An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who are not U.S. citizens and are not eligible for a Social Security Number (SSN) but are required to comply with U.S. tax reporting obligations.
Put simply, if a person has economic activity in the United States but does not have an SSN, they will likely need an ITIN
Why do Israelis typically need an ITIN?
Israeli residents may need an ITIN in a number of situations. For example, a person who is not a U.S. resident but is required to file a U.S. federal tax return or wishes to claim benefits under a tax treaty will need an ITIN. This may also apply to a resident alien for U.S. tax purposes who is required to file a U.S. federal tax return.
In addition, a nonresident alien working as a student, professor, or researcher and filing a tax return may also need an ITIN. The spouse or dependent of a U.S. citizen or a resident alien for U.S. tax purposes may also be required to obtain an ITIN. The same applies to the spouse or dependent of a nonresident alien who holds a U.S. visa.
Accordingly, whether it is an Israeli investor holding U.S. real estate or an Israeli individual with an ownership interest in a U.S. limited liability company (LLC), obtaining an ITIN is often essential for proper U.S. tax reporting. In such cases, an ITIN is required to report rental income or other U.S.-source income, file returns, and avoid withholding tax at a higher-than-required rate. Without a valid ITIN, taxpayers may face difficulties, delays, or withholding tax at a high default rate.
Who is eligible to apply for an ITIN?
Depending on immigration status, a person may still apply for an ITIN if they fall within the category of a resident alien for U.S. tax purposes or a nonresident alien, or if they are the spouse or dependent of such a person. For U.S. federal tax purposes, anyone who is not a U.S. citizen is classified either as a resident alien for tax purposes or as a nonresident alien.
A person will be considered a resident alien for U.S. tax purposes if they were lawfully admitted for permanent residence in the United States under the Green Card test, or if they meet the substantial presence test, which is based on the number of days physically present in the United States during the current year and the two preceding years, in accordance with the applicable day-counting rules under IRS guidance. If neither the Green Card test nor the substantial presence test is met, the person will generally be treated as a non-resident alien.
It should be noted that special day-counting rules apply to representatives of foreign governments, teachers, trainees, and students temporarily present in the United States under certain visa categories.
What are the limitations of ITIN?
The IRS issues an ITIN solely for federal tax administration purposes. It is important to understand that obtaining an ITIN does not create eligibility for an SSN or for the Earned Income Tax Credit (EITC). It also does not grant or change immigration status and does not constitute authorization to work in the United States. In addition, an ITIN cannot be used as identification for any purpose outside the federal tax system.
How do you apply for ITIN?
Individuals seeking to obtain an ITIN must complete Form W-7. The form must be filed together with a U.S. federal tax return, such as Form 1040 or Form 1040-NR, with the SSN field left blank. Each applicant, including a spouse or dependent, must file a separate Form W-7. The application must also include documents verifying the applicant’s identity and foreign status, and in relevant cases, documents showing the U.S. residency of a dependent who meets the applicable requirements.
When should you apply for ITIN?
As a general rule, an application for an ITIN should be filed no later than the filing deadline for the relevant U.S. tax return, together with that return, rather than as a separate submission. This is the most common timing for an initial application, since the IRS generally processes Form W-7 and the attached tax return together. If additional time is needed to prepare the return, an extension may be requested. The need to obtain an ITIN should be assessed sufficiently in advance to avoid unnecessary delays in filing and processing.
That said, it is not always necessary to apply for an ITIN only when filing the first tax return. In certain cases, it may be appropriate, and even strategically preferable, to apply earlier, including before the first filing deadline arrives, if the applicant falls within one of the exceptions to the tax return filing requirement or if the number is needed in connection with ongoing U.S. tax reporting and withholding obligations. This may arise, for example, when a person becomes a partner in a U.S. partnership, owns U.S. real estate, or receives U.S.-source income that may be subject to withholding, reporting, or other compliance requirements.
Timing is especially important, because obtaining an ITIN in advance may help prevent administrative complications, filing delays, and excess withholding tax. In many cross-border situations, a valid ITIN is required to properly file a U.S. tax return, claim treaty benefits or deductions, or request a refund of overwithheld tax. An application for an ITIN may also be filed at any time in connection with a tax return for a prior year, provided the applicable requirements are met.
From a practical perspective, the appropriate timing should be evaluated based on the individual’s specific tax position, the nature of the relevant income or investment, and whether immediate reporting or withholding obligations are expected.
TaxLink – Our Story
TaxLink is a certified public accounting firm with a team of professionals specializing in Israeli and U.S. taxation. Our practical experience working with the IRS and the Israel Tax Authority, together with our deep familiarity with the interaction between the two systems, enables us to build a solution tailored to your situation from end to end.
Most clients who contact us do so because they are required to file in the United States – whether it is a Form 1040, Foreign Account Tax Compliance Act (FATCA) reporting, Report of Foreign Bank and Financial Accounts (FBAR) reporting, or a U.S. investment/real estate asset. We manage the process as one integrated engagement in order to reduce errors, minimize duplication, and help prevent double taxation – all within the framework of the law and the treaty between Israel and the United States, and in accordance with your specific circumstances.
Frequently Asked Questions
What is an ITIN and who needs one?
An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS) for individuals who cannot obtain a Social Security Number (SSN) but are required to comply with their U.S. tax obligations, including filing tax returns and claiming benefits under a tax treaty.
Who is eligible to apply for an ITIN?
An application for an Individual Taxpayer Identification Number (ITIN) may be submitted by resident aliens for tax purposes, nonresident aliens, and their spouses and dependents, who are required to file U.S. tax returns or are eligible for certain tax benefits, regardless of their immigration status.
Can you apply for an ITIN without filing a U.S. tax return?
Yes, in limited cases. As of 2026, the IRS permits certain exceptions under which Form W-7 may be filed without attaching a tax return, provided that the required supporting documentation is included.
