Articles

How to Get an ITIN as a Non-Resident Alien or Indian?

How to Get an ITIN as a Non-Resident Alien or Indian? And Its Benefits.

In an increasingly interconnected world, many individuals from India find themselves engaging in financial activities in the United States. However, navigating the U.S. tax system can be daunting, especially for those ineligible for a Social Security Number (SSN). The Internal Revenue Service (IRS) addresses this issue through the Individual Taxpayer Identification Number (ITIN).

 

This nine-digit number is crucial for non-resident aliens (NRAs) and other individuals who need to comply with U.S. tax laws but cannot obtain an SSN. This guide outlines the ITIN application process for Indians and highlights its benefits.

 What is an ITIN?  

The ITIN is a unique identification number issued by the IRS for tax purposes. It is available to individuals who are not eligible for an SSN but must file U.S. tax returns or meet other federal tax obligations. This includes:

  • Non-resident aliens.

  • Dependents or spouses of U.S. citizens or resident aliens.

  • Foreign students, scholars, and their dependents.

  • Individuals claiming treaty benefits under international agreements.

Why Indians Might Need an ITIN?

Indians residing in or conducting financial activities in the U.S. may require an ITIN for several reasons:

  1. Tax Compliance: To report income, claim refunds, or avail of treaty benefits.

  2. Banking Access: To open U.S. bank accounts.

  3. Credit Building: To apply for credit cards or loans.

  4. Business Operations: To fulfill tax obligations for entrepreneurial ventures.

  5. Rental Applications: To meet landlord requirements for taxpayer identification numbers.

  6. Tax-Advantaged Accounts: To contribute to retirement or savings accounts like an Individual Retirement Account (IRA).

 Steps for ITIN Application 

  1. Determine Eligibility 

Before applying, confirm that you meet the IRS requirements for an ITIN. Indians must prove their need for a taxpayer identification number, usually linked to tax filing obligations or financial activities in the U.S.

  2. Complete Form W-7 

The ITIN application begins with completing IRS Form W-7, “Application for IRS Individual Taxpayer Identification Number.” This form requires:

  • Personal information (name, date of birth, address).

  • Reason for ITIN request.

  • Supporting documents for identity verification.

 3. Gather Supporting Documents 

Indians must provide original or certified copies of documents to establish identity and foreign status. Acceptable documents include:

  • Passport (preferred): Serves as both identity and foreign status proof.

  • Alternate Documents: National ID card, birth certificate, visa, or U.S. driver’s license (if applicable).

 4. Submit the Application 

Applicants have several options for submitting their ITIN application:

  • Mail: Send Form W-7 and supporting documents to the IRS address provided in the instructions.

  • In-Person: Visit an IRS Taxpayer Assistance Center (TAC) for direct submission.

  • Authorized Acceptance Agents: Approach IRS-authorized agents in India or the U.S. who can review and forward your application.

 5. File a U.S. Tax Return (if applicable) 

In most cases, Form W-7 must accompany a completed U.S. tax return. Exceptions include:

  • Students claiming tax treaty benefits.

  • Individuals opening bank accounts or fulfilling financial obligations.

  • Dependents of U.S. residents or citizens.

 6. Track the Application 

The IRS typically processes ITIN applications within 7 weeks. If you do not receive your ITIN after this period, contact the IRS for an update.

 Benefits of Obtaining an ITIN 

  1. Facilitates Tax Compliance: Indians can meet U.S. tax filing requirements, claim treaty benefits, and request tax refunds.

  2. Enables Financial Transactions: An ITIN allows Indians to open U.S. bank accounts, apply for credit, and build a financial profile.

  3. Supports Business Activities: Entrepreneurs can fulfill tax obligations and engage in legitimate business transactions using an ITIN.

  4. Eases Rental and Housing Applications: Providing an ITIN during rental applications increases the likelihood of securing housing in the U.S.

  5. Access to Tax-Advantaged Accounts: Indians with an ITIN can contribute to IRAs, enhancing long-term financial planning.

  6. Strengthens Creditworthiness: By responsibly managing credit linked to their ITIN, Indians can establish a robust financial standing in the U.S.

 Common Challenges and Solutions 

  1. Delayed Processing: Ensure all forms and documents are complete and accurate to avoid delays.

  2. Rejection Due to Errors: Double-check the information on Form W-7 and accompanying documents before submission.

  3. Renewal Requirements: ITINs not used on a federal tax return for three consecutive years expire. Renew expired ITINs to maintain compliance.

 Conclusion 

For Indians engaging in financial activities or residing in the U.S., obtaining an ITIN is a crucial step. The ITIN application process ensures compliance with U.S. tax laws and provides access to essential financial and business opportunities. By following the steps outlined in this guide and understanding the benefits of an ITIN, Indians can confidently navigate the complexities of the U.S. financial landscape.

Suggested Read :

How to apply for ITIN from India?

Differences Between SSN & ITIN

Difference Between ITIN & EIN

ITIN Application and Identity Verification

Right ITIN Service Provider

Pallavi Dadhich

Pallavi is an ambitious English Literature student with a profound knowledge of content writing. Her SEO skills complement her content writing profile. She has a strong interest in expanding her set of skills by reading and learning. She is eager to experiment with creative writing styles while maintaining strong and informational content.

Leave a Comment

Recent Posts

Can we apply for Logo and Wordmark Registration in Single Application?

Can we apply for Logo and Wordmark Registration in Single Application? Introduction Businesses often wonder whether they can register both…

2 mins ago

Compliance Calendar for October 2025

Compliance Calendar for the Month of October 2025 Introduction As October 2025 approaches, it is crucial for businesses, professionals, and…

42 mins ago

Can I Use Different Colour Combinations After Applying Logo as a TM Application? 

Can I Use Different Colour Combinations After Applying Logo as a TM Application?  Introduction When it comes to protecting your…

2 hours ago

FLA Return Filing for NRI Investment via NRO Account: Is It Mandatory?

FLA Return Filing for NRI Investment via NRO Account: Is It Mandatory?  The FLA return NRI NRO investment applicability query…

5 hours ago

Can We Apply for Startup India Recognition Without Organisation-Based DSC?

Can We Apply for Startup India Recognition Without Organisation-Based DSC?  Introduction When applying for Startup India recognition, founders often ask…

24 hours ago

LLP Company Full Form & LLP Act 2008: What You Must Know About Partner Liability & Enforcement

LLP Full Form & Act 2008: Partner Liability Explained Introduction Most people know the LLP Company Full Form as just…

1 day ago