U.S. Tax I.D. Numbers for Canadians

U.S. Tax Id

Are you interested in obtaining an Individual Taxpayer Identification Number? Read on to find out what an ITIN (Individual Taxpayer Identification Number) is and how you can apply for one. Please note, that this number is not a replacement for the Social Security Number (SSN). This information will teach you how to apply for an IRS Individual Taxpayer Identification Number in Canada. 

What is an ITIN?

An Individual Taxpayer Identification Number (ITIN) is a number that is assigned to non-resident aliens of the U.S. who earn income in the U.S. This number is not a replacement for the Social Security Number (SSN) and does not grant any residency status in the U.S. (unlike a green card or work visa). There are new requirements for Canadians to obtain a U.S. tax I.D. number.

Previously, the IRS would issue an ITIN applicant an ITIN card. However, due to the confusion and similarity to an SSN card, the IRS has amended this policy and now only issues a confirmation letter to Canadians applying for a tax I.D. number in the U.S.

If you are eligible for an SSN, you must first apply for one. Persons eligible to receive a Social Security Number are not eligible to receive an ITIN. If the Social Security Administration denies the applicant’s request for an SSN they will issue a letter of denial. That letter must be attached to the Form W-7 (application for an ITIN) when it is submitted to the IRS.

Who Should Apply for an ITIN?

An ITIN can be applied for by a foreign U.S. taxpayer who is not eligible for a Social Security number and must provide a taxpayer identification number. Examples include:

  • An individual who is required to file the U.S. income tax return;
  • Dependents of an individual that wants to claim the dependents and qualify for eligible tax credits and deductions while filing a U.S. tax return;
  • Individuals are subject to certain third-party withholding tax;
  • A nonresident alien individual claiming reduced withholding under an applicable income tax treaty.

An ITIN will also be required when selling a U.S. real property in the following situations:

  • When withholding taxes are being paid with the filing of Form 8288, U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests, and Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests
  • If the taxpayers wish to request reduced withholding while filing Form 8288-B, Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests
  • When filing the income tax return required under the Foreign Investment in Real Property Tax Act (FIRPTA) when disposing of U.S. property

Can apply for a U.S. Tax ID Number help with taxes?

As a Canadian earning income in the U.S., the tax I.D. number provides several key benefits. These include:

  • Lower withholding taxes on U.S. income earned
  • Claiming foreign tax credits on your Canadian tax return for U.S. taxes paid
  • Reducing the chance of double taxation

In addition to these benefits, the IRS stipulates that the ITIN is required to file your U.S. Non-Resident Tax Return (1040-NR), process a tax refund, and withhold taxes on certain types of income in the U.S.

How can Canadians get a tax identification number (ITIN)?

To properly apply for your ITIN, you must prepare Form W-7 and present proof of residence in Canada. The IRS streamlined the number of documents it accepts as proof of identity and foreign status to obtain an ITIN. There are 13 acceptable documents.

  • Each document must be current and contain an expiration date. The IRS will accept documents issued within 12 months of the application if no expiration date is normally available.
  • Documents must also show your name and photograph, and support your claim of foreign status. The most commonly used document by Canadians applying for ITIN is a Canadian Passport.
  • Notarized copies from a lawyer are not acceptable. The IRS will only accept copies that are certified by the issuing agency.

If you do not provide these documents, your ITIN Application will be denied.

As a cross-border tax specialist operating in Mississauga, we can help you with:

  • Getting a tax identification number
  • Co-ordinate your ITIN application to minimize delays
  • Identifying withholding tax requirements in the U.S. and opportunities to minimize these taxes.

Please note that Form W-7 for your tax ID number is usually only accepted when it is submitted with your Non-Resident U.S. tax return. However, there are certain exceptions to this rule that can help expedite the application process.

Why Should I Have An ITIN?

ITIN or Individual Tax Identification Number; It is a type of individual tax identification number for people who do not have an SSN. ITIN helps you open a U.S. bank account, open a Paypal, Stripe, or Amazon account, file a tax return, and get your credit score

Can A Canadian Get A Us Tax Number?

U.S Taxpayers who do not have a U.S. identification number to obtain an ITIN are required to possess this ID number. They file their annual U.S. Social Security Statement (SSN) with the IRS. If you have any U.S. income, you must file a tax return. In this way, rental income and gains and losses from property sales are reported, rather than relying on income generated from rental units.

How Do I Get A Us Tax Identification Number?

Using the IRS’s Interactive Tax Assistant tool, you can determine whether you need to file for an Individual Taxpayer Identification Number (ITIN). An ITIN is obtained through the application process conducted by IRS Form W-7, IRS Application for Individual Taxpayer Identification Number.

How Does A Canadian Get A Us Tax Id?

What steps do Canadians need to follow to receive an id number (ITIN)? Form W-7 and a Canada residence proof of residency must be submitted before you can establish your residency in Canada to properly obtain your ITIN. ITINs are available by offering fewer documents the IRS accepts as proof of identity and nationality. It is a three-page, thirteen document format.

How Can I Check My ITIN Status?

You must notify the IRS via telephone at 1-800-829-1040 (IRS Phone Number) at the end of the application process if any data appears.

Does Everyone Have A Tax Id Number?

(ITIN) is a number assigned by the IRS to individuals who file IRS returns? The owner of something other than the actual owner, or an individual engaged in an international scheme would qualify for the exemption. To conduct business as a sole proprietor, you need an Employer Identification Number (EIN).

Bottom Line

If you are planning to file your U.S Taxes with Filing Taxes, please do not hesitate to contact us today at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.

Written By:
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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