Banking and Finance

ITIN vs. SSN: What's the Difference?

July 27, 2021

Recent reports show nearly 50 million immigrants living in the United States. Based on our previous article about social security numbers and who is eligible to get one, you’ll know that that means that there are likely quite a few people in the country who might not qualify for a SSN.

If that’s you then don’t worry; you’ve got other options! You can often show your Resident Alien Card as proof of identity, and an ITIN, or Individual Taxpayer Identification Number, is also a very valid proof of identity. In fact, if you’re not a US citizen but are a legal resident who pays taxes, you’ll likely already have an ITIN.

Here are the main differences when it comes to ITIN vs. SSN, along with guidance regarding which one makes more sense for you given your current immigration status in the US.

What is an ITIN?

ITIN stands for Individual Taxpayer Identification Number, and they’re issued by the Internal Revenue Service (IRS). Note that this is different from a SSN, which is issued by the Social Security Administration.

 ITINs are used for tax purposes, and ITINs offer tax benefits like the ability to file taxes without needing a social security number. That’s a huge plus for immigrants and, in some cases, international students.

ITINS allow self-employed people to open bank accounts that don’t have access to a SSN or an employer who can back them. ITINs also help people who are interested in opening a business in the United States find investors. How? They provide foreign investors with an ID number to show their tax status. 

Likewise, ITINs can be used when renting out property and are also helpful in allowing you to open up accounts in banks, mutual funds and brokerages.

What is a SSN?

SSN stands for social security number. SSN stands for social security number and is generally used to show legal status within the United States. Each person in the United States receives a social security number at birth. Or, alternatively, you can apply for a SSN after obtaining US citizenship.

ITINs and SSNs are used for the same purposes. ITINs and SSNs help people file their taxes, open up accounts and move to the US without needing an employer who can back them. They also provide benefits like tax deductions on interest income from investments.

It’s important to note here that ​​you might find some entities that refer to a SSN as a "taxpayer identification number," because it identifies taxpayers on all documents related to taxes. However, this doesn’t mean that it’s the same as an ITIN.

When an ITIN Makes Sense

As mentioned above, each person in the United States receives a social security number at birth. However, ITINs are specifically for people who do not have this number because, in most cases, they aren’t eligible to apply for one.

That being said, though, it doesn’t always make sense to apply for a SSN unless you absolutely have to. ITINs are for taxpayers, so if you’re a legal resident in the US and you have to pay taxes in the US then you’ll absolutely need an ITIN.

This identification number might also make sense for you if you are interested in opening a business in the US, want to open any financial account, or would like to apply for debit or credit cards without a SSN.

When a SSN Makes Sense

It’s not so much that a SSN makes “more sense” in certain circumstances. It’s more so the fact that you will be required to have an SSN in certain circumstances. In fact, according to the IRS, if you’re a US citizen over the age of 18 and you receive income, you have to have an SSN. Not only that, but your employer has to use that SSN to report your income to the IRS for tax and social security-related matters.

Simply put, if you’re going to work in the US, you’ll need a SSN.

ITIN vs. SSN for International Students: Which is Better?

Again, the answer to that question isn’t necessarily about which one is “better,” it’s more so about what you qualify for. As an international student, you likely won’t qualify for a SSN. However, if you do have a job, you can apply for an ITIN so that you can report your taxes to the government. 

The ITIN is for tax reporting purposes, while the SSN is for social security purposes. If you need to pay taxes in the US, then you’ll want an ITIN, but if you want benefits like social security or Medicare, then you’ll want to apply for a SSN. 

The IRS has created a helpful section on their website dedicated solely to ITINs for foreign students. This is the most important section regarding international students and ITINs:

“Generally, aliens who enter the United States in an immigration status which allows them to be employed in the United States under specific circumstances under U.S. immigration law are eligible to apply for a Social Security Number (SSN ) from the Social Security Administration.

Most foreign students and scholars in F-1, J-1, M-1, Q-1, and Q-2 nonimmigrant status are eligible to be employed in the United States, and are therefore eligible to apply for an SSN if they are actually employed in the United States.”

If you meet the requirements and would like to apply for an ITIN, fill out form W-7.

ITIN vs. SSN When Opening a Bank Account

Most banks ask for your SSN when opening a bank account, whether that’s for a debit or credit card. Why? They need to prove your identity in an effort to prevent fraud and terrorism. However, just because that’s the one they typically ask for doesn’t mean it’s the only one they can use.

Most major banks will allow you to open an account with an ITIN. However, if you don’t have that, you might feel like you’re out of luck. Absolutely not! Cheese is here for you. With Cheese, there is no SSN or ITIN required. Plus:

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