Lana Oconnell
International students who are not eligible for a Social Security Number (SSN) and have received taxable scholarships, grants, or fellowships from a US source will need an Individual Taxpayer Identification Number (ITIN) to file their taxes. An ITIN is a unique tax-processing number issued by the Internal Revenue Service (IRS) for nonresidents who need to file a tax return. To apply for an ITIN, students must submit a completed Form W-7, tax return, proof of identity, and foreign status documents to the IRS.
| Characteristics | Values |
|---|---|
| Who issues ITIN? | Internal Revenue Service (IRS) |
| Who is eligible for ITIN? | Non-residents with taxable income (like scholarships) but are not eligible for a Social Security Number (SSN) |
| Who is not eligible for ITIN? | J-1 students and scholars, employed or intending to start work soon |
| Documents required for ITIN application | Passport, visa stamp, or alternative documents |
| Application form for ITIN | Form W-7, “Application for IRS Individual Taxpayer Identification Number,” with a U.S. tax return |
| How to check the status of the ITIN application? | Call the IRS toll-free at 1-800-829-1040 |
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What You'll Learn
Individual Tax Identification Number (ITIN)
An Individual Tax Identification Number (ITIN) is a 9-digit number issued by the Internal Revenue Service (IRS), the US tax collection agency. It is a tax processing number for non-resident aliens who need to file a tax return because of taxable income but are not eligible for a Social Security Number (SSN). SSNs are only issued to non-residents who are employed.
You need an ITIN if you have a federal tax purpose and are not eligible for an SSN. This includes if you are legally required to file a US federal income tax return, want to claim a refund or tax benefit, or need to report income. You can only use your ITIN for tax reporting purposes.
To apply for an ITIN, you must complete IRS Form W-7, the application for an IRS Individual Taxpayer Identification Number, and submit it with your tax return. You can mail the documentation, along with the Form W-7, to the address shown in the form instructions, present it at IRS walk-in offices, or process your application through an Acceptance Agent authorised by the IRS.
If your ITIN is lost, do not apply for a new number. Instead, check copies of your previous tax returns to find the ITIN you entered on the form, or contact the IRS to look up your ITIN. If your ITIN has expired, you must renew it either in person, by mail, or by submitting Form W-7 with your tax return.
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Eligibility for Social Security Number (SSN)
International students or non-citizens may be eligible for a Social Security Number (SSN) if they meet certain criteria. Firstly, they must be employed or intend to start working soon, as SSNs are generally issued to non-residents who are employed. Students who are not employed but receive scholarships, fellowships, grants, or non-employment stipends may not be eligible for an SSN but can apply for an Individual Tax Identification Number (ITIN).
To apply for an SSN, individuals must provide original documents or copies certified by the issuing agency. Photocopies and notarized copies are not accepted. All documents must be current and not expired. To prove U.S. immigration status, individuals must show one of the following documents: Form I-551 (Lawful Permanent Resident Card), I-766 (Employment Authorization Document), I-94 (Arrival/Departure Record), a Certificate of Naturalization, or an unexpired foreign passport with an admission stamp. F-1 or M-1 students must also provide their I-20 (Certificate of Eligibility for Nonimmigrant Student Status).
If individuals are applying for work authorization or lawful permanent resident status through the United States Citizenship and Immigration Services (USCIS), they may be eligible for the automated process called Enumeration Beyond Entry (EBE). Those who use Form I-765 or I-485 can apply for an SSN without visiting a Social Security office, as USCIS will send the necessary information to issue an SSN card. The card will be mailed to the address provided on the application within 7 to 10 business days after receiving the Employment Authorization Document from USCIS.
It is important to note that if an individual is assigned an SSN for non-work purposes, they cannot use it for employment. If they do so, the Social Security Administration will inform the Department of Homeland Security (DHS).
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Taxable scholarships, grants, or fellowships
As an international student in the United States, you will need to file tax forms each year with the Internal Revenue Service (IRS), the US agency that collects federal taxes. If you are not eligible for a Social Security Number (SSN) because you are not working, you will need to apply for an Individual Taxpayer Identification Number (ITIN) to report any non-wage income when filing these taxes. An ITIN is a unique tax-processing number issued by the IRS for those who pay taxes but are not eligible for an SSN.
If you receive a scholarship, fellowship grant, or grant, all or part of the amounts you receive may be tax-free. Generally, scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions:
- You're a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities.
- The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses.
