requires an ITIN to receive a driver’s license, driver’s permit, or state identification card.
C) At some point in the future an immigrant may need to prove how long he or she has been in the United States and having a tax return filed using an ITIN is one way to show that.
The ITIN is not an immigration-enforcement tool. The application process is designed to get tax money, and the IRS does not share applicants’ private information with immigration enforcement agencies. The law, namely the Internal Revenue Code, states that the IRS is not authorized to release taxpayer information to other government agencies.
How does one apply for an ITIN? Applicants must fill out a W-7 application form and submit it to the IRS along with a completed tax return. Individuals do not need to apply in person, but you do have to prove your identity and foreign status.