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  • Daniel Gray CPA US Tax Services Toronto Canada

ITIN reasons and qualification


You have to meet the return filing reason , or one of the exception-to-return-filing reasons. One cannot just arbitrarily apply for an ITIN as you must include documentation proving that you need one and that your reason aligns with IRS qualification requirements to receive one. The IRS sets out a finite prescribed list of qualification requirements – all split into two groups – IRS-return-filers OR exceptions. One reason that can be used for many applicants when they can’t qualify under other reasons, is owning many but not all types of USA bank accounts (so long as the US bank provides you with the required ITIN letter).

Exceptions:

  • Individuals who are partners of a U.S. or foreign partnership that invests in the United States and that owns assets that generate income subject to IRS information reporting and federal tax withholding requirements

  • Individuals who have opened an interest-bearing bank deposit account that generates income that’s effectively connected with their U.S. trade or business and is subject to IRS information reporting and/or federal tax withholding

  • Individuals who are “resident aliens” for tax purposes and have opened an interest-bearing bank deposit account that generates income subject to IRS information reporting and/or federal tax withholding;

  • Individuals who are receiving distributions during the current tax year of income such as pensions, annuities, rental income, royalties, dividends, etc., and are required to provide an ITIN to the withholding agent (for example, an investment company, insurance company, or financial institution, etc.) for the purposes of tax withholding and/or reporting requirements.

  • Wages, Salary, Compensation, and Honoraria Payments

  • Scholarships, Fellowships, and Grants

  • Gambling Income for non-resident aliens visiting the United States who:

  • Have gambling winnings,

  • Are claiming the benefits of a tax treaty for an exempt or reduced rate of federal tax withholding on that income, and

  • Will be utilizing the services of a gaming official as an IRS ITIN Acceptance Agent.

  • Third-Party Reporting of Mortgage Interest

  • Third-Party Withholding—Disposition by a Foreign Person of U.S. Real Property Interest


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