This article is written to assist Canadian individuals who may find themselves in a situation where they need to file United States income tax returns. This could be the result of many reasons including; owning and renting property in the U.S., selling vacation property, or receiving investment income etc.

Canadian residents who are required to file, or wish to file a U.S. individual income tax return, must first obtain a U.S. taxpayer identification number, commonly known as an ‘ITIN’ from the Internal Revenue Service (IRS). IRS Form W-7 is used to apply for the ITIN.

U.S. taxpayer identification (ITIN)

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. The IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security number (SSN) from the Social Security Administration (SSA).

Form W-7 is used to apply for the ITIN. Original, valid passports are required to be submitted to the IRS as support for Form W-7.

ITIN’s are normally required to be submitted to the IRS along with Form 1040NR (individual tax return) during tax filing season. However, the IRS does permit a few exceptions wherein the ITIN can be applied for separately, in advance of filing the 1040NR. For example, one of the exceptions includes obtaining an exemption for 30% withholding tax on gross rents from a property management company or tenant. Specific templates and instructions are required to be followed by the IRS for this and other exceptions. Best to review with a tax professional.

ITIN’s are issued by the IRS by way of a letter mailed to the applicant’s address. You will receive a letter from the IRS assigning your tax identification number usually within seven weeks if you qualify for an ITIN and your application is complete. ITINs do expire after three years.

Certified Acceptance Agent

As mentioned previously, in order to apply for an ITIN, an original, valid passport must be submitted to the IRS along with Form W-7. The passports are returned by regular mail. For various reasons, primarily ongoing travel purposes, many people are not able to do without their passports for an extended period of time. The IRS recognizes this, and as an alternative, applicants can use the services of a ‘Certified Acceptance Agent’ to validate the passport and submit the ITIN application. The firm of Edelkoort, Smethurst and Schein offers this service, which allows owners to retain possession of their passports. Passports are reviewed in our offices and returned immediately to the owner. Our firm then prepares Form W-7 along with any other required documents, and submits these to the IRS. Our firm also prepares U.S. and Canadian individual income tax returns – we can handle all of your income tax filing requirements in one stop.

The Certified Acceptance Agent accreditation was awarded to our firm as the result of meeting stringent educational standards and ongoing performance measures. We are pleased to be able to provide this valuable service to our clients. Our firm also prepares U.S. and Canadian individual income tax returns – we can handle all of your income tax filing requirements in one stop.

Please contact our office to schedule an appointment. We look forward to supporting you.

Edelkoort | Smethurst | Schein CPAs LLP is located in Burlington Ontario servicing the Golden Horseshoe and Greater Toronto Area and beyond. The firm is fully licensed with CPA Ontario to provide assurance, tax and accounting services as well as registered as tax preparers with the Canada Revenue Agency (CRA) & Internal Revenue Service (IRS). The firm is also registered as an IRS Certified Acceptance Agent.

All blog posts published on this site are for informational purposes only and do not constitute professional advice. Readers should contact a professional to discuss their individual situation. Neither the author or the accounting firm shall accept any liability for any reliance placed on the information posted.