If you’re a nonresident alien living and working in the United States, you’re probably aware of your obligation to pay taxes. Unlike citizens and other permanent residents of the country, however, you may not be entitled to your own Social Security number. Instead, you can be issued an Individual Taxpayer Identification Number, otherwise known as an ITIN. The good news is that your ITIN is not only invaluable for meeting your tax obligations, but can provide a number of other key benefits as well!
First of all, this number is essential for individuals who are working and paying taxes in the United States without a Social Security number. The Internal Revenue Service requires an ITIN for taxpayers in your situation so that it can process your tax return, collect taxes owed, and return any refunds to which you might be entitled. In fact, that is precisely why this numbering system was designed.
Still, if you are living in the United States, you have other concerns to worry about as well. You need a place to live, transportation, and other costly items. If you are working to become a permanent legal resident, then you will eventually want to buy a home as well. That takes credit. The ITIN can help you there as well. The credit scoring companies make no distinction between the SSN and ITIN when it comes to both credit use reporting and credit scores. By having an Individual Taxpayer Identification Number, you ensure that you meet the minimum legal requirements for obtaining loans. Just as important, you ensure that your payments actually work to establish a positive credit score over time.
Of course, before you can get a loan from any financial institution, you first have to be eligible to use their banking products. Under federal law, that means that you have to be able to prove your identity, and that requires an identification number. The ITIN serves that purpose just as effectively as the Social Security number. That means that you at least meet the legal requirements for opening a savings or checking account, credit lines, and various loans.
And while you are not eligible to receive Social Security benefits, the taxes that you pay into that system are tracked so that there is a record of them over time. That helps to ensure that if you should become eligible for them at some point in the future then those previous payments will be counted when your benefits are calculated.
It is important to remember that there is one thing that the ITIN is not designed to do: it does not allow you to work in the United States if you are otherwise ineligible to do so. For those who are legally permitted to engage in employment within the U.S., however, it is an essential alternative to the Social Security number. More importantly, it can provide the type of benefits that you’ll need to maintain your quality of life while you’re in the country.