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ITIN Exceptions - Exception 1 - Third-Party Withholding on Passive Income


Most ITIN applications require a U.S Federal Tax return attached as part of the W-7 ITIN application process. However there are limited ITIN exceptions where a U.S. Federal Tax return is not required.

If any of the 5 ITIN exceptions apply to you, then you will not need to attach a U.S. Federal Tax return.

Information reporting and/or withholding requirements apply to third parties (frequently banks and other financial institutions) who will request an ITIN to enable them to file information reports that are required by law.

Exception 1 - Third-Party Withholding on Passive Income

1(a) Individuals who are partners of a U.S. or foreign partnership that invests in the United States and that owns assets that generate income subject to IRS information reporting and federal tax withholding requirements; or

To support the claim that you are eligible to use this exception - Submit a copy of the portion of the partnership or LLC agreement displaying the partnership’s employer identification number and showing that you’re a partner in the partnership that is conducting business in the United States.

1(b) Individuals who have opened an interest-bearing bank deposit account that generates income that is effectively connected with their U.S. trade or business and is subject to IRS information reporting and/or federal tax withholding; or

To support the claim that you are eligible to use this exception - Submit a signed letter from the bank on its official letterhead, displaying your name and stating that you’ve opened a business account that is subject to IRS information reporting and/or federal tax withholding on the interest generated during the current tax year

1(c) Individuals who are “resident aliens” for tax purposes and have opened an interest-bearing bank deposit account that generates income subject to IRS information reporting and/or federal tax withholding; or

To support the claim that you are eligible to use this exception - Submit a signed letter from the bank on its official letterhead, displaying your name and stating that you’ve opened an individual deposit account that is subject to IRS information reporting and/or federal tax withholding on the interest generated during the current tax year

1(d) Individuals who are receiving distributions during the current tax year of income such as pensions, annuities, rental income, royalties, dividends, etc., and are required to provide an ITIN to the withholding agent (for example, an investment company, insurance company, or financial institution, etc.) for the purposes of tax withholding and/or reporting requirements

To support the claim that you are eligible to use this exception - Submit a signed letter or document from the withholding agent, on official letterhead, showing your name and verifying that an ITIN is required to make distributions to you during the current tax year that are subject to IRS information reporting and/or federal tax withholding. Self-generated income statements will only be accepted with a copy of the contract or a letter with a postmarked envelope addressed from the withholding agent

Note: Federal tax withholding and/or information reporting must take place within the current tax year.

Do I need an ITIN?

Please refer to our blog post "ITIN Number Application" for further information.

A Certified Acceptance Agent (CAA) can assist you in obtaining the correct TIN.

Just Breve are part of the ITIN Acceptance Agent Program. As a Certifying Acceptance Agent (CAA), we are authorised by the Internal Revenue Service (IRS) to assist alien individuals and other foreign persons with obtaining ITINs from the IRS by validating the person’s foreign status and identity.

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