SSN or ITIN Tax Number – What’s the Difference?

In 2014, the Internal Revenue Service (IRS) made an announcement for US taxpayers. According to which, if you do not use your Individual Taxpayer Identification Number (ITIN) on an income tax return for five successive years, it will expire. Does this mean that a Social Security Number (SSN) will also lose its effectiveness after a few years if not in use? To get the answer, first, you need to know more about these numbers.

US government issues social security and individual taxpayer identification numbers to people living in the country for federal tax return purposes. It is important to note that an individual cannot have both numbers at the same time. Although these numbers have some common properties, they are different in many ways.

Social Security Number

To properly file and pay income tax, a social security number is issued to US citizens and those non-resident aliens who have proper working visas.

Individual Taxpayer Identification Number

All those people, who study or work in the US and are identified as non-residents, have a visit or “B” visa; which does not meet the requirements necessary to obtain a SSN. Thus, to ensure that such tax payers were not exempted from the legal system, the government introduced an ITIN for them.

People often confuse SSN with ITIN as both numbers serve the same purpose apparently. They also look similar because both the numbers have 9 digits with the same pattern being xxx-xx-xxx.

How Do these numbers Differ?

If you tend to use a SSN or an ITIN, you need to know the difference between them.

By law, an identification number is a pre-requisite to file any taxes. In 1936, US government issued SSN to its citizens and permanent residents for this purpose. Later in the year 1996, ITINs were introduced to fulfill the needs of non-resident taxpayers so that they could also effectively file their tax returns.

There is a difference in authorities that issue these numbers. Internal Revenue Service is authorized to issue individual taxpayer identification numbers while a social security number is issued by the Social Security Administration (SSA). You can only use the former for tax purposes; as it is not a valid form of identification. On the other hand, a SSN serves as a legal verification of your identity in a number of cases.

When you apply for a SSN, a Social Security Card is issued to you by the SSA that contains a 9 digit number. For the sake of differentiation, the Internal Revenue Service issues a letter instead of card having a same 9 digit number but with a difference. An ITIN always starts with the number 9 and has a 7 or an 8 at the fourth position.

To get your individual taxpayer identification number, you must obtain a W-7 form issued by the IRS. This form requires you to submit your documents that substantiate your status and true identity. For an SSN, the application form, Form SS-5, can be obtained from the SSA office.

So, under the new policy made by the IRS, only the taxpayers who use ITIN for their federal tax returns must file a tax within every five years to retain their numbers. If you use SSN for this purpose, you don’t need to worry about its expiry.

If you want to apply for an, Individual Taxpayer Identification Number, or ITIN tax number and have any other questions, please feel free to contact us at 888-509-3616. If you have any suggestions please share those with us as well. Freedomtax ITIN Number has a professional team of IRS Certifying Acceptance Agents, and tax accounting professionals with more than 16 years of experience, helping immigrants with their ITIN application. Freedomtax can also help immigrant entrepreneurs incorporate a business in the USA. Freedomtax ITIN Tax Number Online services provides Quality, Professional Service with a Family Feel.