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FAQ > How Does an Outside Person Receiving Rental Income Need an ITIN?

Anyone who receives rental income from U.S.-based property must report this income to the IRS. If you are not a citizen, you must report this income using Form 1040NR, Nonresident Alien U.S. Tax Return. This will be necessary to obtain an ITIN (Individual Taxpayer Identification Number) if you do not already have one.

The tax treatment of rental income

Income earned by a nonresident alien is classified by the IRS as connected or not connected to a U.S. business. The latter category is taxed at a flat rate of 30 per cent. However, the IRS allows ITIN holders to automatically classify their real estate in the 'connected' category, allowing them to benefit from tax rates graduated on the basis of net income.

Purpose of the ITIN

The ITIN operates as a Social Security number for tax identification purposes. It's a nine-digit number that starts with the number nine. If you earn income in the U.S., you are required to fill out the application form for an ITIN if:

  • You are a non-resident alien.
  • You are a resident alien.
  • You are a dependent or spouse of a foreign resident, nonresident alien, or visa holder.
  • You are not eligible to apply for a social security number.

It is also important to review ITIN exceptions before applying for a tax identification number to make sure you meet the requirements.

Get an ITIN

ITIN W7 document preparation makes it easy to get the ITIN number online. Our service will guide you through the ITIN number form and help you make the selections that suit your specific situation. Once you complete your W7 form to apply for an ITIN number, you can connect directly to Form 1040R to successfully report your rental income. We offer assistance in Spanish and English and with a customer service team that can help you via email or chat.


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