An Individual Taxpayer Identification Number (ITIN) is a nine-digit tax identification number issued by the Internal Revenue Service (IRS) to individuals who must file a federal income tax return but are not eligible for a Social Security Number (SSN). Foreign nationals, nonresident aliens, and other taxpayers who must report income, purchase U.S. property, or make an estimated payment toward their tax obligations often rely on an ITIN to remain compliant.
The ITIN is used strictly for tax purposes. It does not grant immigration status, a work visa, or eligibility for Social Security benefits. However, it plays a critical role in real estate transactions, including meeting lender requirements for a down payment or documenting eligibility to claim credits on a tax return. Without an ITIN, many individuals cannot apply, submit forms, or provide the documentation needed to complete legal transactions.
This guide explains the full ITIN application process, from eligibility and required documents to ITIN renewal for expired numbers. You will learn how to qualify, file correctly, and avoid common IRS issues such as rejection notices. Applicants and tax professionals will find detailed instructions and practical guidance on obtaining, renewing, and correctly using an ITIN when filing federal tax returns, applying for mortgages, or supporting a dependent or spouse in U.S. real estate transactions.
The Foreign Investment in Real Property Tax Act requires foreign persons to provide taxpayer identification numbers when buying or selling U.S. property. Foreign sellers face automatic withholding from their sale proceeds unless they provide proper tax identification.
Mortgage lenders must report income to ITIN holders each year through Form 1098. Settlement companies also need valid taxpayer identification to complete the required forms during property sales involving foreign persons. These reporting requirements apply to all mortgage transactions regardless of loan amount or property type.
Standard ITIN processing takes seven weeks. During tax season (January 15 through April 30), processing stretches to nine or eleven weeks. Start your ITIN application ten to twelve weeks before your closing date. This allows time for processing delays and potential resubmission if needed.
Foreign nationals buying U.S. property typically need ITINs for tax compliance and mortgage applications. You must file annual tax returns reporting this income if you earn rental income from U.S. properties. Property disposition also triggers specific tax obligations that require proper taxpayer identification for compliance.
Foreign nationals in the United States who meet residency tests but cannot get Social Security Numbers need ITINs. Students on F-1, J-1, or M-1 visas often fit this description when buying property. Academic professionals and researchers may also require ITINs to claim treaty benefits that reduce their U.S. tax obligations while maintaining proper tax compliance.
Family members need ITINs only when they qualify for specific tax benefits on their federal tax return. For tax years 2018 through 2025, this includes joint filing status or specific tax credits. Foreign spouses filing joint returns with U.S. citizens need ITINs to claim married filing jointly status. This often provides better tax treatment than filing separately.
Exception 3 lets you apply for an ITIN when you have a home mortgage on U.S. property without filing a tax return. Your lender must report mortgage interest payments to the IRS through Form 1098. This exception serves borrowers who need ITINs primarily for mortgage-related tax reporting rather than current-year tax filing obligations.
Exception 4 covers people involved in property sales by foreign persons, including buyers, sellers, and withholding agents. This exception addresses FIRPTA compliance requirements and applications for reduced withholding certificates. You can complete the required forms without filing the current year's tax returns.
All applicants must prove identity and foreign status through acceptable documents. You need documents showing who you are and confirming your foreign nationality.
Form W-7 requires accurate personal information that matches your supporting documents exactly. Choose reason (h) "Other" with Exception 3 or Exception 4 noted for real estate transactions. Name spelling and dates must match your documents precisely to avoid processing delays or rejections that require complete resubmission.
New applicants check "Apply for a new ITIN”, while renewal applicants select "Renew an existing ITIN" based on their specific circumstances. Your reason selection determines the required supporting documentation, so Exception 3 applicants must provide mortgage-related documents, while Exception 4 applicants need FIRPTA-related forms. Treaty benefits require additional information on the country and article number in designated spaces.
Exception 3 applicants need to complete Form W-7, mortgage documentation proving your home loan, and acceptable identity documents. Mortgage documentation includes purchase contracts, settlement statements, or loan papers showing home mortgage loans on U.S. property. The documents must show current mortgage obligations rather than future lending commitments.
Exception 4 applicants need Form W-7, FIRPTA forms (8288, 8288-A, or 8288-B), and real estate transaction documents. FIRPTA documentation must be completed and signed before submission of the ITIN application. Real estate transaction documents include sales contracts, settlement statements, or closing disclosures showing the foreign person's disposition, triggering withholding requirements.
Mail submission is standard. Send your complete package to the IRS ITIN Operation in Austin, Texas. Include all required original documents or certified copies, as the IRS cannot accept photocopies or scanned documents. Processing begins when complete packages reach the ITIN Operation, making proper packaging and tracking important for monitoring application progress.