However, if any part of your scholarship or fellowship grant is taxable, you may have to make estimated tax payments on the additional income. For example, a non-qualified scholarship is an amount issued for any other purpose, including travel, room, board, or research. This amount is subject to a 14% federal tax withholding, although a tax treaty may apply that would make this exempt from taxes. Stipends, tuition waivers, or financial aid that requires the performance of services in exchange for the financial aid are taxable as wages, are reportable to the IRS, and are subject to the withholding rules.
In general, US-sourced taxable scholarships, fellowships, and grants that do not represent compensation for services are not subject to withholding when paid to US citizens and resident aliens, but they are subject to withholding when paid to non-resident aliens. The withholding tax rate is 30%. However, the withholding tax rate may be reduced to 14% (or a lower treaty rate) if a non-resident alien is a student, researcher, or grantee who is temporarily present in the United States with an "F," "J," "M," or "Q" visa, and the taxable amounts received are either:
- Incident to a qualified scholarship to which section 117(a) applies.
- Granted by certain types of organizations described in section 1441(b)(2).
If you are unsure whether you will claim a tax treaty benefit, review the IRS "US Tax Treaties" publication before proceeding with your request. If you received a scholarship/fellowship stipend directly paid to you, you should apply for an ITIN. Non-employment income, including scholarships, fellowships, grants, or non-employment stipend payments not paid by your educational institution, may also require an ITIN for reporting purposes. These can be taxable if they are greater than the cost of tuition and fees.
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Application process for ITIN
International students can apply for an Individual Tax Identification Number (ITIN) if they need to report non-wage income, such as scholarships, grants, or fellowships, on their tax filings. ITINs are issued by the Internal Revenue Service (IRS) to individuals who need to report income but are ineligible to obtain a Social Security Number (SSN) from the Social Security Administration.
To apply for an ITIN, students are required to submit the following items to the IRS:
- Form W-7, "Application for IRS Individual Taxpayer Identification Number," with a U.S. tax return
- Form I-94 printed from the U.S. Customs and Border Protection website
- Passport personal information page, and passport validity page showing the expiration date (if separate)
- Grant, Fellowship, or Scholarship Award Letter indicating the amount and details
- Copies of immigration documents, including the DSO ITIN Certification Letter, and completed IRS forms
Students can apply for an ITIN by mail and can seek assistance from a tax professional to ensure correctness. The anticipated wait time for an ITIN is 6-8 weeks. After processing, the IRS will issue the ITIN by mail.
It is important to note that if an individual has applied for an SSN and their application was denied, they must submit the denial letter from the Social Security Administration along with their ITIN application. Additionally, international students who are employed or intend to start working soon should apply for an SSN instead of an ITIN.
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Using ITIN for US financial products
An Individual Tax Identification Number (ITIN) is issued by the Internal Revenue Service (IRS), the US tax collection agency. ITINs are for non-residents who need to file a tax return because of taxable income but are not eligible for a Social Security Number (SSN). SSNs are only issued to non-residents who are employed.
ITINs are nine-digit numbers that always begin with the digit 9. They are formatted like SSNs: 9XX-XX-XXXX.
ITINs are accepted by some brokers as a valid means of identification when opening trading accounts. They are a primary form of identification in the US for all earners. Individuals who do not have permission to work in the US can request and obtain an ITIN, which can then be used to open accounts with an online broker.
If you are an international student with taxable income, you may need to apply for an ITIN. F and M students who are ineligible for an SSN must apply for an ITIN if they need to report their income. To apply for an ITIN, an F or M student must submit a Form W-7, "Application for IRS Individual Taxpayer Identification Number", with a US tax return.
If you are an international student and you want to invest in stocks, you can do so using an ITIN number. You will need to find a brokerage firm that accepts ITIN for account setup.
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Frequently asked questions
ITIN stands for Individual Taxpayer Identification Number.
International students who are not eligible for a Social Security Number (SSN) but receive grants, fellowships, scholarships, or other non-wage income may need an ITIN.
If you are unsure, you can use GLACIER Tax Prep (GTP) to determine if you need an ITIN. GTP is web-based tax preparation software that is available for free at some universities.
You can apply for an ITIN by mailing Form W-7, a tax return, proof of identity, and foreign status documents to the Internal Revenue Service. You can also apply in person at an IRS Taxpayer Assistance Center.
In addition to filing taxes, you may be able to use your ITIN to access U.S. financial products such as a bank account or credit card.
