Instructions to Apply for an ITIN

DISCLAIMER: Paradise Media Group and its affiliates. partners, staff, or parent companies do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

By continuing to use this page, you agree to release us from any and all liability relating to any and all information provided on this page.

2022 1040NR / W-7 ITIN Application Guide Gambling Income Method

The purpose of this is to provide a step-by-step guide for Canadians to obtain an ITIN so that they can apply for US credit cards and take advantage of US credit card signup bonuses. This is a method that should apply to most Canadians. 

Follow this guide at your own risk. Churningcanada.ca, or u/PM_ME_UR_FAXES is not qualified to give you US tax advice. The process is easy enough that anyone can follow along. 

Notice about Paid Services

Paid services are available, but they are not necessary as the forms are simple to complete. I do not endorse any specific service. If you choose to use a paid service, ensure that their PTIN and full name are disclosed on any 1040NR form you file.

The preparation of a tax return for compensation, including the 1040NR non-resident tax return discussed below, requires that the preparer be registered with the IRS, and the preparer must include the PTIN and their personal information (including their name) on the second page of the 1040NR under "Paid Preparer Use Only", irrespective of the method of submission. If you pay for a service that prepares for you an 1040NR (including a "draft" of such a return), and fails to disclose their PTIN on the documents you file, that preparer may be subject to IRC 6695 penalties, injunction and/or disciplinary action.

If you are using a paid service always ensure that their PTIN and full name are disclosed on any 1040NR you file. It protects you too, as they can be penalized by the IRS for unauthorized disclosure or use of your personal information.

Big Picture: How it Works

There are very specific reason where the IRS will issue an ITIN. These include to obtain tax treaty benefits, to file a tax return, and more. Throughout the years, administrative efficiency has taken away the need to issue an ITIN for the purposes of obtaining a tax treaty benefit. So if you have been reading about obtaining an ITIN by saying "I need an ITIN to reduce my withholding tax with Amazon/Smashwords", this no longer works, it is not worth your time to try.

Instead, the ITIN can be obtained by filing a tax return declaring some amount of U.S. income, which I will share with you upfront, although paid ITIN services will skirt around informing you of this directly. The fact that you haven't actually earned anything is irrelevant here (unless you don't want an ITIN lol). The self-declared income can be sourced from US-based online casinos, so you don't even need to set foot in the USA to claim US-source gambling income.

Think of it as "I have $85 USD of gambling/interest income sourced from the USA (e.g. gambling: specifically from blackjack, baccarat, craps, roulette, or big-6 wheel; interest: interest from a US source), and I'm an upstanding person so I need to report it to the IRS".

This guide will use gambling income, but it only takes minor changes if you want to report interest income instead on your 1040NR instead.

This is a method that should apply to most Canadians.

Who it won't work for:

  • People eligible for a SSN (are eligible to work in the USA and don't need an ITIN)

  • People who already have an ITIN

  • People who have other sources of US-source income (get professional tax help)

What you'll need to prepare the forms:

  • Download the following forms

  • W-7 Form (reading the instructions is helpful)

  • 1040NR Form

  • Supplementary forms and schedules to the 1040NR: Schedule 1 and Schedule OI

  • Proof of identity, Canadian passport preferred, see below

  • A listing of dates you were physically present in the USA for, for the year you are filing for (currently 2021 tax year) - it's ok if this is zero.

  • Number of days in USA for each of the three previous years (2019, 2020, 2021)

  • Your Social Insurance Number (Canada)

  • The ability to pay <$10 USD of taxes to the IRS

What you don't need:

  • Proof of gambling income - you are self-declaring gambling income

  • To step foot in the USA during the year you are filing - you are self-declaring gambling income from an online US-based casino

Preparing proof of identity:

Four choices:

Completing the W-7 (Rev Aug. 2019) - IRS instructions are here, particularly Page 8 "Line Instructions":

  • At the top right of the form, select Apply for a New ITIN

  • Under Reason you’re submitting Form W-7., check b

  • Complete the Name section, must match your passport

  • Complete Mailing Address: Foreign is okay - IRS will return your documents here

  • Complete Foreign (non-U.S.) Address: Yes, you need to write it out again even if it's the same as Mailing Address

  • Birth Information: Complete. If your birth country is not recognized as one by the USA, you will need to fill in a country recognized by the USA.

  • Countries of Citizenship: You need to enter all the countries you have citizenship in 6a

  • Foreign Tax I.D. Number: You MUST enter your Canadian Social Insurance Number in 6b

  • Type of U.S. Visa: Leave blank. If you have a US Visa (e.g. F-1, TN or H1-B) and are physically working in the USA, do not use this guide. If you have a temporary visa, you can choose to enter it here (see my comments)

  • Identification Document Submitted: Check Passport, enter Canada, your Passport Number and the expiry date, leave blank date of entry

  • 6e: No

  • 6f: leave blank

  • 6g: leave blank

  • Sign Here: Sign in ink and enter the date and your phone number (CA # is fine). Do not use digital signatures or photocopies.

  • Acceptance Agent's Use ONLY: Do not complete

2022 Form 1040NR:

  • Filing status: Single, Married filing separately or Qualifying Widower (widowed within last two calendar years, and have a dependent)

  • Name: Must match W-7

  • Identifying number - leave blank

  • Complete preferred foreign mailing address

  • Virtual currency: This is about cryptocurrency and is explained on Pg 17 of the 2021 1040 Instructions, tl;dr just need to put yes/no, don't need to actually report income on return.

