EIN

ITIN Exceptions

ITIN Exceptions

An ITIN is a requirement for tax purposes which does not change your immigration status or your working rights in the USA. In the cases of federal income tax return, an ITIN application is generally necessary. However, there are some exceptions.

Exception 1.

Third Party Withholding on Passive Income

  • If you are a partner of a US or foreign company that invests in the United States and gets partnership income
  • During the current tax year of income, people who are receiving distributions such as rental income, pensions, annuity income, dividends, royalties etc.
  • People who have opened an interest-bearing bank deposit account generating income efficiently linked to their US business or trade and is subject to IRS reporting and federal tax withholding
  • “Resident aliens” for tax purposes and have opened an interest-bearing bank deposit account generating income subject to IRS reporting and federal tax withholding

Exception 2.

Other Incomes

People who claim the benefits of a US tax treaty and receive any of the following below:

  • Salary, wages, compensation, Honoraria payments and submitting Form 8233 to the withholding agent is necessary
  • Fellowships, scholarships and grants and submitting Form W-8BEN to the withholding agent is necessary
  • Gambling income

Exception 3.

Third-Party Reporting of Mortgage Interest

People with a home mortgage loan on real property located in the US are eligible to claim Exception 3.

Exception 4.

Third-Party Withholding—Disposition by a Foreign Person of U.S. Real Property Interest

 If you are a party to a disposition of a United States real property interest by a foreign person, then this exception might apply.

If you are eligible to claim Exception 4,

  • Submitting a completed Form 8288 or Form 8288-A and/or Form 8288-B and a copy of the real estate sales contract are necessary

Exception 5.

Reporting Obligations under TD (Treasury Decision) 9363

If you have the IRS reporting obligation under TD 9363 then this exception might apply. If you are an eligible to claim Exception 5, you must submit Form W-7 and Form 13350.

For further questions about ITIN, please do not hesitate to contact us!

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