Zero, the entire ITIN application process
The entire process can be simply understood into six steps:Confirm the tax scenario → prepare the W-7 and tax form → verify the passport → wait for the IRS review → receive CP565 → open an account and apply for a card.
Simply put, it is to first confirm why you are eligible to apply for ITIN, and then prepare the corresponding tax materials and identification certificates and submit them to the IRS. After the review is approved, the IRS will allocate ITIN and send CP565. After getting the number, you can apply for a bank account, credit card or other financial services according to each financial institution's own rules.
1. Use a few words to explain ITIN first
What is ITIN?
The full name of ITIN is Individual Taxpayer Identification Number, generally called "individual taxpayer identification number" in Chinese. It is a 9-digit number issued by the IRS (Internal Revenue Service) and is mainly issued to such people:Due to U.S. federal tax matters, a taxpayer identification number is required, but you do not have an SSN and are not eligible to apply for an SSN.
If you don't want to remember this long list of definitions, you can simply understand it as:ITIN is a tax number used to identify individuals in the U.S. federal tax system.
What can't ITIN do?
Special emphasis must be placed here:ITIN is first and foremost a tax number.
It is not a U.S. ID card, a work permit, and it does not mean that you have obtained U.S. residency or immigration status. The IRS is clear on this: ITIN does not confer legal work qualifications, does not change a person's immigration status, and does not allow holders to receive Social Security benefits or Earned Income Tax credits for this.
Therefore, never interpret ITIN as "an alternative ID card without SSN." which solvesFederal tax identification issues, rather than identity, immigration or work qualifications issues.
What is the difference between ITIN, SSN and EIN?
These three numbers are often put together by everyone. They all seem to be a string of American numbers, so they are easy to confuse when they first contact them.
Simply remember:
- SSN: Mainly for individuals, used for social protection and related identity, employment and tax systems;
- ITIN: It is also a personal number, but mainly solves the tax identification problem of people who do not have SSN and have U.S. federal tax needs;
- EIN: It mainly corresponds to a business or other entity and is the company's federal employer identification number.
So if you do business with an American LLC,EIN is the company's tax number, and ITIN is your personal tax number. The two are not the same thing. Just because a company has EIN does not mean that an individual already has ITIN.
2. What is the use of ITIN?
Official perspective
From the official perspective of the IRS, ITIN mainly focuses on U.S. federal taxation. Common uses include:
- Submit Form 1040 or Form 1040-NR;
- Report relevant U.S. income that meets requirements;
- Apply for a refund of qualified withholding taxes;
- Apply for tax treaty treatment when it meets the requirements;
- Declare permitted tax benefits as a spouse or dependant;
- Provide U.S. taxpayer identification numbers in tax information reporting documents.
Therefore, if you look at it purely from the perspective of the IRS, the core use of ITIN is actually very simple:Because you have U.S. federal tax matters, the IRS needs a number to identify you.
Extended use in reality
But in reality, people often come into contact with ITIN not just when filing taxes. Some banks, securities firms, credit card companies or other business platforms will also allow applicants to fill in ITIN instead of SSN in designated locations.
However, two things must be separated here:
The legal purpose of ITIN is tax identification; whether banks, securities firms and credit card companies accept ITIN is a matter of each institution's own compliance and review policies.
Because of this, ITIN has extended some more practical uses in reality, such as:
First, apply for a partial U.S. credit card. American credit cards often have relatively generous card opening rewards, consumer cash rebates or air miles. For people without SSN, ITIN at least gives them the opportunity to enter the application process of some card issuers.
Second, apply for a partial US Checking or Saving account. After you have a U.S. bank account, you can receive ACH transfers, repay credit card bills, and you can also accept U.S. dollar funds transferred from brokers.
Third, gradually establish U.S. credit records. ITIN itself will not automatically generate credit points, but if a credit card is successfully applied for, the card issuer will subsequently submit the account and repayment records to the credit bureau, and there will be an opportunity to gradually establish a credit file.
Fourth, string U.S. stock investment, U.S. bank accounts and credit card consumption. For example, dividends from securities firms or funds after selling stocks can first enter a U.S. bank account, and then the bank account will repay credit card bills. For people who also use American credit cards in the mainland of China, this can reduce the amount of money that is tossed back and forth.
