Understanding the Right Time to Apply for an ITIN
An Individual Taxpayer Identification Number (ITIN) is essential for people who are non-residents and individuals who aren’t eligible for a Social Security Number but need to fulfil U.S. tax obligations. Knowing when to apply for an ITIN is key to avoiding delays, penalties, and missed tax benefits.
SSN vs ITIN: What’s the Difference?
- An SSN (Social Security Number) is a taxpayer ID assigned to U.S. citizens, permanent residents, and certain eligible noncitizens. It allows you to work, receive Social Security benefits, and file taxes.
- An ITIN (Individual Taxpayer Identification Number) is for individuals who are required to file U.S. taxes but are not eligible for an SSN. It’s used only for tax reporting and doesn’t confer work authorization or eligibility for Social Security benefits.
What Happens to Your ITIN After You Get an SSN?
- Once you receive an SSN, you should stop using the ITIN immediately.
- The IRS recommends you notify them (by mail or other method) that you now have an SSN, so records can be updated and future filings correctly reflect your SSN.
- Your ITIN will become void, and all prior tax records under that ITIN should move over to your SSN.
- Using both your ITIN and SSN in filings can create duplicate records and confusion, so transitioning solely to your SSN avoids issues.
Why Updating Your Records Matters
Consolidating your tax history under one number is crucial for accuracy and compliance. Once your ITIN is deactivated, all future tax returns, credits, and correspondence should use your SSN. This change also simplifies communication with employers, financial institutions, and the IRS — ensuring your tax identity is fully recognized under one valid number.
Important Note: If an individual born in the United States has the United States as their country of birth on their passport or birth certificate, they must apply for an SSN, even if they are not residing in the United States. From our experience, if these individuals apply for an ITIN and enclose a foreign passport copy with the United States as the place of birth, their ITIN Form W-7 application will be rejected.
Conclusion:
Applying for an ITIN at the right time ensures compliance with U.S. tax laws, helps you claim eligible credits, and avoids unnecessary penalties. Whether filing your tax return, meeting an exception, or requesting an extension, understanding the timing and process is essential for a successful application.
Our team specialises in ITIN applications, extensions, and tax compliance. Contact us for expert assistance to ensure your ITIN application is handled efficiently and accurately.
Please visit our website for the FAQ related to ITIN and US Tax Assistance.
