ITIN (Individual Taxpayer Identification Number)

When a payer needs a contractor’s ITIN

A payer never asks for an ITIN as such. It asks for a US taxpayer identification number, and for an individual who can’t get an SSN, the ITIN is the only kind there is. Publication 515 says it directly: if an individual “does not have and is not eligible for an SSN, they must apply for an ITIN by using Form W-7.”

The question for a payer is when a US number is required at all. Publication 515 lists the cases where a US or foreign TIN must generally be on a withholding certificate, starting with tax treaty benefits. It then gives the escape that covers most foreign contractors: instead of a US TIN, “you may request a foreign TIN issued by the payee’s country of residence except when the payee is a nonresident alien individual claiming an exemption from withholding on Form 8233.”

That sentence sorts contractors into two groups. A contractor who works from home abroad gives you a W-8BEN. Their pay is foreign-source, and if they make a treaty claim, the W-8BEN instructions accept a foreign tax identifying number on line 6 in place of an SSN or ITIN on line 5. A contractor who performs services in the United States and claims a treaty exemption from withholding on that pay gives you a Form 8233 instead, and its instructions are blunt: “You must furnish a U.S. taxpayer identification number (TIN) on this form. In most cases, you must enter your SSN on line 2.” Without one, “you must get an ITIN.”

Applying with Form W-7

Form W-7 is the application, and the instructions for it (December 2024 revision) set two requirements beyond the form itself.

The first is a reason. Most applicants must attach a US federal tax return, and the ITIN is issued as part of processing it. Applicants who don’t have to file can apply under one of the listed exceptions instead. The one that fits a contractor claiming a treaty exemption on pay for personal services is Exception 2(a), for wages, salary, compensation and honoraria. Its documentation is a letter of employment, a copy of the contract or an invitation letter for a speaking engagement, together with evidence of the treaty claim and “a copy of the completed withholding agent’s portion of Form 8233 attached to Form W-7.” In other words, the payer signs its part of the Form 8233 first, and the contractor applies with it.

The second is proof of identity and foreign status. The instructions list 13 acceptable documents, accept only originals or copies certified by the issuing agency, and say the documents must be current. A passport is “the only stand-alone document.” Without one, the applicant needs at least two documents from the list, one with a photograph.

There are three ways to submit. The applicant can mail the package to the IRS in Austin, book an appointment at an IRS Taxpayer Assistance Center, or use an acceptance agent. A Certifying Acceptance Agent can verify the original documents and “will return the documentation immediately after reviewing its authenticity,” which spares a contractor from mailing a passport overseas. The instructions add that acceptance agents “are available both domestically and abroad.”

One caution in the instructions trips up people who visit the United States to work. Applicants “receiving compensation for personal services performed in the United States, or issued a U.S. visa that’s valid for employment, should first apply for an SSN.” Unless the Social Security Administration denies the SSN and the denial letter goes with the Form W-7, they “aren’t eligible for an ITIN.”

While the application is pending

The IRS says to “allow 7 weeks” for notice of the result, and that “it can take 9-11 weeks if it’s tax season (January 15 to April 30) or if you applied from overseas.” A contractor booked for onsite work in March may not have a number in time.

The Form 8233 instructions anticipate that: “If you have applied for an SSN or ITIN but have not yet received it, you can attach a copy of a completed Form W-7 or SS-5 showing that a number has been applied for.” A payer can accept the Form 8233 on that basis, keep the copy with the file, and update its records once the contractor sends the assigned number. The IRS mails the number on notice CP565.

What a payer can’t do is treat a missing number as optional. The instructions say a US TIN must be furnished on the form, and the pending-application copy is the only stand-in they describe. A Form 8233 with neither is missing a required entry.

Expiry after three years, and renewal

ITINs don’t last forever. The Form W-7 instructions say: “If your ITIN wasn’t included on at least one U.S. federal tax return for the last 3 consecutive tax years, it expires on December 31 of the third consecutive tax year, and must be renewed before being used again on a U.S. federal tax return.” The Form 8233 instructions give the same rule from the other side: an ITIN stays in effect as long as the holder filed a return, or was included as a dependent on another taxpayer’s return, at least once in the last 3 tax years.

A worked case shows how it bites. A contractor’s ITIN last appeared on a federal return for tax year 2024. They file no return for 2025, 2026 or 2027. The ITIN expires on December 31, 2027, and a Form 8233 they hand a payer in 2028 carries a number that has to be renewed before it goes on their next return.

The instructions draw a line around who is affected. “If your ITIN is only used on information returns filed with the IRS by third parties, you don’t have to renew your ITIN for purposes of filing a U.S. federal tax return.” Renewal becomes necessary when the holder next files a return. Renewal uses the same Form W-7, with the renew box checked and the existing ITIN on line 6f, and an ITIN assigned before 2013 that was never renewed needs a renewal application with the return.

For a payer, the practical habit is to ask, when a contractor sends a new Form 8233 each year, whether the ITIN on it is still current, rather than copying last year’s number forward.

ITIN, SSN, EIN and foreign TIN compared

Four numbers can sit in the taxpayer identification box of a contractor’s paperwork, and each belongs to a different kind of payee.

An SSN is the default for individuals. The IRS lists US citizens, green card holders and a nonresident alien with a US work visa among the people who don’t need an ITIN, the last “since you qualify for an SSN.” An ITIN is for an individual who needs a US number for tax purposes and can’t get an SSN. The IRS is clear that “You can’t have both an ITIN and an SSN”: once an SSN is issued, the holder stops using the ITIN and writes to the IRS to combine the records.

An EIN is for entities, and for individuals who are employers or run a US trade or business as sole proprietors, per Publication 515. A foreign contractor who invoices through their own company gives that company’s details on a Form W-8BEN-E, not an ITIN.

A foreign TIN is the number the contractor’s home country issues. It goes on line 6 of the W-8BEN, and for most treaty claims it is enough on its own. Form 8233 is the case where it isn’t.