Do you need an ITIN number to file your company's taxes in the United States with the IRS?
The ITIN exists for one thing only: to identify you to the IRS when you have a personal tax obligation in the US and cannot have an SSN. It is not required in all cases, it depends on the type of entity, number of partners. Answer a few questions and you will see which scenario is most similar to yours.
Quick comparison by entity type
A general summary. The details depend on each case and on the owner's country.
| Single-member LLC | Multi-member LLC | C Corporation | |
|---|---|---|---|
| Who is the taxpayer? | The owner (the LLC is "disregarded" by the IRS) | The members (taxed as a partnership by default) | The corporation |
| Typical entity filing | Form 5472 + pro forma Form 1120 every year if the owner is foreign | Form 1065 and Schedules K-1 when there is a filing obligation | Form 1120 (with Form 5472 if 25% or more is foreign-owned) |
| Is an ITIN requested? | Only if the owner must file a personal return (1040-NR, or 1040 if a tax resident) | Members often need a TIN for their K-1 or for withholding on effectively connected income | Normally not for the corporation. The shareholder may need one to claim a treaty, recover withholding or if a tax resident |
| Federal tax | Passes through to the owner, and only if there is U.S.-source income | Passes through to the members; there may be withholding on foreign members with effectively connected income | The corporation pays its own tax on its income |
| Penalty for missing forms | Up to $25,000 per missed Form 5472, per year | Depends on the form missed | Up to $25,000 per missed Form 5472 and other Form 1120 penalties |
Glossary
- ITIN
- Individual Taxpayer Identification Number. The IRS issues it to people who must file a personal U.S. tax return and cannot get an SSN. It identifies a person, not a business.
- SSN
- Social Security Number. It is issued to citizens and to eligible noncitizens. If you can get one, you use that number instead of an ITIN.
- EIN
- Employer Identification Number. It identifies the LLC or corporation to the IRS. It does not replace an ITIN, and in most cases it does not require one.
- Disregarded entity
- A single-member LLC that is ignored for federal income tax purposes. The IRS looks to the owner.
- U.S.-source / foreign-source income
- Where income "comes from" under IRS rules. For example, services are normally sourced where they are physically performed, and rent from real estate where the property is located.
- ETOB (U.S. trade or business)
- Regular, considerable and continuous commercial activity in the U.S. If it exists, U.S.-source income tied to it is ECI.
- ECI (effectively connected income)
- Income tied to a trade or business in the U.S. It is reported and taxed on a net basis at graduated rates, normally on Form 1040-NR.
- FDAP
- Fixed, determinable, annual or periodical U.S.-source income that is not ECI (royalties, dividends, certain rents and interest). It usually carries 30% withholding unless a treaty applies.
- Royalty
- A payment for the use of intellectual property: copyrights, patents, licensed software, licensed content. If it is U.S.-source, it is FDAP.
- Withholding
- Tax that the payer holds back and sends to the IRS before paying you. In many cases it satisfies the tax, but you should verify whether you still have to file.
- Form 5472 and pro forma Form 1120
- The annual information return of an LLC with a single foreign owner. It is filed under the LLC's EIN, is mandatory even with no income, and does not by itself create corporate tax.
- Form 1040-NR
- The personal income tax return for nonresidents. It is the form where an ITIN is normally requested.
- Form W-8BEN
- A form a foreign person gives to a payer or platform to certify foreign status and, if applicable, claim a treaty. The foreign owner of a disregarded LLC usually provides their own personal one.
- Tax treaty
- An agreement between two countries that can reduce withholding or avoid double taxation. Not every country has one with the U.S.
- FIRPTA
- Rules that impose withholding when a foreign person sells U.S. real estate.
- Substantial presence
- A test based on days of physical presence in the U.S. over three years. If it is met, the person is a tax resident even without immigration residency.
- Protective filing
- Filing a 1040-NR even if you believe there is no ECI, to protect a position in gray areas. It is a decision for an advisor to make.
Frequently asked questions
Does every LLC need an ITIN?
No. An LLC is identified by its EIN. An ITIN identifies a person and is only needed when that person must file a personal U.S. tax return and cannot get an SSN. An LLC with a single foreign owner and no connected income normally files Form 5472 with the pro forma 1120 using the LLC's EIN.
Do I need an ITIN to get my LLC's EIN?
Not necessarily. The owner does not need an ITIN just to obtain the EIN. Form SS-4 asks for the responsible party's SSN or ITIN, but there are routes for foreigners who have neither. Confirm the current process with your formation provider.
What happens if I do not file Form 5472?
The penalty for not filing, or for filing incomplete or inaccurate information, is $25,000 per form, per year. It is an annual obligation for LLCs with a single foreign owner, even with no sales.
Do Form 5472 and the pro forma 1120 create tax?
Not by themselves. The pro forma 1120 is a vehicle for filing the information. Any tax depends on whether there is U.S.-source or connected income, and it is analyzed at the owner level.
What is effectively connected income (ECI) in simple terms?
It is income that comes from a regular business activity in the U.S., for example with inventory, employees, an office or a physical business there. If there is ECI, the foreign owner normally files a 1040-NR and needs a personal identification number.
My clients are in the U.S. but I work from my own country. Is that U.S. income?
In general, the source of a service is the place where it is performed. If the owner performs it while physically outside the U.S., the income is usually foreign-source even if the client is in the U.S. That changes if the owner travels there to work, or if there are staff or an office in the U.S.
How are royalties treated?
U.S.-source royalties paid to a foreigner usually carry 30% withholding, unless a treaty applies. If the withholding covers the tax, you often do not have to file a personal return, but there are exceptions. An ITIN mainly comes up if you claim a treaty, recover withholding, or nobody withheld and you have to file. Consult a CPA.
Does my country have a treaty with the U.S.?
It depends on the country. Check the IRS treaty table. As an example, Colombia does not have an income tax treaty in force with the U.S., so there are no reduced treaty rates.
How long does an ITIN take, and when does it expire?
The application (Form W-7) is normally submitted with the tax return and can take several weeks. An ITIN can expire if it is not used on a tax return for three consecutive years.
I live in the U.S. and do not have an SSN. What changes?
For tax purposes, residency depends on physical presence, not on immigration status. A tax resident reports worldwide income on Form 1040 and needs an SSN or an ITIN. This guide is not immigration advice; consult a CPA or an attorney.
General educational information. It is not legal, tax or immigration advice and does not create a professional relationship. Rules change, and the outcome depends on the facts of each case, the owner's country and applicable treaties. Before making decisions, consult a CPA or attorney experienced with nonresident clients. Last reviewed: .