Fifth, lay the foundation for the future use of other U.S. financial services. If you live in the United States for a long time in the future, a normal and stable credit history may also affect your subsequent application for more credit cards, car loans, home loans or other financial products.
For example, some of Capital One's account opening information will accept both SSN or ITIN; when using ITIN, you usually need to submit a tax number notification letter CP565 issued by the IRS. The details still must be based on the review rules of the organization at that time.
However, the order needs to be clear here:The above are all extended uses that may arise after receiving the ITIN, and are not the reasons for the IRS to approve the ITIN application.
The IRS also specifically reminded that you cannot apply for ITIN just because you open a bank account, securities account, operate an e-commerce company, or establish a company. You still need to prove that you have true U.S. federal tax use.
The reverse is the same:Getting an ITIN does not mean that a bank account can be opened, nor does it mean that a credit card can be approved. Financial institutions will also separately review passports, addresses, income, credit history and other information. ITIN just gives you the opportunity to enter the application process and is not a guaranteed pass.
3. DIY: What tax scenarios do ordinary people usually apply for ITIN?
Most of the people who will read this have already thought about applying for ITIN, but they have not yet figured out what reasons they should use to apply and what materials they need to prepare.
Here, we will first talk about the DIY methods for ordinary people, and then we will talk about ways to save trouble. After all, it is better to teach people to fish than teach people to fish. After everyone knows the principle, they will know what the CAA agent is doing for you.
If you are not interested in DIY or are too lazy to study the principles, you can just skip this section and the next section.
For ordinary applicants who are in the mainland of China and do not have SSN, there are two main common DIY paths:After operating Amazon's U.S. station, declare relevant income and declare tax refunds through the 1042-S issued by the securities trader.
Scenario 1: Operate Amazon USA and apply for ITIN through tax returns
The first scenario is more suitable for people who are interested in cross-border e-commerce or who are running Amazon themselves.
After individual sellers register for Amazon USA, they need to complete the platform's tax questionnaire. Non-American sellers usually fill in W-8BEN and can use the China tax number to complete identity declaration at the beginning, so it does not mean that you must have an ITIN before opening a store.
After the store actually starts operating, records such as sales revenue, platform commissions, advertising fees, procurement costs, and logistics expenses need to be kept. When it comes to tax return, Form 1040-NR will be used to declare relevant income based on actual circumstances.
When filing a tax for the first time, if you do not have ITIN, you generally need to submit the W-7, 1040-NR, and the tax form and schedule related to operating income together, and provide identification documents that meet the requirements. To simplify it:
Register and operate an Amazon store → generate real sales records → organize annual revenue and costs → submit W-7 and 1040-NR → apply for ITIN.
The advantage of this path is that the application logic is relatively complete. The sales records, various expenses and collection records in the back office of the store are also relatively convenient to keep.
But be sure to distinguish clearly:Just registering an empty store does not mean that there has been a tax return requirement. It is safer to wait until the store actually starts operating and prepare a tax form based on the actual operating situation.
If you use a U.S. LLC to operate, the store body will generally involve EIN. Emphasize again:EIN is the company's tax number and ITIN is the personal tax number. Just because a company already has EIN does not mean that individuals already have ITIN.
Scenario 2: Ask for 1042-S from a broker and apply for ITIN through a tax refund
The second scenario is more suitable for people who are already investing in U.S. stocks, and the overall operation will look more intuitive.
When non-U.S. tax residents hold U.S. stocks and receive dividends, brokers typically withhold U.S. taxes first and provide Form 1042-S the following year. The 1042-S lists the relevant income, applicable tax rates, and taxes that have been withheld.
For China tax residents who qualify for the China-US tax treaty, the treaty tax rate on U.S. sourced dividends usually does not exceed 10%. If the broker initially deducts taxes based on the default 30%, there may be overdeduction in the middle. At this time, you can download or request 1042-S from a brokerage firm, and then use Form 1040-NR to declare eligible tax refunds to the IRS.
