If you’re new to the tax system in the United States, you might have heard of Individual Taxpayer Identification Numbers (ITINs) and Social Security Numbers (SSNs). While both of these numbers are used for tax purposes, they are not the same. Here, highlighted with be the key differences between ITINs and SSNs, the purposes for which they are issued, and the significance of each number. The tax system in the United States is complex, with numerous identification numbers and requirements that taxpayers must fulfill. Two of these identification numbers are ITINs and SSNs, and it’s essential to understand their differences to ensure that you meet your tax obligations and protect your personal information.
ITIN vs SSN: Understanding the Differences
Here are the key differences between ITINs and SSNs:
Purpose of Issuance
ITINs are specifically designed for tax purposes, they are issued by the Internal Revenue Service (IRS) to individuals who are not eligible for an SSN but still need to file a tax return and fulfill other tax obligations. Nonresident aliens who receive income from U.S. sources and are required to file a tax return may need an ITIN. SSNs are issued by the Social Security Administration (SSA) to individuals who are authorized to work in the United States. They are used not only for tax purposes but also for other purposes, such as employment eligibility verification, access to government services, and benefits eligibility. Nonresident aliens who are not eligible for an SSN can apply for an ITIN to fulfill their tax obligations.
TINs are issued regardless of immigration status, this includes nonresident aliens, foreign students, and dependents who do not meet the requirements for an SSN. SSNs are only issued to individuals who are authorized to work in the United States. This means that even if you are not authorized to work, you may still need an ITIN to file a tax return and claim certain tax benefits.
Another significant difference is the usage of these numbers. ITINs are used exclusively for tax purposes, while SSNs are used for a variety of purposes, including employment and benefits eligibility, credit reporting, and other financial transactions. However, some financial institutions may accept an ITIN in place of an SSN for certain transactions, such as opening a bank account or applying for a loan.
It’s worth noting that ITINs may expire if they have not been used on a tax return for three consecutive years. If your ITIN has expired, you’ll need to renew it to continue using it for tax purposes. In contrast, SSNs do not expire, and you can use them for the rest of your life.
Applying for an ITIN or SSN
When it comes to applying for an ITIN or an SSN, the process is different. To apply for an ITIN, you can CONTACT A CERTIFYING ACCEPTANCE AGENT. You’ll need to provide supporting documentation, such as a valid passport, to prove your identity and foreign status.
To apply for an SSN, you must visit a Social Security Administration (SSA) office and provide evidence of your identity, age, and citizenship or immigration status. This evidence can include a birth certificate, passport, or immigration documents.
What is the difference between a taxpayer identification number and a Social Security number?
A taxpayer identification number (TIN) is a unique identifier used by the IRS to track tax returns and payments. There are several types of TINs, including ITINs, Employer Identification Numbers (EINs), and Preparer Tax Identification Numbers (PTINs). A Social Security number (SSN) is also a unique identifier, but it is issued by the Social Security Administration and used for a wide range of purposes, including employment and benefits eligibility.
Can I use an ITIN to apply for a credit card or a loan?
Some financial institutions may accept an ITIN in place of an SSN for certain transactions, but this varies from institution to institution. It’s best to check with the institution directly to determine if they accept ITINs.
What should I do if my ITIN has expired?
If your ITIN has expired, you’ll need to renew it to continue using it for tax purposes.