During the past months, we received many inquiries about individuals who want to establish retirement accounts, but feel they are unable to do so because they are not eligible to obtain a social security number (SSN). In most cases, these individuals are non resident aliens[1] who inherit retirement assets. This article will help you to understand how your clients may resolve this issue.
Why does Pershing require a tax identification number?
Pershing obtains a tax identification number (TIN) so that we may comply with regulatory requirements, such as the reporting of distributions and contributions for retirement accounts for which we serve as custodian. Individuals who are not eligible to obtain a SSN (the TIN for individuals), may instead use an individual taxpayer identification number (ITIN).
What is an Individual Taxpayer Identification Number (ITIN)?
An ITIN is issued by the Internal Revenue Service (IRS) to individuals who are required to file a U.S. tax return, or to individuals who are listed on a tax return as a spouse or a dependent and the individual is not eligible to receive a SSN. For tax reporting purposes, the ITIN is used in place of a SSN.
How does one obtain an ITIN?
An individual may obtain an ITIN by filing IRS Form W-7. Supporting documentation substantiating foreign/alien status, true identity, and continued existence of the applicant must be submitted along with Form W-7. Acceptable documentation includes foreign passports and foreign national identity cards.
For more information about ITIN, including how to obtain an ITIN abroad, refer to IRS publication 1915, available at www.irs.gov.
The information contained in these materials is believed accurate at the time of writing but is not guaranteed. Pershing accepts no responsibility for its use whether in whole or part.
[1] A non resident alien is an individual who is not a U.S. citizen or an individual who is not a green card holder. The green card indicates that the individual has been granted permanent residency status by the U.S. immigration and naturalization department