For newcomers in the U.S. it is crucial to possess a form of national I.D. number in order to work, file taxes, obtain Social Security, apply for bank accounts and healthcare and more. We cover the two forms of national I.D.s in this article and explain the following:
- Difference between SSN and ITIN
- How a SSN helps
- How to apply for an SSN as a noncitizen
- How an ITIN helps
- How to apply for an ITIN as a noncitizen
What’s the difference between a Social Security Number (SSN) and an Individual Taxpayer Identification Number (ITIN)?
At its most basic level, a SSN is for US citizens and authorized noncitizen residents. Authorized residents range from students on F1 visas to Green Card holders, but the underlying theme is they have legal authorization to work in the United States.
Social Security numbers are needed to work, collect Social Security benefits and pensions, and are required in order to be eligible for other social services. Every American has a SSN, unlike driver’s licenses and passports. Because a SSN functions as a National ID number, it is used across a range of financial and medical services. Only noncitizens authorized to workin the US are eligible for SSNs.
An ITIN is for residents with foreign status. This includes undocumented aliens and nonresident aliens that conduct business in the United States. Foreign entities that operate in the United States, including foreign corporations, partnerships, trusts and estates would also require an ITIN.
What can I do with a SSN?
A SSN corresponds to legal immigration statutes. In turn, opening a bank account is easier, and can often be done online. It makes it easier to build credit in the U.S., file medical forms, and apply for student loans. Additionally, with a SSN, you are paying into the U.S. Social Security system. If you remain in the United States, this means as a retiree you are eligible for retirement benefits. It's possible to get a credit card without an SSN, but SSNs also allow you to apply for credit cards more easily.
Applying for a SSN as a noncitizen
Applying for a SSN requires filling out the Application For A Social Security Card (Form SS-5). You can file your application at your local SSA office. Generally, you will need to wait 10 days after arriving in the United States to apply for a SSN. You will need two original documents proving your identity, immigration status, work eligibility, and age. A work permit provides proof of your identity and work-authorized immigration status.
What can I do with an ITIN?
The ITIN program was created by the IRS in July 1996 to help foreign nationals and other individuals who are not eligible for a Social Security number (SSN) to pay the taxes they are legally required to pay. Aside from filing your taxes and opening a bank account, the ITIN unfortunately does not help much. As opposed to SSN, it does not provide legal immigration status or work authorization.
An ITIN also allows foreign nationals to:
- In selected states, obtain a driver’s license
- Provide proof of residency. This is especially valuable for undocumented resident aliens that plan on ultimately applying for legal immigration status as it indicates years of taxes paid. ITIN taxpayers who ultimately get SSNs will have the money they contributed transferred into their Social Security accounts.
Applying for an ITIN
Applying for an ITIN requires filing a W-7 form along with your tax returns. ITIN is not an immigration enforcement tool. Taxpayer privacy is crucial to the IRS, and they do not disclose taxpayer information.
No one should have both an ITIN and a SSN at the same time. For example, if a SSN application is pending, an ITIN will not be issued even if the individual completes and submits a Form W-7.