What Canadians Should Know About U.S. International Taxpayer Identification Numbers

What Canadians Should Know About U.S. International Taxpayer Identification Numbers

A Taxpayer Identification Number (TIN) is an identification number used by the Internal Revenue Service (IRS) to process tax returns. A TIN can be either a Social Security Number issued by the Social Security Administration or an alternate TIN issued by the IRS.

Non-resident aliens cannot obtain a social security number and instead must obtain an Individual Taxpayer Identification Number or ITIN from the IRS.  An ITIN is needed when a non-resident alien is involved in a financial transaction that is subject to IRS information reporting or federal tax withholding.
 

There are many reasons a Canadian may need an ITIN. Some of the most common reason are:

    You own a U.S. rental property

    You sold U.S. real estate

    You had gambling winnings

    You are the spouse or dependent of someone who files a US tax return

    You are receiving a royalty or pension income which is entitled to tax treaty benefits

    You have a U.S. income tax filing requirement

The ITIN is required to file an individual non-resident tax return ( 1040-NR), process a tax refund, and withhold taxes on certain types of Income in the US.

Please note that the ITIN is for tax purposes only. It does not entitle the holder to social security benefits, nor does it entitle the holder to immigrate or work in the United States.  If an individual is eligible to be legally employed in the United States, that person should not apply for an ITIN, but must apply for an SSN.

To obtain an ITIN, the applicant must complete IRS Form W-7.  This form can be obtained directly from IRS website ( http://www.irs.gov). The IRS requires original or certified copies of documents that substantiate the information on W-7. The applicant may either mail the documentation, along with the Form W-7, to the address shown in the Form W-7 Instructions, present it at IRS walk-in offices, or process an application through an Acceptance Agent authorized by the IRS.

For any information regarding the above, please contact Renate Harrison at 613-747-2459 x 307 or at rharrison@hazlolaw.com.