If you didn't have ITIN yet, you could prepare at the same time:
- Form W-7;
- Form 1040-NR;
- Form 1042-S issued by the securities trader;
- W-8BEN, annual statement and other supporting materials;
- Passport or identification document issued by the CAA.
The entire process can be summarized as:
Open a U.S. stock account → submit W-8BEN → hold dividend-paying assets and receive dividends → obtain 1042-S the following year → use 1040-NR to declare eligible tax refunds and apply for ITIN.
There is also a special distinction hereDividends and stock trading gains。What is more common on the 1042-S is dividend withholding taxes; and capital gains arising from ordinary U.S. stock transactions may not require U.S. federal taxes for many non-residents who do not live in the United States for a long time. As a result, such capital gains are usually not the focus of this tax refund path.
4. What do I need to prepare to apply for ITIN?
For most first-time applicants for ITIN, the things you need to prepare can be simply summarized into four categories:
Passport or qualified identification, stable delivery address, true U.S. federal tax basis, and Form W-7 that needs to be completed in DIY situations.
1. valid passport
An original passport that meets IRS requirements or a copy certified by the passport issuing authority is required.
If DIY, you can prepare identification materials in accordance with the requirements of the IRS; if you seek CAA, the CAA will complete the identity verification in accordance with the IRS regulations.
For CAA, interviews or video identity authentication are usually required as required. A major benefit of this is that it avoids sending the original passport directly to the IRS.
2. personal basic information
When filling out W-7 in DIY, you need to prepare:
- Chinese and English names on the passport;
- Date and place of birth;
- Nationality;
- Permanent address in China;
- The China tax number is generally the ID number;
- US visa number, visa type and entry time (if any);
- Common email addresses and contact numbers.
The most important things here are:Name, date of birth, nationality and other information must be consistent with your passport.
I have stepped through this pit myself, and I will talk about it in detail later.
3. US Federal Tax Basis
This is the core part of the entire ITIN application.
You need to prove that you do have U.S. federal tax purposes and prepare corresponding materials, such as:
- Form 1040-NR;
- Form 1042-S issued by the securities trader;
- Real revenue and expense records for cross-border businesses such as Amazon;
- Documentation supporting the application of tax treaties or other exceptions.
You cannot apply for ITIN directly just because you open a bank account or apply for a credit card.
4. Stable delivery address
The U.S. address is not a mandatory requirement for the IRS. People in the mainland of China can also fill in an overseas mailing address.
However, CP565 was sent by ordinary surface mail and there was no logistics tracking. In order to reduce the probability of delays and missing items, it is best to prepare a U.S. address that can receive personal letters stably for a long time, and the recipient's name should be consistent with the applicant.
5. Form W-7
Form W-7 is the official application form for ITIN. The form needs to be filled in your name, birth information, nationality, overseas address, mailing address, foreign tax number, ID card, and the reason for applying for ITIN this time.
Among these contents, name, date of birth and nationality are particularly prone to errors, and it is best to check them word for word after filling them out.
My own CP565 was misspelled because the last letter of the name was misspelled, and subsequent corrections took a long time.
5. Handle through AA or CAA
If you don't plan to do it yourself, you can also apply through AA or CAA.
These two abbreviations may look similar, but there are still differences in what they actually do.
AA（Acceptance Agent） Applicants can be assisted in completing and submitting W-7, but in general, the original ID or a copy certified by the issuing authority still needs to be submitted in accordance with IRS requirements. So looking for AA does not mean that the original passport matter can be avoided.
CAA（Certifying Acceptance Agent） Most identification documents can be verified in accordance with IRS requirements. After the verification is completed, the original can usually be returned to the applicant. This method will be much more convenient for people in the mainland of China who are reluctant to send their original passports across borders.
I chose CAA at the time.
However, one thing needs to be clear:What the CAA can do is to verify, organize and submit materials. The final decision on whether to approve or not remains with the IRS. The CAA cannot guarantee a certain number, nor can it allow applications to skip the normal IRS review process.
Therefore, before choosing a CAA, it is best to first go to the IRS official acceptance Agent list to check the name and authorization status of the agency. Although this step is troublesome, it is still worth taking. Don't directly believe it just by looking at the promotion on social platforms.
