An ITIN is an Individual Taxpayer Identification Number, for people that don’t qualify for a Social Security Number but still need to file U.S. tax returns or open U.S. bank and investment accounts.
Foreign nationals that have U.S. source income from things like U.S. rental property, U.S. investments or operations of a U.S. business need an ITIN so they can file their U.S. tax returns and pay their U.S. taxes.
Those with U.S. source income that do not meet the residency requirements of the U.S. tax code may need to file a 1040NR tax return for nonresident aliens.
Those meeting the U.S. tax codes residency requirements may be required to file a U.S. tax return reporting their worldwide income. The tax codes residency requirements are not the same as the legal residency requirements for immigration, so one can be a resident for the purpose of U.S. income taxes with our having the status of legal residency.
Note: When applying for legal residency status, failing to have filed and paid U.S. taxes could have a detrimental effect, so be sure to check with a qualified immigration attorney.
So, if you are not eligible for a U.S. Social Security Number and have U.S. Income, are a U.S. Tax Resident, or are a dependent of someone that is a U.S. Tax Resident and are not eligible for a Social Security Number an ITIN might just be the right solution so you can become tax compliant.