Daniel Gray CPA
ITIN Application - USA RN Nursing licence or Student of US School with Taxable Scholarship
The biggest challenge is finding an application reason acceptable to IRS for such ITIN need. An ITIN cannot arbitrarily be issued upon request but instead must fit squarely into a predetermined application schema prescribed and set by IRS. There are many nuances to the process and each application differs from the next based on application reason.
1. Application to a RN licence in US state Board of Nursing isn’t acceptable for applying for ITIN (don’t waste your time using the ‘other’ reason box – you’ll get rejected).
a. If you’re not eligible for SSN, look for work-around solutions or to get a TIN that RN application accepts.
i. See the following link: https://my.uscis.gov/exploremyoptions/h1_visas_for_temporary_workers indicates that with an HB-1 visa one would be entitled to a Social Security number (USA visa screen as a health care worker that would entitle one to a HB-1 visa)
2. If you’re eligible for SSN, you need to apply for SSN not ITIN
a. You’re eligible for an SSN if (you’re a U.S. citizen or if) you’ve been admitted by the United States for permanent residence or U.S. employment
i. At a certain point of time you may not yet have been admitted by the United States for permanent residence or U.S. employment and are thus currently not yet eligible for SSN and could apply for ITIN IF you have a valid reason.
b. To find out if you’re eligible to get an SSN, go to SSA.gov or contact a Social Security Administration (SSA) office http://www.ustaxservices.ca/post/2018/08/07/torontos-local-social-security-office-niagara-falls-ny-only-the-ssa-record-nametin-must-b
What about a foreign student needing an ITIN for reporting taxable scholarship a US school or university?
When scholarship is taxable income
A scholarship or fellowship grant is tax free only to the extent:
•It doesn't exceed your qualified education expenses;
•Tuition and fees required to enroll at or attend an eligible educational institution; and
•Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. These items must be required of all students in your course of instruction.
•It isn't designated or earmarked for other purposes (such as room and board), and doesn't require (by its terms) that it can't be used for qualified education expenses; and
•It doesn't represent payment for teaching, research, or other services required as a condition for receiving the scholarship. For exceptions, see Payment for services, later.
· Form 1098-T details on the amount of scholarships, fellowships and grants received.
· Keep receipts for textbooks, supplies and equipment, Form 1098-T won’t have that information.
· taxable scholarship is considered “unearned income,” subjecting it to the kiddie tax if the child is under 19 or is a full-time student under age 24
o Under the old tax code, this would’ve meant that unearned income exceeding $2,100 is subject to the parents’ rates, and families would use Form 8615 to calculate the liability.
o Under the new tax law, however, the “unearned income” will instead be subject to trust income tax rates — meaning that taxable income exceeding $12,500 will be taxed at the top rate of 37 percent.
If you’re present in the United States on a F-1, J-1, or M-1 work-related visa but won’t be employed (your presence in the United States is study related), you need to obtain a letter from your School Official (DSO) or Responsible Officer (RO) clearly stating that you won’t be securing employment while in the United States and your presence here is solely study related.
A school letter should be a much easier process than the 8288/SSA rejection letter process.
If the reason for an ITIN request is because you need to provide Form 8233 to the withholding agent, you must file Form W-7 and provide proof that you are not eligible for an SSN (your Form SS-5 was rejected by the SSA) and include a Form 8233.
Designated School Official (DSO)
The school employees who are recognized and authorized by the USCIS to advise, counsel, and assist F-1 and/or M-1 students in relation to federal law and regulation, and to execute federal forms related to the status and activities of such students.
Responsible Officer (RO)
The school employee who is recognized and authorized by the U.S. Department of State (DOS) to be the primary person responsible for advising, counseling, and assisting J-1 exchange visitors in relation to federal law and regulation, for executing federal forms related to the status and activities of such individuals, and for supervising the activities of Alternate Responsible Officers (AROs).
Also see these links: