How to Get a ITIN Number for Business?

How to get a ITIN number for business? An Individual Taxpayer Identification Number (ITIN) is a specific tax processing number that is distributed by the IRS.3 min read

How to get a ITIN number for business? An Individual Taxpayer Identification Number (ITIN) is a specific tax processing number that is distributed by the Internal Revenue Service (IRS). An ITIN has nine digits, always begins with the number 9, and has a 7 or an 8 as the fourth digit (e.g., 9XX-7X-XXXX). In order to obtain an ITIN number, an applicant must complete IRS Form W-7, the application for Individual Taxpayer Identification Number.

Tax ID Numbers (TIN)

The United States requires any foreign investor who wants to form a business in the country to obtain a Tax ID number. The IRS issues these identification numbers in accordance with tax law for specific tax purposes. Individual taxpayers who have an obligation to file a tax return are granted a Social Security Number (SSN). Legal immigrants can apply for a SSN when completing the immigrant visa application with the United States State Department. If you complete both of these applications, a visit to the Social Security office may not be needed upon arrival into the United States.

It is also an option to visit the Social Security office to apply for a SSN once you arrive into the United States. In the event that an individual is not eligible for a SSN, the IRS will use an ITIN to identify non-resident aliens and foreign nationals who must report federal taxes. Specifically, ITIN numbers are granted to non-citizens who are employed in the United States and must file taxes. However, if those individuals would like to open a business in the United States, an ITIN number is not required.

The IRS will only issue an ITIN to the following individuals:

  • Those who do not have a valid SSN.
  • United States resident aliens who must file taxes, and their spouses.
  • Foreign nationals who must file taxes.

Employer Identification Number (EIN)

An Employer Identification Number (EIN) has nine digits. It is sometimes referred to as a Federal Tax Identification Number. The IRS issues an EIN in order to identify a business. Consider that an EIN is like a SSN for your business. In order to lawfully operate a company in the United States, an EIN is required.

It is mandatory for the following entities to obtain an EIN number in order to operate:

  • Governmental agencies.
  • Limited liability companies.
  • NGOs.
  • Partnerships.
  • Corporations.
  • Sole proprietorships.
  • Trusts.

There are specific requirements that individuals must meet in order to qualify for an EIN number. They include:

  • Operating a partnership, corporation, or a sole proprietorship.
  • Compensating your employees up to $600 or more.
  • Holding wages and other income tax for non-residents.
  • Operating a non-profit organization.
  • Holding a tax-deferred pension plan.
  • Filing taxes for alcohol, tobacco, firearms, excise, and employment.
  • Working with estates, trusts, farmers' cooperatives, and real estate mortgage investments.

How to Open a Business in the United States Without an ITIN Number

There is a misconception that in order to form a business in the United States an ITIN is required. This is why there are often many questions from foreign business owners asking how to open a company without having an ITIN number. It is important to remember that in order to establish a company in the United States an EIN must be obtained, not an ITIN number

To clarify, businesses use EINs and not ITINS. However, if you are a resident alien or a foreign national without an SSN and must file taxes, and you are planning on starting a sole proprietorship or a single-member limited liability company (LLC), you will require an ITIN in order to complete the company's taxes. An EIN will still also be needed.