List of IRS agents in the mainland of China:
6. How much does it cost to apply for ITIN?
Many people see the process here, and the next question is basically:How much does it cost to run an ITIN?
Let's start with the most easily misunderstood point:The IRS will not charge a separate "download fee" just because it allocates an ITIN to you.
What really generates costs are usually other costs incurred around the application process, such as preparing tax forms, verifying identity documents, international couriers, and AA, CAA or tax accountant service fees.
If it is completely DIY, the main costs generally include:
- Passport certification or notarization fees;
- International express delivery fees;
- If you don't know how to fill out 1040-NR, the cost of purchasing tax filing software or finding someone to prepare a tax form;
- If returned or required for replacement parts, the additional costs incurred in re-certification and mailing;
- The most important thing is actually the time cost.
You have to study U.S. tax forms, understand English letters, study how to mail materials, and watch the entire process yourself.
If you happen to be in the United States, you can also make an appointment at the IRS Taxpayer Assistance Center, which provides ITIN services. TAC's material verification itself is free, and some VITA sites that provide ITIN services may also assist in filling in and verifying materials for free. However, both methods are limited by location, opening hours and reservation quotas, and are usually inconvenient for people in the mainland of China.
It is much easier to apply through AA or CAA, but the service is charged and there is no uniform price on the market. Some quotations only include passport verification and submission of W-7, while some will package all 1040-NR, material sorting, international mailing and follow-up inquiries.
So when comparing prices, it's best to ask clearly first:
What exactly does the quote include? Is there an additional charge for the tax form? Are there additional charges for supplements and subsequent corrections? If CP565 cannot be received, will you assist in querying and re-applying?
I don't recommend simply choosing according to "who is the cheapest", and don't default that it will be downloaded faster just because the other party charges high. What the CAA can help with is verification, collation and submission. It is still up to the IRS to decide whether to approve the final approval and how long it will take.
The CAA I found at that time almost cost 699 US dollars。Now the industry is relatively prosperous and prices are relatively transparent.
7. What will you experience after the materials are sent?
After the materials are handed over, they will generally follow this process:
Materials are sent → IRS sign-in → system entry → manual review → replenishing materials or approval → assigning ITIN → sending CP565.
After knowing this order, I will have a little more understanding when waiting.
For example, if the express delivery shows that it has been signed for, it only means that the materials have arrived, but it does not mean that the auditor has started processing; the number has been dropped in the system, but it does not mean that the CP565 has been successfully delivered to you.
The most concerned issue is usually:How long does it take to wait?
The reference time given by the IRS is generally approximately 7 weeks; If you file during the peak tax filing period from January 15 to April 30 each year, or if the applicant is filing outside the United States, the time may stretch to approximately 9 - 11 weeks。
However, this time can only be used as a reference under normal circumstances and cannot be understood as a countdown. Incomplete materials, incompatible names, requiring secondary review, or delays in international mailing may make the actual cycle significantly longer.
After applying, the more common notices include:
- CP565: ITIN has been allocated;
- CP566: IRS needs more materials;
- CP567: If the application is rejected, it needs to be processed or resubmitted in accordance with the notice.
In addition, ITIN does not have a public real-time online progress page that can be refreshed at any time. If the normal processing time announced by the IRS has exceeded but no notification has been received, you can make inquiries according to the contact information provided by the IRS.
Judging from the externally disclosed application timeline, there are cases where the application is delayed in about two months, there are cases where the application is more than two months, and there are also cases where the application is waiting for three and a half months. Some people have problems due to supplementary materials, CAA submission progress or letter delivery, and the waiting time will be longer.
There is another situation that can easily be misjudged:Just because the identity document is returned does not mean that the ITIN has been rejected. In some DIY cases, the passport or certificate may be sent back first, but the official CP565 will arrive a few weeks later. Therefore, don't rush to conclusions when you receive the certificate, but still rely on the subsequent official notice of the IRS.
8. The number was approved in two months, but it took me almost a year
The first half of my own application was actually quite normal.
About two months after submission through CAA, I was informed that ITIN had been approved and IRS was sending CP565 to the US address I provided.
Naturally, I thought the hardest part was over. The number had been approved, and the next step was to wait for a letter. How complicated could it be?
