Most foreigners desire to work in a state which is established and has most of the lucrative opportunities. When we talk about the lucrative opportunities and benefits, one of the most established states is United States of America (USA). Investors wish to reside and either work as an employee or form a business. But it is not a piece of cake. In order to reside in the United States, one need to obtain visa and even that’s not it; along with the visa there are a lot of other associated complexities such as obtain TIN numbers. For this reason, you will find people asking, can I work with an ITIN number?
Moving on and emphasizing more on the term ‘work’ here, we can come up with two types of concepts. A foreigner trying to work in the United States either wants to work as an employee or work as a business owner there. The case can be any, but a foreign investor has to obtain a visa. However, those who are asking can I work with an ITIN number must keep in mind that if want to work as an employee they have to obtain an SSN number while if they want to pursue their career as a business owner in the United States, they should acquire an EIN number.
This blog covers pertinent information for those who are pondering over can I work with an ITIN number, so keep reading in order to explore its answer. We will be discussing from both the aspects i.e. working as an employee as well as working as a business owner, because an individual requires different Tax ID numbers for both the working statuses.
What is a Tax ID Number?
All those who have always desired to work in the United States, should remember that after obtaining an E2 visa, the next step is to obtain tax ID numbers. These numbers are a source of letting them fulfill their tax obligations depending on their status. If you are really concerned about the question, can I work with an ITIN Number, you must know what tax ID numbers are. Basically, tax ID numbers are identification numbers that are issued for tax purposes by the Internal Revenue Service (IRS). There are five types of Tax ID numbers, out of which only three are active. So we will focus on them only.
All the numbers consist of nine digits. The five types include the following numbers:
- Social Security Numbers (SSNs)
- Individual Taxpayer Identification Numbers (ITINs)
- Employer Identification Numbers (EINs)
- Adoption Taxpayer Identification Numbers (ATINs)
- Preparer Tax Identification Number (PTIN)
In order to clarify the answer to the question can I work with an ITIN number, you need to clearly understand the types of Tax ID numbers.
Do You Really Need a Tax ID Number?
Prior to understanding can I work with an ITIN number, you must first know if you really need a Tax ID number. If you do not require it, you need not obtain any of the Tax ID numbers. Now, you may be thinking how you will get to know whether you need one or not. A Tax ID number is furnished upon statements, returns, and tax related documents. People trying to figure out can I work with an ITIN number, should know that a Tax ID number is only furnished in two situations.
- When you need to claim treaty benefits
- When you need to file taxes
If you are facing or require fulfilling any of the two obligations mentioned above, then you need a Tax ID number. Now let’s look upon the three types of Tax ID number to explore the answer to the query ‘can I work with an ITIN number’.
1. Social Security Number (SSN)
Before we jump to the details for can I work with an ITIN number, you must first understand what an SSN number is. A Social Security Number (SSN) is granted by the Social Security Authority (SSA). The number is comprised of nine digits and it is only granted to individuals who are willing to work in the United States as an employee, so all those who are asking can I work with an ITIN number, the answer is no, they cannot work. This is because individuals require an SSN number to work as an employee in the United States instead of an ITIN number. We will be discussing about ITIN too later on.
Moreover, people who are permanent residents and citizens of the United States, are given SSN numbers. However, at times, it is also granted to temporary aliens who wish to or are asking can I work with an ITIN number i.e. who wish to work there as an employee. Now that you know you do not need an ITIN number for working in the US, you may want to know how you can obtain an SSN number. You just have to fill the form SS-5 and the United States Citizenship and Immigration Services (USCIS) will authorize you to be issued an SSN number.
Furthermore, the Social Security numbers are required for work, social security pensions, and to meet the requirements of other social services. The SSN numbers have three different types of social security cards which include the following. So people pondering over can I work with an ITIN number should see which type of SSN they require.
- One of the most common types of SSN number has the person’s name and social security number. This type is basically for the permanent residents and US citizens.
- The other type is for the temporary workers or those people who have a non-resident status. But they are qualified for employment with the DHS and they are applicable to satisfy I – 9 eligibility requirements.
- The third and last type of the SSN number is issued for the tax purposes and this type is not preferred to be used for the I – 9 form or for employment.
Basically, by law only the residents and citizens of the United States are eligible to get the SSN numbers but as per the new law it is also granted to those who are temporary workers and are willing to work in the United States. So, all those who are trying to figure out can I work with an ITIN number, they must know that only non-citizens who are willing to work in the United States are eligible to get an SSN number otherwise they do not. Also, an ITIN number is of no use to them.
2. Individual Taxpayer Identification Number (ITIN)
Most of the people have a misconception that they can start their business or work as an employee in the United States with an ITIN number which is why we see many people asking can I work with an ITIN number. These people actually do not know the base and foundation of an ITIN number that is why they are perplexed and pondering over it. So, first you need to understand what an ITIN number is. The ITIN number stands for Individual Taxpayer Identification Number and it is based on nine digits. Moreover, this number is granted to those people who are dependents.
An ITIN number is given to the dependents for the sake of fulfilling the tax obligations. This number does not give them the authority to work or start a business. However, it is a tax processing number that gives them the authority to file taxes and returns and nothing more than that. So, all those confused with the question can I work with an ITIN number, should keep this thing in mind that ITIN is not required for work purposes.
One can obtain an ITIN number by filling form W-7 to file their returns. Also, people often are given ITIN numbers who are not eligible for the SSN number but it does not mean that they can start working there using it. Here are some facts that you need to know about ITIN numbers so that you get a clear insight for the query, can I work with an ITIN number.
