It was created for tax purposes. The ITIN program was created by the IRS in July 1996 so that foreign nationals and other individuals who are not eligible for a Social Security number (SSN) can pay the taxes they are legally required to pay.
ITINs are not SSNs. The ITIN is a nine-digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, for example 9XX-7X-XXXX.
Many immigrants have ITINs. People who do not have a lawful status in the United States may obtain an ITIN. In addition, the following people are lawfully in the country and must pay taxes but may not be eligible for a SSN and may obtain an ITIN:
- A non-resident foreign national who owns or invests in a U.S. business and receives taxable income from that U.S. business, but lives in another country.
- A foreign national student who qualifies as a resident of the United States (based on days present in the United States).
- A dependent or spouse of a U.S. citizen or lawful permanent resident.
- A dependent or spouse of a foreign national on a temporary visa.
ITIN holders pay taxes:
- ITINs let more people pay into the system, which builds the tax base. According to the IRS, in 2015, 4.35 million people paid over 13.7 billion in net taxes using an ITIN.
- ITIN holders are not eligible for all of the tax benefits and public benefits that U.S. citizens and other taxpayers can receive. For example, 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.
- Some ITIN holders are eligible for the Child Tax Credit (CTC). According to the new tax bill passed in December 2017, the CTC tax credit may be worth as much as $2,000 per qualifying child, depending upon the applicant’s income. Because ITIN holders are eligible for the CTC, over 4 million U.S. citizen children benefit from the tax credit, however if a child does not have a SSN they are no longer eligible for the tax credit.
Is the ITIN a way for the government to track unauthorized immigrants?
- The ITIN is not an immigration-enforcement tool. The application process is designed to facilitate tax payment, and the fact the IRS does not share applicants’ private information with immigration enforcement agencies is key to tax compliance.
- Taxpayer privacy is an important cornerstone of the U.S. tax system. Because applicants provide the IRS with a great amount of personal information, privacy is highly critical to the success of the program. Section 6103 of the Internal Revenue Code states that the IRS is not authorized to release taxpayer information to other government agencies except for providing information to the Treasury Department for investigations that pertain to tax administration, or under a court order related to a non-tax criminal investigation. Expanding information-sharing beyond this would require a new law—an issue that arises often during legislative debates.
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