Renewing Your Individual Tax Identification Number (ITIN)
Renewing Your Individual Tax Identification Number
Many Canadians must either pay taxes, file tax returns, or have withholding taxes in the United States. In order to avoid certain taxes payable to the US government, such people need a Individual Tax Identification Number or ITIN. This number is specific to each individual and allows the US government to enter that person into their taxpayer database. This requirement is to make use of the tax treaty between Canada and the US. Some people only need an ITIN once. This comes up most often when a Canadian sells real estate in the US. When they do this, a holding back of funds occurs by an escrow company as a withholding tax. This withholding tax becomes releasable if the seller has a ITIN.
Alternatively, some people must deal with the IRS on an annual or recurring basis. Anyone requiring to file taxes or who has funds held back on an annual basis will need an ITIN renewal to maintain their tax identification number after its expiry. Jeffrey Kahane, of Kahane Law Office in Calgary is an Acceptance Agent under the IRS Acceptance Agent Program and assists with ITIN renewals.
Eligibility For An ITIN
The US government requires numbers to identify individual taxpayers. In Canada we use social insurance cards. The US uses social security numbers. Sometimes people without social security numbers need to deal with the IRS for tax related matters. The US government, issues and ITIN to anyone that does not have eligibility to get a Social Security number in the United States, if they need to deal with tax matters. In most circumstances, only non-US citizens whom the US government granted authority to work the United States, may be issued a Social Security number. Of course US citizens are eligible for one. Anyone else who needs to interact with the US tax system, requires an Individual Tax Identification Number.
When Should Someone Apply For An ITIN Renewal
You are able to apply for an ITIN renewal anytime in the year of its expiry. Anyone with an ITIN expiring in a given year, but whom the US government requires to file a tax return in the year followign the ITIN expiration, must submit their ITIN renewal prior to the expiry of their ITIN. It is important to make sure that you leave enough time for the renewal’s submission to the IRS.
The ITIN Renewal Process
The ITIN renewal process is much like the process in the initial application. If renewing your ITIN from outside the United States, then the renewal must be made through an Acceptance Agent. ITIN renewals use the same W7 form used for an original application for an ITIN. The Acceptance Agent then submits the W7 to the IRS with a Certificate of Accuracy. The Certificate of Accuracy is a document that allows the US government to know that a review of your identification ensured its validity and acceptability. A simple notarization of your passport is not an acceptable alternative if applying from outside the US. The alternative to using an acceptance agent is to mail in your application along with your proof of identity (meaning your Canadian Passport). Since postal services occasionally lose the mail, a good practice includes not mailing in your renewal application.
How Long Does An Individual Tax Identification Number Renewal Take?
As with many things related to any government, the time stated by that government for an application is often shorter than the reality. It is our experience that an Individual Tax Identification Number renewal takes from 2-3 months. There are times that the renewal takes less time. However, there are also times that the renewal takes longer. It is important to ensure that you leave enough time for your renewal so that your ITIN does not expire.
Documentation Require For ITIN Renewals
There are advantages to ITIN renewals compared to new applications. The primary advantage of renewing includes the fact that you submit fewer documents. One of the most significant is that you are not required to file the renewal with a tax return. That said, if you are required to file a tax return, then you may want to include it with your renewal. This ensures the government receives the renewal package in time. The advantage to this timing aspect is that it may prevent a delay in any tax refund that is owing back to the person. All documentation required must be an original or a certified copy of the document.
Retaining An Acceptance Agent In Calgary
If you need to renew your ITIN, we are happy to help. While the renewal process is not complicated, you require an Acceptance Agent if applying from outside the United States. Most people do not want to fly to the US to start the renewal process. We usually can get clients in to sign their renewal within a few business days. We offer regular and expedited service with respect to delivering your renewal application to the IRS. If you want to set up an appointment, please call or email our team. Call us today. 403-225-8810 or email us directly here.