If you do not have a social security number, perhaps because you do not have legal immigration status in the US yet, then I strongly recommend that you obtain and use an Individual Taxpayer Identification Number (ITIN). Here are four key points:
- No fear of INS – An ITIN is not used as an immigration enforcement tool. Many millions of undocumented workers use ITINs without fear of triggering deportation actions.
- Accrue future benefits – As an ITIM holder your are not eligible for Social Security benefits or the Earned Income Tax Credit (EITC). But if you become eligible for Social Security in the future by becoming a lawful permanent resident, then the earnings reported with an ITIN is counted toward the amount of retirement benefits that you may eventually be eligible to receive.
- Health insurance – An ITIN can be used immediately to obtain any insurance on any state exchange and any policy listed at Freedom Benefits. The Inbound Immigrant policy is most popular and in some ways is superior to other available options. ITIN holders are not eligible for tax credit subsidies to pay for health insurance. Fortunately, the premiums for alternate policies are lower than the cost of Obamacare.
- Bank account – An ITIN can be used to open a bank account that is increasingly important for electronic payroll deposit systems. An ITIN does not make it legal for you to work in the U.S.
Apply for an ITIN directly with the IRS using this form or use a qualified tax preparer to submit the form electronically. I offer this service without additional charge when submitting a tax return for a client without a social security number. You must submit other proof of identity to get an ITIN. Avoid third party web sites that advertise to apply for the ITIN on your behalf since they are primarily focused on obtaining your personal information for other marketing purposes.