ITIN vs. SSN: What's the Difference?

7 MIN READ

There are countless requirements to consider when it comes to settling in another country, and few are more important than identification. Without this, you’ll struggle to achieve even basic lifestyle requirements, including, most importantly, your work and taxes as a foreign national. Even securing your living situation would become a challenge if you didn’t take care of this.

When attempting to settle in the US, two primary forms of ID will likely be relevant to you to safely get on a company payroll without dealing with non-resident alien problems - social security numbers (SSNs) and your individual taxpayer identification number (ITIN number). But, you may not understand from the outset which is most relevant to you.

From a distance, both IDs can seem relatively similar, but the best way to determine which you need is to delve into the ins and outs of each. That's why we’re going to compare ITIN vs SSN so that you don’t have to.

What is a Social Security Number (SSN)?

Social security numbers are the most well known of these two ID forms, so it makes sense to start with. First introduced back in 1936 and issued in 1972, an SSN is a nine-digit number issued to either US citizens or permanent residents holding green cards, student visas, and more. It's sort of like a national ID number.

Given that it represents an individual's legal immigration status for a permanent resident, this number alone makes it easier to carry out essential daily tasks, including opening a bank account, building credit, and filing medical forms.

A valid SSN also ensures eligibility for retirement benefits later on. Perhaps the only lifestyle-related application that doesn’t require an SSN is a credit card application, though even this is guaranteed to prove much easier with a valid social security number and credit file behind you.

SSN numbers go along with the taxpayer ID number, federal income tax forms, the EIN Number (Employer ID or Employer Identification number), and many other forms of federal tax identification number documents when trying to apply for jobs, filling out a state tax filing or federal tax return, and more.

Something interesting to note is that SSNs are the only form of identification given by the social security administration (SSA). The IRS provides other types of TIN numbers, like a federal tax id number.

The SSN Application Process

While US citizens are automatically granted a social security number at birth, those settling in the country are required to apply for a social security card for free using Form SS-5, which is available from any local social security office.

Given that residency is a requirement here, it is typically necessary to wait for a minimum of 10 days after arrival before applying for an SSN to simplify the verification process. You will also be asked to provide in-person, proof of your valid resident status including:

Two original documents proving identity (passport, birth certificate, etc.)
Current US immigration documents (Form I-551, Form I-94, work permit, etc.)
Proof of age

What is an IRS Individual Taxpayer Identification Number (ITIN)?

Individual taxpayer identification numbers (ITINs) were first introduced by the Internal Revenue Service (IRS) back in 1996, and are primarily intended to help foreign nationals who, for whatever reason, don’t qualify for a social security number. An ITIN is not proof of residency, nor does it mean individuals can work or claim social security benefits. Instead, this identification can only really help individuals to file their taxes if they’re earning in the US, and also provides an opportunity to open a bank account.

Still, these can prove fundamental for staying on the right side of US law, especially if you do intend to earn money within the country. Even as non-resident aliens, you are, after all, required to pay taxes within allotted time slots like everyone else.

Eligibility for an ITIN is not as strict as that of social security requirements, and you may be able to apply if you are:

Any nonresident with a US source of income
The spouse of someone living in the US on a temporary visa if you, too, want to access the country
Any US resident who does not meet the requirements for a social security number

Like an SSN, an ITIN, or Individual Tax ID number, is an important number to have when it comes time to file a tax return. It is important to have your ITIN valid for taxpayers dealing with a taxable income tax return document. You do not need to have an ITIN number present for becoming the sole proprietor of a business, since business tax federal tax returns do not require it. This is similar to not needing an SSN for sole proprietorship of a business.

One drawback of an ITIN is that you will not be able to get some tax credit help, so while SSN holders are exempt from the full force of taxes, the IRS is not withholding much towards ITIN holders. Find more on the IRS website.

The ITIN Application Process

Applications for ITINs must be completed by the due date of the tax return, so applying as soon as possible is fundamental for due legal processes. Applicants must complete the IRS Form W-7. They can then mail this to either the address shown on the form, present it at an IRS walk-in office, or use an authorized acceptance agent, which could include colleges and financial institutions.

Required documents must be presented with the form itself, and include a valid passport, a birth certificate, and more. Do note that if you have a social security application pending, applying for an ITIN is unnecessary, as no one can hold both of these identification forms at once. Once approved for an ITIN, regular use is also vital, or revalidation may become necessary after three years of non-use.

ITIN vs SSN: What’s the Real Difference

Now that we understand the intricacies of ITINs and SSNs, it’s time to get the heart of the matter - what’s the real difference between the two?

Ultimately, looking at each option separately reveals their differences unclearly, but to simplify the problem, the main variations between these forms of identification include the following.

Residency Requirements

Only US residents are eligible for SSNs, meaning that a green card or valid visa is relevant for anyone attempting to apply here. By comparison, ITINs are in place for individuals and nonresidents who fail to qualify for those stringent SSN requirements, including those with foreign status who do business in the US in some capacity.

Application for an SSN largely relies on in-person proof of identification and eligibility, while ITIN applications are relatively more straightforward.

Use Cases

SSNs can be used for a wide range of purposes, from bank accounts, right through to medical services, and beyond. By comparison, the use cases for ITINs are far more limited, with even accepted holders generally only able to file taxes, open bank accounts, and apply for a driver's license in some rare cases.

Timeframes for Application

The time frames for application between these two identification forms also vary a fair amount. Individuals seeking an SSN must wait at least ten days to prove their residency/situation, while the need to file before the date of tax return means that fast action is fundamental where ITIN applications are concerned.

How Do You Know Which is Right for You?

Ultimately, this all comes down to which identification form is right for you and your US journey. Given that SSNs grant more absolute ease of use across the board, these are the first option for many. but note that stringent requirements may prevent this from being an option in your case. Primarily, then, understanding whether to apply for an SSN or an ITIN comes down to -

Your US residency status
The intended length of your stay
The identification you’re able to supply
Your purposes for application (residency, business purposes, etc.)

Consider each of these points wisely, and be sure that you’re clear on whether an ITIN or SSN would best serve your purposes before you go ahead with applying for either. One thing’s sure, with the application only possible for one identification at a time, one wrong move could prove a drastic setback in your residency journey!

An ITIN vs SSN Comparison

Identification and the role it plays for noncitizens have become increasingly fundamental due to law changes surrounding citizenship in recent years. Differences aside, ITINs and SSNs alike both play vital roles in helping you to settle into a legal US lifestyle and should be a pressing priority from the moment you arrive in the country.

If you’re in any doubt about the correct options for your needs, don’t hesitate to seek the information necessary to get this right every time. Whatever you do, don’t put off this crucial decision any longer than you need to. Doing so could leave you on the wrong side of the law, and thus compromise your ability to remain in the country for good.

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