  • Dependents: You don't have to claim dependents, just leave it blank

  • Line 8: Enter that magical number greater than $75 and less than $100 that you're claiming as your gambling income

  • Line 9: Same as Line 8

  • Line 11: Same as Line 8

  • Line 15: Same as Line 8

  • Line 16: If your number that you picked above was >=75 and <100, then enter 9 (for 2020), otherwise consult Page 3 of the Tax Table

  • Line 18: Enter the same amount as Line 16

  • Line 22: Enter the same amount as Line 16

  • Line 24: Enter the same amount as Line 16

  • Line 26: 0 (Zero)

  • Line 32: 0 (Zero)

  • Line 33: 0 (Zero)

  • Line 37: Same as Line 16

  • Line 38: Your income is less than $1,000, therefore you should not owe a penalty according to Form 2210 (if you do, the IRS will write you a letter)

  • Third Party Designee check no, unless you are doing this for P2/3... and want to.

  • Sign Here: Sign in ink, date and enter your occupation. Do NOT use a digital signature or photocopies of a signature. Phone and email are optional. Leave PIN blank.

  • Paid Preparer Use Only: Leave blank

Schedule OI:

  • Name at the very top of page

  • A: What country you were a citizen or national during the tax year (legal immigration status)

  • B: What country were you a tax resident of during the year: if you live and work in Canada, it is probably Canada only

  • C, D, expected to be no

  • E: Write "Not present in U.S.—No U.S. immigration status" into the line, unless you were physically present in the USA on Dec 31

  • F: No

  • G: List all dates you entered and left the USA in 2022 (this includes layovers), only applicable if you were in the USA. This site has been suggested for checking your travel records: https://i94.cbp.dhs.gov/I94/#/home

  • H: Number of days that you were present in each of 2020, 2021 and 2022 (partial days count as a full day) - note that you should get professional tax help if (Days in 2022) x1 + (Days in 2021) x1/3 + (Days in 2020) x1/6 >= 183, since you meet the Substantial Presence Test

  • I, J, K: expected to be no, leave the second Yes/No for both J and K blank

  • L: Leave blank

  • M: Leave blank

You're Done

You can mail your form in, or you can book an appointment at an IRS Taxpayer Assistance Center

Mailing instructions:

Mail W-7, 1040NR, Schedule 1, Schedule OI and proof of identity (e.g. passport or certified true copy of passport) to:

Internal Revenue Service

ITIN Operation

P.O. Box 149342

Austin, TX 78714-9342

USA

Suggested method is via registered mail with Canada Post (~$15), for proof of delivery and tracking. Hope you get something good in the mail in 1.5 months.

IRS Taxpayer Assistance Center - In-Person Appointment

You can submit your forms in-person at an IRS Taxpayer Assistance Center (TAC), located across the USA and available by appointment only during normal business hours. Applying at a TAC saves you from having to mail in your original passport or paying for a certified true copy of your passport.

Call 844-545-5640 to schedule an appointment in advance, up to 2 months before, you will need one appointment per person, even if they are your spouse. Some people have reported difficulty calling from a Canadian phone number, and have been able to obtain success using a VoiP to make the appointment. Others have also reported success from calling 267-941-1000 (not a toll-free number) and letting the phone agent transfer you to the proper line. If the lines are busy, you will need to keep trying until you get through - I would recommend calling with a couple different phones until you get through.

You will need to bring your passport, as well as a duplicate copy of your forms so they can stamp them as received. Upon completion, they will inform you that you will receive a letter letting you know of your ITIN application results mailed to your home.

Appointment length differs based on the agent that serves you. There are data points that go from 20 minutes per person up to 1 hour. Some data points indicate that the clerk at the TAC may confuse your application with another reason of registering for an ITIN (e.g. meeting the substantial presence test). Remember that the clerk's role is to make sure your application is complete before submission, and they do not make any determination on your ITIN application. Kindly remind them that the reason you are filing is to file a tax return (the 1040NR) and that you need it submitted to the ITIN group for their consideration.

Payment

Don't forget to pay your US taxes!

Aren't I Late on filing/paying my taxes for 2022?

If you are concerned about filing your 2022 after the April 18, 2023 filing deadline, it appears that the penalty for late filing and late payment cap out at 100% of the tax (e.g. if you had tax of $9 USD, you will owe an additional $9 USD). You will still owe interest on late payment, you can add another $2 or $3 to the amount you owe to cover. 

I lost my ITIN Letter!

If you lose your ITIN or your ITIN letter, you can get the ITIN by calling the IRS at +1 267-941-1000 and provide your name, mailing address, birthdate. You can then request a generic letter with your ITIN to help you with proof of your ITIN.

ITIN Expiry

Your ITIN will expire. I have not seen any evidence of them reassigning an ITIN to someone else yet. To renew your ITIN, file a tax return once every 3 years.

Timeline

Based on current estimates, it will take around 1.5 months, or 6 weeks to see the letter in your mailbox.

This guide was created by u/PM_ME_UR_FAXES on Reddit, and is published with their permission on ChurningCanada.ca.