What is ITIN and how to apply for it?


The individual identification number(ITIN) is a tax-processing number issued by IRS to the resident or non-resident foreigners and their dependent to pay taxes who are ineligible for social security number(SSN). It is 9 digit number, same format as SSN(XXX-XX-XXXX) it begins with the digit “9”. 

It was created by IRS in July 1996 for foreigners who are not eligible for SSN to comply with U.S. laws, used to serve as an identification number for filing taxes. If you have an ITIN number then it allows you to get a refund of income tax, claim tax benefits, etc.

To obtain an ITIN number, the applicant must complete Form W-7 and application for an individual taxpayer identification number. And need to submit documents that support their resident status. You can mail documentation with a W-7 form, other than present it at the IRS walk-in office, or process your application with an acceptance agent which is authorized by IRS. Certain agencies like colleges, banks, etc often help the applicant to apply for ITIN.

Why do you need ITIN?

Here is some point you understand How ITIN is important for you.

  1. If you arrived in the USA on a visa it does not permit your spouse to work. With ITIN, you have certain benefits such as increase standard deduction, when you file your taxes as “married filed jointly”. 
  2. When you are in the US and your spouse is still in India, you also claim your spouse personal exemption in your tax return. But in this condition, your spouse certainly needs an ITIN.
  3. You come to the US with your children who are not eligible for SSN. And you want their personal exemption on your tax return and child tax credit you also need ITIN for them.
  4. When you are a non-resident of the US but you receive a certain payment on which tax is deducted at source, you would need ITIN to claim for refund.
  5. Also, You need  ITIN if you want to apply for a credit card in the US.

If you want to apply for ITIN you can contact usaindiacfo for easy your work.

US citizen rules in India :

If you have an Indian passport and are married to an Indian citizen at least for two years, or one of your parents, grandparents have been an Indian citizen, then you can qualify as a Non-Resident Indian(NRI), Overseas Citizen of India(OCI).NRI status can impact your social security benefits, affect your dual citizenship and taxes.

All US citizens and green card holders need to file their tax returns in the US on the bases of their global income, where they live in whether in the US or in another country. For tax reasons, you are considered as a US resident. When you live in India for more than 182 days in the financial year then you are treated as an Indian resident. Then you will be taxed as per the Indian income tax act, a resident of India must pay taxes in India on there its global income.

The Double Tax Avoidance Agreement(DTAA) does not, however, indicate that a person would only submit a return in the nation he is considered a resident. A US citizen or green card person living in India will have to declare global income in his US tax return as well as in the Indian tax return. DTAA only helps you to ensure the particular tax is not taxed twice.

If you are a US citizens living in India then you are taxed as per as Indian tax act and you file the global tax return to both countries.