After waiting for more than a month, the letter never arrived.
I had no choice, so I could only ask CAA for help. They later contacted the IRS and asked it to mail it again. Unfortunately, I still didn't receive the second letter. It seemed that it disappeared after sending it.
In the end, CAA received the CP565 and sent the scanned copy to me.
That is to say,The number itself was approved in about two months, but it had been nearly half a year since I first submitted the application to the time I actually got a usable CP565 scan.
I misspelled one letter, and I waited for another half a year
I waited for nearly half a year, and finally got the scanned copy. I looked at the number first, and then I looked at the name second, and then I was petrified.
my name is LIZHI, but the IRS wrote LIZHE。
There is only one last letter missing, which at first glance may not seem like a big deal, but it is best to keep the passport, ITIN notice, and the materials to be handed over to the bank or IRS in the future. I really dare not continue using it despite this mistake.
So I could only contact the CAA again and ask them to assist in applying for corrections from the IRS.
What is even more troublesome is that the CP565 previously sent to the U.S. address has never been received; this time, the corrected notice was still sent to the same address, but it was still not received.
Again and again, I waited for almost half a year.
Therefore, I submitted the ITIN application the year before last, and it was not until last year that I really received the documents with correct information and safe use.
Looking back, what troubled me the most during the whole process was actually not how to fill in the W-7, nor whether the IRS would approve it in the end, but:
The notice letter could not be sent → After finally getting it, I found that the name was misspelled → I applied for correction again → The corrected letter could not be sent again.
This matter also makes me particularly recommend to everyone:The name on the W-7 must be checked verbatim against the passport.
9. Several common questions about ITIN
How long does ITIN expire?
You can often see a saying on the Internet that "ITIN is valid for three years."
This sentence cannot be said to have no reason at all, but it is not accurate enough. It can easily make people mistake that the number will automatically be invalid three years after it is approved.
In fact, ITIN does not have a "three-year expiration date" that is uniformly written on the number. The IRS rules are:If an ITIN is not used on U.S. federal income tax returns for three consecutive tax years, it will expire after the end of the third unused year.
So the focus is not that "the next number will automatically expire three years later", butThe invalidation rule will be triggered only if it is not used for three consecutive tax years.
Will ITIN affect U.S. visas or immigration?
This should be one of the most worrying issues for many people. I was very concerned about it at the time, and I did verify it myself later.
After getting the ITIN, I later applied for a U.S. visa as usual.
For my experience in applying for U.S. visas, see:
Li Zhi| Rational Investing
@LZRationalnvest
"Ten Years of Personal DIY Records"
In my own experience, I didn't feel that ITIN had an impact on the results throughout the process.
This also fits the IRS's official definition of an ITIN: ITIN does not provide or change a person's immigration status, nor does it grant the right to work in the United States.
However, it should be emphasized here:U.S. visas are reviewed by consular officers on a case-by-case basis based on travel purpose, financial status, personal background and the complete set of application materials.
My experience only shows that I was not significantly affected when I applied it myself and could not use it to guarantee the visa results of others.
When submitting materials, income, business, tax records and information submitted to the eyes should be filled in truthfully and consistent.
I also truthfully filled in ITIN on the U.S. visa application form.
With ITIN, do I have to pay more taxes to the United States?
No.
ITIN itself does not create any additional tax liability. It is just an identification number to let the IRS know "who you are". It will not add an extra tax just because you have this number, nor will it add an extra tax just because you have ITIN.
Whether you need to file taxes in the United States and how much tax you need to pay depends on yourNature of income, tax resident status and specific applicable tax rules, and it doesn't depend on whether you have ITIN or not.
For example, if non-residents hold U.S. stocks and receive dividends, regardless of whether they have ITIN or not, brokers will withhold taxes in accordance with applicable rules.
The difference is:
Without ITIN, it may not be possible to complete the corresponding tax return and tax refund processes if you meet the requirements; with ITIN, you can declare and apply for a refund of overdeducted tax through 1040-NR if you meet the requirements.
Therefore, ITIN itself is not a "number that pays more taxes". Its more accurate understanding should be:
A personal tax number used by the IRS to identify you when you already have a U.S. federal tax matter.