Taxpayer Assistance Centers offer in-person verification with appointments. TAC services allow immediate document return after verification, but limit acceptable document types to passports, national identification cards, and birth certificates for dependents. Certified Acceptance Agents provide broader document verification and return originals immediately after authentication, making them valuable for time-sensitive real estate transactions.
Standard processing takes seven weeks. During peak season, processing extends to nine to eleven weeks. The IRS sends CP565 assignment notices for approved applications. After the expected processing times pass, you can check the status by calling IRS customer service.
ITINs expire when unused on federal tax returns for three consecutive years, expiring December 31 of the third year. Pre-2013 ITINs that have never been renewed must complete the renewal process before use. ITINs not used on 2021, 2022, and 2023 tax returns expired December 31, 2023, and need renewal before the 2024 filing.
Renew your ITIN only when it expires and you need it for current federal tax returns. If you are not filing federal tax returns this year, you do not need to renew expired ITINs. To avoid delays, taxpayers planning to file a federal tax return must renew expired ITINs before submission.
Certified Acceptance Agents receive IRS authorization to authenticate and return original documents immediately. This helps real estate transactions where original documents cannot remain out of possession for extended periods. CAAs provide instant document return after authentication, eliminating 60-day waiting periods for mail submissions.
CAA eligibility includes tax professionals, educational institutions, and financial organizations. Before applying, all responsible parties must complete mandatory ITIN training and forensic document identification training through online modules on the IRS website.
A foreign investor wants to buy rental property without work authorization. This requires an ITIN assignment under Exception 3 for mortgage interest reporting. Begin the application ten to twelve weeks before closing. Required documents include a foreign passport, a purchase contract, and settlement statements.
A U.S. citizen married to a foreign national plans to buy a family home. The foreign spouse needs an ITIN for joint filing status. Children need ITINs only if they qualify for tax credits available to U.S. residents.
Application rejections usually result from insufficient documentation, expired documents, or missing Form W-7 information. Rejected applications require complete resubmission with corrected documentation. Insufficient proof causes rejections when applicants submit photocopies instead of originals. Expired documents also trigger rejections.
Suspense notices request additional documentation within 60-day response deadlines. Respond with only the specific information requested rather than complete resubmissions. CP566 notices specify exactly what additional documentation the IRS needs. Provide only the requested items with reference to the notice number.
Begin by determining your Social Security Number eligibility and confirming your ITIN needs based on tax obligations. Careful timeline planning is essential for real estate transactions involving ITINs. Choose between mail submission, Taxpayer Assistance Centers, or Certified Acceptance Agents based on your needs.
Tax professionals serving international clients should consider the Certified Acceptance Agent designation to expand services. CAA authority proves valuable for real estate practices where international buyers need efficient ITIN processing.
Yes, many lenders accept ITINs for mortgage applications, but the requirements are stricter than those for Social Security Number borrowers. ITIN applicants may face higher down payment requirements, more stringent debt-to-income ratios, and manual underwriting instead of automated approval systems. Lenders typically verify ITIN validity, request prior federal tax returns, and review tax transcripts to confirm stable income documentation.
Yes, both Exception 3 and Exception 4 allow ITIN applications without attaching a current-year tax return. Exception 3 applies to individuals with U.S. mortgage loans, requiring mortgage documents as proof. Exception 4 applies to real estate transactions under FIRPTA, requiring completed Forms 8288, 8288-A, or 8288-B. Identity and foreign-status documentation are always needed to establish eligibility.
During peak filing season, from January 15 through April 30, ITIN processing can take nine to eleven weeks instead of seven. To avoid delays, applicants should begin the ITIN process ten to twelve weeks before an expected real estate closing. Using a Certified Acceptance Agent can reduce document handling issues and speed up verification.
Spouses and dependents need ITINs only when they qualify for allowable benefits on a federal tax return. From 2018 through 2025, this may include joint filing, the Child and Dependent Care Credit, or the Credit for Other Dependents. Children must generally be U.S. residents or nationals to qualify, and eligibility must be documented with valid supporting paperwork.
Because of IRS system limitations, new ITIN holders cannot electronically file federal tax returns during the year their number is issued. Instead, applicants must paper-file returns and mail completed forms and supporting documents to the IRS. Once the ITIN is active, taxpayers may e-file future returns, but the first filing must be handled manually.
Certified Acceptance Agents generally provide faster processing because they authenticate various documents and return originals immediately. They charge fees but save time and reduce rejection risks. Taxpayer Assistance Centers are free but require scheduled appointments and only verify certain documents, such as passports or birth certificates. CAAs are often better for real estate transactions.
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