For quite some time now, rumors about immigration reform have been circulating. It offered to reward those immigrants in the United States who were undocumented and who had paid taxes, offering them residency. Here we will be commenting a little more in-depth on what this is about, how we can obtain it, what it is for, and many of the advantages it can offer us. We will also be telling you how we can help you to make this process less complete for you.
What is an ITIN?
Before we get to the advantages of having an ITIN, it is very important that we are clear about what this is, what an ITIN is, so that we are well informed when we want to apply for yours. So pay close attention to what we will encourage you to know below.
An ITIN is a tax identification number that can be obtained in the United States. The entity in charge of keeping track of this identification is the IRS, this is the agency to which U.S. citizens pay certain taxes established by the U.S. government. It is also used by those people who are migrants or foreigners in that country, but who are not eligible to have a Social Security Number.
As for the meaning of ITIN, in Spanish, it means “Individual Taxpayer Identification Number”, but with the order of the acronyms like this, due to the order of the words in English. In terms of its usefulness, the ITIN may serve to be able to pay taxes on our economic income obtained in the United States. And as for its other utility, it is used to identify the spouse or dependent children who do not have Social Security.
This is so that those who pay their taxes can claim an exception for their children or dependent child, as well as for their spouse. In other words, the ITIN basically consists of a certain amount of numbers that allow you to file your taxes.
This, as we had said at the beginning, is available only for those foreigners living in the United States, who are residents. And it is not available to those resident aliens who do not meet the agency’s requirements for a Social Security Number (SSN).
What are the advantages of having an ITIN?
Having an ITIN will allow us to perform a series of functions, being these mostly fiscal. It is very important to be aware of what it is useful to have an ITIN, in order to be able to use it correctly and adequately, to be able to take advantage of the benefits that the law establishes, and also to be able to pay our taxes in an ideal way.
In addition to this, having an ITIN, will allow us to access other financial benefits, the same benefits that will go according to the laws established by the state in which you are living. We know that understanding each one of these laws is a little complicated, since arriving in a country with a different language and even a different culture, often makes it difficult for us.
That is why, in this opportunity we are going to tell you about some of the benefits that you can obtain when you have your ITIN. Take note of each one of them, so that you are aware of most of its benefits.
- Opening a bank account: we know that in order to open a bank account in the United States, most foreigners do it with their passport. But for this, it is necessary that your passport is current or valid. If this is the case, but you have your ITIN, you will also be able to open a bank account.
- Get your driver’s license: in a large number of states in the U.S. we are allowed to have a driver’s license even if we are undocumented. This is possible if you have already filed your taxes, therefore, having an ITIN number will help us to prove this and thus be able to get our driver’s license without any inconvenience.
- Proving your residency: in many occasions, at the moment of making certain applications, we are asked to prove if we have lived in a specific state for a certain period of time. It is there where having an ITIN is very useful, since we will be able to verify this information. It is important to be clear that proof of residency is not the same as a green card.
- You will be able to opt for a credit card: as well as to open a bank account, we will also have the benefit of being able to apply for a credit card through our ITIN. This would be an option in case your passport is not valid, but if you have this document in order, you will also be able to opt for your credit card through it.
- You will be able to buy a property or house: although it is true that in order to be able to buy a house or property, it is much easier to have a social security number, we can also find certain lenders or banks that accept an ITIN. To learn more about this, you can contact us, and we will provide you with the necessary advice.
- Having health insurance: in order to purchase health insurance, several states require you to have social security. But there is another great majority, much wider, that allow you to buy your health insurance without having a social security. Having an ITIN will be of great help in proving your residency in the state where you are living. This is very important, since it is a requirement when you want to buy health insurance. In addition, you can use it as an identity document.
- Method to comply with tax laws: having an ITIN will allow workers who do not meet the necessary requirements to obtain a Social Security Number, the option to comply with U.S. tax laws.
- Indispensable document in the pandemic: another of the advantages that we will be able to obtain by having our ITIN, is that during the pandemic they will fulfill the function to be able to pay our taxes and also to receive from the government certain financial aids.
