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ITIN Number Canada: What is ITIN?

As a Canadian who needs to file a U.S. tax return, the IRS (U.S. Internal Revenue Service) requires that you have an ITIN (Individual Taxpayer Identification Number). 

What is an IRS ITIN Number?

An ITIN is a tax processing number issued by the IRS to Canadians, and other U.S. non-residents, who:

  • Do not possess a U.S. social security number.
  • Do not meet the eligibility requirements to obtain the number.

Please note: An ITIN is required solely for the purpose of filing a U.S. Federal Tax Return. If you are a Canadian applying for employment or seeking licensing in the U.S. and do not have any U.S. income, you do not qualify for an ITIN.

There are a number of circumstances that require you to file to file a U.S. tax return:

1 The Sale of Your U.S. Property

Prior to 1981, Canadians were generally exempt from paying U.S. taxes on the gains from the disposition of investments in U.S. properties. A disposition, according to the IRS, “includes but is not limited to a sale or exchange, liquidation, redemption, gift, transfers, etc.”

To ensure that U.S. non-residents paid taxes on these dispositions just as U.S. citizens were required to do, the U.S. government enacted the Foreign Investment in Real Property Tax Act (FIRPTA).

FIRPTA applies to the sale of any U.S. real estate, including vacation property. There are a number of rules that must be followed when dealing with the sale of real estate. For details about these rules, see our FIRPTA Guide.  

Under FIRPTA, the IRS has the authority to withhold tax from non-residents when they dispose of U.S. property. There are, however, some situations that are eligible for a reduction, or complete exemption, of the withholding tax on the sale. See FIRPTA: Section 1445 – Withholdings & Exemptions for details.

2 U.S. Employment Income

You are required to file a U.S. tax return if you were employed by a U.S. business or educational institution.

3 U.S. Business Income

Some examples include:

  • Income from the performance of any personal service in the U.S., unless the amount is under $3,000 and you spent fewer than 90 days during the year in the U.S.
  • Income from ownership of a U.S. business or partnership.
  • Net income, or capital gains on the sale of assets, from your U.S. business.
  • Capital gains from the disposition of your U.S. business’ real property.
  • Income from the rental of U.S. real property.

4 U.S. Real Estate Rental Income

Rental income from a U.S. residential property that you owned and rented during the year.

5 U.S. Royalties

Some examples include musical performances, authoring books, franchising, or mineral royalties. There are some reductions or exemptions from paying U.S. tax on these royalties.

6 Lottery, Gambling, or Prize Winnings

In Canada these winnings aren’t taxable regardless of where you win them. In the U.S. though, a 30% tax will be withheld on winnings from U.S. sources. Learn more about lottery, gambling, or prize winnings.

Do You Have an Old ITIN?

You will need to apply for a renewal of your ITIN if:

  • You haven’t filed a U.S. federal tax return in the previous three taxation years.
  • Your ITIN is dated if you received it from 1996 to 2012 and it contains certain middle digits.

ITIN vs EIN: What’s the Difference?

This is a commonly asked question with a very simple answer:

  • An ITIN is the number for use by U.S. non-citizens/non-residents to file their personal federal tax returns.
  • An EIN (Employer Identification Number) is the number for use by U.S. businesses for their U.S. federal corporate tax returns.

You may require both ITIN and EIN numbers if you own a business in the U.S.

How Much Does it Cost to Get an ITIN?

The IRS does not charge a fee for an ITIN application.

Our ITIN application and identity verification service is affordable: $350 plus GST/HST per applicant, plus overnight courier costs to deliver your application to the IRS.

An ITIN Application is Less Than Straightforward

While it may sound like a simple process, applications are sometimes rejected by the IRS for incomplete or inaccurate submissions, or invalid documents. This can cause long delays that could lead to filing your tax returns late and incurring late filing penalties and interest.

See ITIN Application & Form W-7 Instructions for complete details.

ITIN Number Renewal

To renew an ITIN, submit Form W-7 along with your U.S. federal tax return and supporting identification documents. You are also required to provide the reason for applying for a renewal.

Why take any chances? As an IRS Certified Acceptance Agent, we’ve helped many people just like you obtain an ITIN number so they can achieve their goals.

We will save you:

  • The time it takes for the IRS to receive and process your application by mail. There is also a risk of your documents being lost, whereas we are authorized to authenticate the documents in person or virtually.
  • The inconvenience of making an in-person visit to an IRS Taxpayer Assistance Center.

Take the Worries Out of ITIN

Our services can be provided in person or virtually through our two offices, located in Calgary and Toronto. Contact us to start the process!