ITIN applications for Third-party withholding requirements
Only applicable if a third party has requested the ITIN for example, a property manager, an investment company, an insurance company, or a financial institution, etc.
This is one of the exceptions available, where the applicant does not have to attach the U.S. tax return, 1040NR.
Text from IRS instructions:
“An original document or signed letter from the withholding agent, on official letterhead, showing your name and verifying that an ITIN is required to make distributions to you during the current tax year that are subject to IRS information reporting and/or federal tax withholding. Self-generated income statements will only be accepted with a copy of the contract or a letter with a postmarked envelope addressed from the withholding agent.”
Please note if withholding was done in a previous year already and a tax return is due, you cannot use this option. Get the tax return instead. For Example, if your withholding was done in 2022, the tax return will be due in 2023. If your tax return is due, you cannot follow the below process in 2023.
Supporting Documents: Hard Requirement
You should ask the third party (insurance company or financial institution) to issue a letter meeting all the below requirements:
- The letter should be on the letterhead of the company displaying the logo, name and address.
- Original signatures with ink, no e-signing or other form of signatures. Must show the name and position of the person who is signing the letter. If it’s a computer-generated document and/or computer-drawn signatures, the postmarked envelope is a must.
- Must be mailed to you, and you need to bring the envelope to our office in which it came to you. The letters cannot be emailed to you but should come in actual mail as the original letter and envelope are required.
- Must show your full legal name as per your passport. Do not use initials or skip middle names. Enter full name as per passport. If the full name does not match the passport, the application will not be accepted by us.
- Enter the address of the property.
- Must state that they ‘verify’ that an ITIN is required to make distributions to you during the current tax year that are subject to IRS information reporting and/or federal tax withholding.
- Can be addressed to either you or ITIN Operations at Internal Revenue Service.
Please send a copy before asking them to mail the original to you. Please note that we do not comment on the letters if the fee is not paid. Due to an extremely high volume of inquiries, no exceptions are allowed, so please respect our request.
When is this exception available?
This exception is available in the below situations.
- You purchased a property in 2022 and the property manager is requesting an ITIN. We know that the 2022 tax return can be filed in 2023 only. If you are applying for an ITIN in 2022, this exception is available for you.
- You opened a bank account and the interest is being paid out to you. Your bank requested this letter. In order to use this option, you must be a “resident alien” for U.S. tax purposes. If you are a non-resident, you cannot use this option.
- If a U.S. company has to pay a dividend to you and needs to withhold taxes from that payment, the withholding agent will issue this letter.
- For partners in U.S. partnerships, the exception is the same, however, the document requirements are different.
When is this exception or any other exception not available?
Please note in the below situations, we cannot accept your application or help you with the ITIN application:
- You purchased a property in the U.S., and you don’t have rental income. You have rental income from that property but nobody is withholding taxes or able to issue that letter.
- You opened a bank account and you are a “non-resident alien” for U.S. tax purposes. If you are planning to open a bank account and the bank is asking for ITIN, the exception is still not available to you.
- You want to open and start a business in the U.S. That is not a valid reason, please get an EIN for your business.
How to Apply?
Please use the below link to request an appointment.