On the other hand, and going hand in hand with the last point, regarding the pandemic, is that the last economic package that the government delivered was $1,400, and it is directed to all those parents who have ITIN with children who are citizens. In addition to that, they are talking about the Tax Credit for each of the children, which will begin to be paid starting in July.
How do I know if I am eligible to obtain an ITIN?
When we want to obtain our ITIN, it is necessary that we take into account a series of requirements that we have to fulfill for this to be possible. Here we are going to show you in an orderly manner some of these requirements that you have to fulfill as a person to obtain your ITIN.
- First, you are eligible for an ITIN if you are a foreign national who has gained entry to the United States, but has not been eligible for an SSN.
- Any person who has been involved as a dependent child or spouse on the citizen’s tax return, whether a U.S. citizen or lawful permanent resident, will be able and required to apply for an ITIN if that person does not qualify or is not eligible for an SSN.
- If you are a person who has interest-bearing bank accounts, or you have received dividends on certain money that you have invested in securities, and you are not eligible for an SSN, you will also be able to apply for an ITIN.
- In case you are a person who has obtained compensation for a legal claim, such as discrimination, sexual harassment, wage claims or administrative claims. If this is your case, you may also apply for an ITIN so that you can meet certain potential tax requirements to report the amount of money you have earned.
- If you have been living in the U.S. permanently for 6 months or more and have not yet been eligible for a Social Security number, then you may be eligible for an ITIN.
- In case you are an entrepreneur or investor from a foreign country and you have invested a certain amount of money in the U.S. in a business, you may also apply for an ITIN.
- And finally, for those who are foreign nationals who do not reside in the U.S. and can apply for a tax benefit.
When applying for an ITIN, what are the documents to be submitted?
When we intend to apply for an ITIN, we will be asked to prove our identity as an applicant, and also our status as a foreigner. In order to do so, we will ask for a series of documents, which are listed below.
- Valid passport
- Identity card
- Original birth certificate in case you are under 18 years old,
- Driver’s license, either from the foreigner’s country of origin, or it can also be a U.S. driver’s license.
- Visa
- U.S. military card or foreign military card, you can also present your foreign driver’s license.
What is the importance of having an ITIN if I am an undocumented immigrant?
As undocumented immigrants in the United States, we are still required to pay taxes, and there are many benefits to filing income tax returns. Here are the many benefits that you can obtain as an undocumented immigrant by having an ITIN.
- By having an ITIN and paying your taxes, you will be demonstrating that you are in compliance with federal tax laws.
- By filing your federal taxes, it is an excellent way for immigrants to contribute to the economy.
- If you are looking to legalize your immigration status to become a U.S. citizen, then having an ITIN and complying as a taxpayer is one way to do so. You will be demonstrating that you are a person of good moral character.
- By having tax returns, you will be able to use them to document your work history, as well as your stay or that you are living in the country, in case you are seeking to regularize your immigration status.
- Paying taxes will help us as foreigners to prove that we have been employed and that we have been living continuously in the United States. Whether it is for a specific period of months or years.
- If you are a person who has continuously filed your taxes, then you will be able to claim crucial economic supports, an example of which is the Child Tax Credit that we mentioned earlier.
- In order to claim insurance premium tax credits for family members, it is essential to file tax returns. Citizen children who meet the criteria for health care coverage. Each of these tax credits will be necessary to make health insurance much more affordable for those who may not be able to afford it for certain reasons.
How can I apply for an ITIN?
To apply for an ITIN is simple, we will only have to do it through the W-7 form that belongs to the IRS. This form is the IRS application form to apply for an ITIN. This form must be submitted together with the federal tax return.
- By the following methods you will be able to apply for your ITIN:
- Through the mail addressed to IRS offices, you must send Form W-7 and also the tax return. Proof of identity and documents regarding your foreign status.
- Through the service of a Certified Filing Agent, which must be approved by the IRS.
- With an appointment at a taxpayer assistance center which must be assigned by the IRS.
