For noncitizens working in the United States, the tax code and all of its requirements can sometimes be extremely confusing. Does that describe your situation? If so, you’re not alone! There are millions of foreign nationals working in the U.S., and each of them is in a situation similar to your own. You know you’ll have to pay taxes, but perhaps you’re just a little confused about what type of identifying number you need to do so. Well, there are only two main options available to you, so let’s take a look at them and how they differ from one another.
The Social Security Number, or SSN, is the main identifying number issued to every American citizen, as well as permanent residents and some temporary residents who are working in the United States for a time and need to be able to file their income taxes. If you’re a noncitizen who has received approval from the Department of Homeland Security, then you too may be able to receive one of these numbers.
The SSN is more than just an identifying number, however. It is the primary means by which the federal government can track a person’s earnings throughout life, and then determine what, if any, benefits he or she is entitled to upon retirement. It’s those benefits that make the SSN an attractive option for anyone who is moving to the United States with the intent to start a new life and become integrated into society.
But what if you’re not eligible for the Social Security Number? Well, you have another option: the Individual Taxpayer Identification Number. This identifying number is provided to those individuals who cannot receive SSNs, and can be used while you are working in the United States. For income reporting and tax filing purposes, it serves exactly the same function as the SSN. And, because the IRS issues these without respect to immigration status, it is the one identifying number that even illegal immigrants can obtain while in the country.
Here’s the thing, though: the ITIN may serve the same tax filing purpose, and can be used as an alternative to the SSN with employers, but it does not provide the exact same benefits that citizens and other legal residents can obtain with the Social Security Number. Someone who holds only an ITIN while working in the United States cannot ever collect Social Security benefits under the laws currently in place.
You can, however, use your ITIN to establish a credit history. And with the right documentation and credit score, you can eventually use your identifying number to seek a loan from a bank or other lender. So, it too can be far more valuable to you than just enabling you to file taxes.
In short, both the SSN and the ITIN are invaluable options for complying with federal tax laws and regulations. You can only have one, of course, so it is wise to check to see if you are eligible for the Social Security Number first. If not, then be sure to apply for your Individual Taxpayer Identification Number at your earliest opportunity to ensure that you have what you need to enjoy the benefits of life in the United States.