ITIN for Non-Resident Founders: Application, Requirements & Tips

Starting a business in the U.S. as a non-resident comes with its own set of obligations and requirements that you need to fulfill. For many non-resident founders who operate or invest in the United States, obtaining an Individual Taxpayer Identification Number (ITIN) is often required to comply with the U.S. tax filing and reporting obligations. Without one, you may face challenges filing taxes, opening a U.S. bank account or complying with the federal tax regulations.

This guide will walk you through what an ITIN is, why it is essential for non-residents, how the application process works, the required documents, mistakes to avoid, and how to obtain one.

What Is an Individual Taxpayer Identification Number (ITIN)?

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who are required to file for U.S. federal tax returns but are not eligible for an SSN. It is a nine-digit number that always begins with the number 9 and has a range of 70-88 in the fourth and fifth digits.

Since SSN is only assigned to U.S. citizens and those authorized to work in the U.S., ITIN acts as a substitute for those taxpayers who are not eligible for the SSN.

Why an ITIN is Essential for Non-Resident Founders

Enables non-residents to legally file a U.S. federal tax return.
Necessary for complying with federal tax regulations.
Required for opening a U.S. business or personal bank account.
Helps in maintaining proper financial records for your U.S. business.
Required for dependents or spouses when filing taxes as part of your business setup.
Allows eligible non-residents to claim benefits under U.S. tax treaties.

ITIN Application Requirements

To apply for an ITIN, there are certain requirements to the application process that people may not be aware of. Just being a non-resident doesn’t qualify you for one; the IRS has strict rules regarding who can get one.

Therefore, as a non-resident founder, it is important for you to know whether you’re eligible or not and what documents will be required prior to starting the application process.

Who Is Eligible To Apply

Founders of U.S. companies who aren’t residents of the United States.
Foreign entrepreneurs who earn income in the United States.
Individuals required to file for U.S. federal tax returns but are not eligible for an SSN.

Documents Required for ITIN Application (Non-US Residents)

Form W-7:

Form W-7 is used to apply for an IRS Individual Identification Number. You must fill out Form W-7 and submit it along with a completed tax return (Form 1040-NR).

Form 1040-NR:

Form 1040-NR, also known as a federal tax return in general, is used to file an annual income tax return.

Proof of Identification and Foreign Status Documents:

You are required to submit documents to the IRS to verify your identity and that you are not a U.S. citizen. Your documents must be current and not expired. For non-residents, these are the only practical options:

The Stand-Alone Option (Recommended):

Passport: A valid, unexpired foreign passport is the only document that proves both Identity and Foreign Status by itself. If you provide this, you do not need any other ID.

The Two-Document Option (If no Passport):

National Identification Card
Foreign Driver’s License
Foreign Voter’s Registration Card
Civil Birth Certificate
Visa (issued by U.S. Dept. of State)
Foreign Military ID Card
Medical records (valid only for dependants under the age of 6)
School Records (valid for a dependant under the age of 24, if a student)

How to Apply for an ITIN

There are 3 ways you can apply for an ITIN. The process generally involves completing Form W-7, submitting identification documents and filing a tax return with the IRS. Applications can choose one of the following methods depending on their situation:

1. Make an in-person appointment with an IRS-authorized Certifying Acceptance Agent (CAA) (Recommended)

A Certifying Acceptance Agent (CAA) can make the ITIN application process much easier. They are authorized by the IRS to review and verify your identification documents (such as your passport or birth certificate) during an in-person meeting. Once verified, they return your original documents to you immediately.

This means you don’t have to mail your documents to the IRS, so you won’t be without them while your application is being processed.

2. Make an in-person appointment at an IRS Taxpayer Assistance Centre (TAC)

You can also apply for your ITIN by booking an appointment at your local IRS Taxpayer Assistance Center (TAC). The service is free, but appointments are required and can be difficult to get, especially during tax season.

Not every TAC location offers document authentication. Some can verify your original or certified identification documents on the spot and return them right away. Others will forward your documents, Form W-7, and Form 1040-NR to the IRS for processing.

3. Mail in your ITIN Application

If you prefer to submit your ITIN application by yourself without using CAA or visiting the Taxpayer Assistance Centre, you can do so by mailing everything directly to the IRS.

This option involves sending your completed Form W-7, Form 1040-NR(federal tax return) and your original or certified copies of identification documents to the IRS.

