What Is an ITIN?

ITIN Definition and Purpose

An Individual Taxpayer Identification Number (ITIN) is a nine-digit tax processing number issued by the Internal Revenue Service (IRS) for people who are required to have a US taxpayer identification number but are not eligible to obtain a Social Security Number (SSN). An ITIN always begins with the digit 9, which is what distinguishes it from an SSN.

Navigating the US tax system can be challenging, especially for individuals who are not eligible for a Social Security Number. An ITIN not only allows individuals to meet US tax obligations but also opens the door to a wide range of financial opportunities, including filing tax returns, opening bank accounts, and claiming tax benefits.

When to Apply for an ITIN Number

The best time to apply for an ITIN is before or on the due date of your federal tax return. You should file it with your federal tax return, not separately. If you need to apply late, you can apply for an extension. Keep in mind that an extension only applies to the return itself. Any taxes owed must still be paid by the April due date.

Benefits of Having an ITIN

Holding an ITIN enables you to participate meaningfully in the US financial and tax system regardless of your immigration or residency status. The benefits are substantial.

ITIN and US Loans

While access to traditional US loans can be limited for ITIN holders compared to SSN holders, a growing number of lenders do offer loan products to individuals with ITINs. These typically include personal loans from community banks and credit unions, home purchase loans (ITIN mortgages) offered by select lenders, certain auto financing programs, and small business loans through community development financial institutions.

The key to loan eligibility as an ITIN holder is establishing a solid banking history and beginning to build credit through secured credit cards or credit-builder accounts before applying. The longer your credit file, the stronger your chances of approval.

Building US Credit With an ITIN

Building credit in the United States as a foreign national is entirely possible with an ITIN. The process typically involves four stages: opening a US bank account first, then applying for a secured credit card that reports to the three major bureaus, using it responsibly and paying in full every month, and applying for standard credit products after 12 to 18 months of positive history.

Some credit issuers, including American Express and Citibank, may also accept your existing international credit history to accelerate this process through their global credit transfer programs.

Who Qualifies for an ITIN?

The IRS issues ITINs to the following groups of individuals who need a US tax identification number but cannot obtain an SSN:

• Non-resident aliens required to file a US federal tax return
• US resident aliens who file on the basis of days present in the country
• Dependents or spouses of US citizens or resident aliens
• Dependents or spouses of non-resident alien visa holders
• Non-resident aliens claiming tax treaty benefits
• Students, professors, or researchers on temporary visas with taxable US income