- ITIN are not like SSNs. Both of them are entirely for two different purposes hence ITINs cannot be used to start work and getting employed. It will just serve for tax purposes. They do not provide legal status for work.
- An ITIN does not highlight an immigration status. Additionally, it can also not be used to prove their presence in the United States. ITINs are not valid for identification outside the Federal tax system.
- ITINs cannot be used for the proof of identification in order to obtain a driver’s license. However, there are certain states that allow using ITIN number to obtain driving license.
- Apart from other aspects, one can also open an interest bearing bank account with the help of an ITIN number.
- There may be a point where you may have to proof your residency; though ITIN can’t be the authentic proof but it can at least tell the time spent in the United States as a dependent.
Now that you know the answer to the question can I work with an ITIN number, you may have understood that you do not need an ITIN number for working as an employee, instead you require an SSN. You will find the procedure to obtain an SSN number in our next section.
3. Employer Identification Number (EIN)
The Employer Identification Number is the form of Tax ID number which is provided to all those individuals who are willing to work as a business owner or start a business in the United States. So, as we discussed in the beginning that we will be looking into both the aspect of the work as both of the concepts are distinct, this is the section highlighting that you require an EIN number to form a business in the United States.
Consequently, people who are asking can I work with an ITIN number, if you want to work as an entrepreneur there, you do not require an ITIN again, you just require an EIN number for it. There is no role of an ITIN for work purposes as it does not give you work authorization at all as mentioned previously.
Furthermore, The EIN number contains nine digits in it and is also known as Federal Tax Identification Number. Also, here is another wrong concept among people who are asking can I work with an ITIN number, that they require having either an ITIN number or an SSN number to acquire EIN. Well, this is again not true, they require neither of them. EIN number is itself a tax ID number and does not require either them.
Difference Between Employer Identification Number (EIN), Social Security Number (SSN) and ITINs
We hope that now the ones who were confused about usage of tax ID numbers and were trying to know the core of the query can I work with an ITIN number, may have understood that they do not need an ITIN for any sort of work in the United States, rather it is required for filing tax returns if you are ineligible for an SSN. As we have discussed in detail above, that a business and employment are two different aspects which is why both of them require different tax ID numbers.
So, all those who have saved money and capital for their business in the United States, they should remember that an SSN is for individuals who wish to work there as an employee while an EIN is for those who wish to start their business in The United States. However, they have two similarities i.e., both of them are comprised of nine digits as per the standard law and are provided to individuals only by the United States Citizenship and Immigration Services (USCIS).
Why ITIN Numbers are Not a Better Choice? Here’s Why
After knowing the answer for can I work with an ITIN number, now you may be wondering why ITIN is not a smart choice and better one over SSN numbers and EIN numbers. Well, there are some reasons to it. Let’s have a look at them below.
- First of all, an ITIN cannot replace the SSN and EIN number. These two numbers are standard numbers which all individuals require to either form a business or work in a firm in US.
- Secondly, ITIN was merely created for tax purposes and not any other which is why it is not authorized for work.
- Lastly, an ITIN is for dependents and not for foreign investors. Though it is granted to them temporarily. If dependents also wish to start a business or getting employed in US, they need to obtain an E2 visa instead of H4 visa. This is basically the requirement to change their immigration status which is a lengthy process.
How Can You Obtain an SSN Number to Getting Employed in the United States?
Those who wanted to work as an employee in a credible firm of the United States may now have understood the answer to the question can I work with an ITIN number. They may now want to know the procedure to obtain an SSN number from the Social Security Authority (SSA). The procedure is described in the form of steps given below.
The Procedure to Obtain an SSN Number
- Step # 1: Firstly, you need to get your documents and papers showing that you are authorized by the DHS, to get SSN number.
- Step # 2: You need to either visit your local SSA office or fill the form SS-5 online for the Social Security Card.
- Step # 3: Take the two documents proving your age, identity and work authorization status at the SSA office.
- Step # 4: Submit the application or form along with the documents at the local office. Soon the IRS will contact you when your SSN number is ready.
The entire process is a bit lengthy and time consuming and is not as easy as it seems like. The time consuming and most complicated part is the documentation but once you get an SSN number in your hands, you can easily look for employment opportunities. Furthermore, because of the difficult documentation, it is highly recommended to hire a credible consultant or a seasoned attorney who can guide you throughout in filling out the documents.
How Can You Obtain an EIN Number to Form a Business in the United States?
Since now all the aspiring people willing to start a business organization in the United States now may know what it takes to take the plunge, also, they now may have got the answer to the question can I work with an ITIN number, so now they may be interested in knowing how to obtain an EIN number from the United States Citizenship and Immigration Services. The entire procedure is elaborated in the form of steps given below.
The Procedure to Obtain an EIN Number
- Step # 1: An individual needs to hire a credible lawyer who can represent their business as a third party designee.
- Step # 2: The lawyer will prepare the application for the Employer Identification Number by filling form 1041.
- Step # 3: After the preparation of the application, the lawyer will contact the IRS office for the applicants and send the form to them.
- Step # 4: As soon as the application will get approved by the IRS, your lawyer will receive the EIN number for your business on the same day.
After looking at the procedure, you may have realized that how much a lawyer’s role is essential throughout. Therefore, you must hire the one who is a seasoned, veteran and has good reviews. The documentations are pretty complex and a single incorrect document submitted to the IRS office will result in complete cancellation of the process causing loss at your end. So, choosing a lawyer smartly and wisely will ensure a hassle free process.
We hope that this blog answers the question, can I work with an ITIN number and helps you in making an informed decision for your future.