Common ITIN Application Mistakes to Avoid

Even the smallest mistakes can cause significant delays or even rejection when applying for an ITIN. Here are some of the most common mistakes applicants make and how to avoid them:

Submitting Incorrect or Uncertified Documents: The IRS only accepts original identification documents or certified copies issued by an official body (for example, your passport or birth certificate). Regular photocopies or notarized copies are usually not acceptable, and your application will most likely be refused or returned.
Incomplete Form W-7: Leaving any parts blank or providing incorrect information on Form W-7 is one of the leading causes of delays. Take the time to thoroughly review the complete form and double-check all details before submitting.
Missing the Required Federal Tax Return: In most circumstances, you must include a full federal tax return (Form 1040-NR) with your ITIN application. Forgetting to provide it is a common mistake that might result in the IRS rejecting or holding your application.
Submitting the Wrong Identification Documents: Not all documents meet the IRS criteria for the ITIN application process. A valid passport is usually the best and simplest solution because it verifies your identification and foreign status at the same time.
Mailing Original Documents Without Proper Tracking: If you apply by mail, you must submit your original documents to the IRS. Always select a secure, trackable shipping method to monitor the item and limit the possibility of loss or unnecessary delays.

ITIN Processing Time and What to Expect

After the submission of your ITIN application, the standard processing time of your application is 7 weeks, but it could be up to 9-11 weeks if applied during peak tax season or from overseas. The original documents that you submitted along with your application should be returned to you within the 60-day mark.

Once your application has been processed, you will receive an ITIN Assignment Letter notifying you of your new number by mail. Receiving this letter officially confirms that your Individual Taxpayer Identification Number has been issued.

If there are any issues with your application, such as incorrect information or missing documents, the IRS may contact you or reject and return your application for correction. If you do not hear anything from the IRS or get your documents back within the 10-11 weeks, you may contact the IRS.

Key Differences Between ITIN, SSN and EIN

While ITIN, SSN and EIN are all 9-digit tax identification numbers issued by the U.S. government, they are different from one another in the purpose they serve:

Category	Individual Taxpayer Identification Number (ITIN)	Social Service Number (SSN)	Employer Identification Number (EIN)
Issued To	Individuals not eligible for SSN	U.S. citizens, residents and visa holders	Different business entities
Main Purpose	Federal tax reporting for individuals	Employment, payroll and tax reporting	Business Identification for taxes
Number Format	9 digits, starts with a 9	9-digit personal number	9-digit business number
Work Authorization	No	Yes (if eligible)	N/A
Can Co-Exist with one another?	No, replaces ITIN if SSN is eligible	Replaces ITIN	Can co-exist with ITIN/SSN
Application Method	Form W-7	SSA application	Form SS-4
Expiration	Expires if unused for 3+ years or ITIN requires renewal	Permanent	Permanent unless the business is shut down

Conclusion

An ITIN is essential for non-resident founders who need to comply with the U.S. tax obligations. Understanding the ITIN application requirements before proceeding with the application is essential for the smooth processing of your application and avoiding delays.

The process involves submitting Form W-7, Form 1040-NR (federal tax return) along with your valid proof of identification and foreign status documents. Non-residents can apply for an ITIN using authorized bodies for proper guidance or by directly mailing in their application to the IRS.

If navigating through U.S. tax and business requirements feels complex, Foundery USA is here for you to help you through this journey. We help non-resident founders manage processes such as company formation, EIN registration and ITIN application support.

Frequently Asked Questions (FAQs)

1. What is an ITIN?

The Individual Taxpayer Identification Number (ITIN) is a 9-digit tax processing number by the IRS that enables individuals who are not eligible for an SSN to file and pay taxes.

2. Can non-residents apply for an ITIN online?

No, currently there aren’t any services available that allow you to apply for an ITIN online. The IRS requires you to submit your ITIN applications either by mail, through a Certified Acceptance Agent or at an IRS office.

3. Are ITIN and SSN the same?

No, ITIN and SSN are not the same. While both are 9-digit tax identification numbers, an SSN is for individuals who are authorized to work in the U.S., whereas the ITIN is a direct replacement of an SSN for individuals who are not eligible for an SSN but are required to comply with the U.S. tax obligations.

4. Who is required to have an ITIN?

Any non-US citizens or residents who do not qualify for an SSN but need to file for a U.S. federal tax return are required to have an ITIN. Specific individuals include:

Non-residents who are required to file a U.S. tax return
Non-citizen residents who meet the IRS substantial presence test
Dependents or spouses of U.S. citizens
Foreign investors who have ownership in U.S. corporations

5. What is the validity period of an ITIN?

An ITIN remains valid as long as it is used on a tax return at least once every 3 years.

6. How long will it take to receive an ITIN after submitting my ITIN application?

After submitting your application to the IRS, it takes a minimum of 2 months. The processing time takes anywhere from 7weeks to 11 weeks, depending on the time of the year and whether the application is submitted from within or outside the U.S.

7. What are the documents required to submit an ITIN application?

When applying for an ITIN, you are required to submit these 3 documents:

Form W-7
Form 1040-NR (federal tax return)
A proof of identification and foreign status documents