SSN and ITIN knowledge becomes significant for anyone planning to live or work in the United States. These identification numbers open doors to many essential American services.
The Social Security Administration issues Social Security Numbers (SSNs) to U.S. citizens and authorized residents. In contrast, Individual Taxpayer Identification Numbers (ITINs) serve foreign nationals and undocumented residents. The IRS created ITINs in 1996, and each number starts with 9 and has 70-88 as its fourth and fifth digits.
The right identification number matters for filing taxes, opening bank accounts, and applying for credit cards. A clear understanding of these two systems will help determine which one matches your situation.
What is SSN for NRIs?
A Social Security Number (SSN) is a nine-digit identification number that the Social Security Administration assigns to track earnings and determine benefit eligibility. Non-Resident Indians (NRIs) need proper work authorization from the Department of Homeland Security to get an SSN.
What can I do with an SSN?
Your SSN lets you access key services in the United States. This number helps you:
- File taxes and report wages to the government
- Start employment with U.S. employers
- Open bank accounts and apply for loans
- Get a passport
- Access government benefits
- Apply for federal financial aid as a student
Applying for a SSN as a noncitizen
You can start your application after getting work authorization. The process requires you to wait at least 10 days after arriving in the United States. This waiting period will give enough time to verify your immigration documents through government systems.
Your application needs original documents that prove:
- Identity through unexpired passport
- Age through birth certificate or passport
- Work-authorized immigration status
The Social Security Administration checks all documents with the Department of Homeland Security before assigning a number. So most applications get verified quickly through online systems. You will receive your SSN card within 14 days after approval.
What is ITIN for NRIs?
The Internal Revenue Service (IRS) issues Individual Taxpayer Identification Numbers (ITIN) to process taxes. This nine-digit identifier starts with 9 and has specific ranges from 70-88, 90-92, and 94-99 in its fourth and fifth digits.
What can I do with an ITIN
Your ITIN lets you handle several important tasks:
- File federal tax returns and claim allowable tax benefits
- Open interest-bearing bank accounts at certain institutions
- Participate in financial transactions with businesses
- Complete W-9 forms for tax reporting purposes
Keep in mind that an ITIN won't authorize you to work in the United States. It doesn't provide eligibility for Social Security benefits or qualify dependents for Earned Income Tax Credit purposes.
Applying for an ITIN
You'll need to submit Form W-7 with your federal tax return to apply. You should also provide documentation that proves your identity and foreign status. The IRS accepts original documents or certified copies from issuing agencies.
Your application's processing time depends on when you submit it. Applications take 9-11 weeks during peak periods (January 15 – April 30), especially when you submit from abroad. The process usually takes 7 weeks outside these peak times.
The ITIN stays valid for three consecutive tax years. It expires on December 31 of the third consecutive year if you don't use it on federal tax returns. You'll need to reapply using Form W-7 if this happens.
Comparison Table
Conclusion
SSN and ITIN serve as vital identification numbers that fulfill different purposes in the United States. SSN holders receive full employment authorization and access to government benefits. ITIN provides foreign nationals a way to meet their tax obligations and participate in simple financial transactions.
Your specific situation and legal status in the United States determines whether you need an SSN or ITIN. People who plan to work legally in the US should obtain an SSN since it requires proper work authorization. ITIN becomes the right choice when you need to file taxes without work authorization.
These key differences help you select the option that matches your circumstances. iNRI's tax experts can help you file your taxes and guide you through the process.
Frequently Asked Questions (FAQs): SSN & ITIN
What is the main difference between an SSN and an ITIN?
An SSN (Social Security Number) is issued to U.S. citizens and authorized residents with work authorization, while an ITIN (Individual Taxpayer Identification Number) is for foreign nationals and undocumented residents who need to file taxes but are not eligible for an SSN.
Can I use an ITIN for employment purposes?
No, an ITIN does not authorize work in the United States. It is primarily used for tax filing purposes and some financial transactions. For employment, you would need a valid SSN.
How long does it take to receive an SSN or ITIN?
An SSN is typically received within 14 days of application approval. For an ITIN, processing times vary, with 7-11 weeks being common depending on whether it's peak tax season or not.
Can I have both an ITIN and an SSN?
No, you cannot have both. If you become eligible for an SSN after having an ITIN, you should notify the IRS, and they will combine your tax records under your new SSN.
How often do I need to renew my ITIN?
An ITIN remains valid for three consecutive tax years. If unused on federal tax returns during this period, it expires on December 31 of the third consecutive year, and you would need to reapply.
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