Written by William R. Hummel, Esq., Partner, N.C. Board Certified Immigration Law Specialist.
Foreign nationals and permanent residents living in the United States are often required to follow the tax laws of the United States, which can cause issues and concerns.
All work-authorized foreign nationals can have a social security number from the Social Security Administration (SSA), while non-work authorized dependents will oftentimes need to obtain an Individual Taxpayer Identification Number (ITIN). Filing taxes with the IRS could also be a new or complicated experience for foreign nationals.
Below is further information for foreign nationals about acquiring a Social Security Number or Individual Taxpayer Identification Number (ITIN), filing taxes with the IRS, and more.
Social security numbers for noncitizens
Foreign nationals with work authorization in the United States and immigrants (green card holders) can obtain a social security number through the Social Security Administration (SSA).
There are two different ways nonimmigrants can apply for a social security number. They are:
- By contacting their local Social Security Administration Office.
- Via the Form I-765, Application for Employment Authorization, if lawfully present in the United States and applying for work authorization from United States Citizenship and Immigration Services (USCIS).
Similarly, green card holders can also apply for an SSN by completing one of the two options listed below:
- By contacting their local Social Security Administration Office.
- In their home country when completing a Department of State application for an immigrant visa. This option eliminates the need for the beneficiary to visit an SSA office once they arrive in the United States, in most cases.
Foreign nationals must provide documentation proving their identity, work authorization, and age in order to receive a social security number. Those documents include:
- Green card, Employment Authorization Document (EAD), the Form I-94, Arrival/Departure Record, or an admission stamp in a visa classification which grants work authorization.
- A foreign birth certificate. If the foreign national does not have that available, they can present a passport or another document from the Department of State or similar agency to prove their age.
Foreign nationals without work authorization in the United States generally cannot receive a social security number. More information on that topic follows in the next section.
Social Security Numbers for dependents and Individual Taxpayer Identification Numbers (ITINs)
As mentioned above, foreign nationals without work authorization are usually ineligible to receive a United States Social Security Number. This can include dependent spouses and children of nonimmigrant visa holders.
Instead, these non-work authorized dependents can receive an Individual Taxpayer Identification Number (ITIN) from the Internal Revenue Service (IRS). The ITIN is a nine-digit number issued “to people filing a tax return who are not U.S. citizens and who do not have or are not eligible for a Social Security number” and can only be used for tax purposes.
Non-work authorized foreign nationals will need to apply for an ITIN if they are required to provide a tax identification number or file a tax return. ITINs can be obtained by completing the W-7, Application for IRS Individual Taxpayer Identification Number or by making an appointment at an IRS Taxpayer Assistance Center or IRS authorized Certifying Acceptance Agent. It could take foreign nationals up to seven weeks to receive their ITIN after completing an application, according to the IRS.
In rare instances, non-work authorized foreign nationals can receive a social security number from the Social Security Administration. In those limited cases, foreign nationals must be required to have a Social Security Number to receive either a federal, state or local benefit or service (though it is important to note this benefit cannot be a driver’s license).
These foreign nationals must also submit proof of identity and age with their application, which could include the Form I-94, Arrival/Departure Record; the Form I-862, Notice to Appear; the Form I-385, Alien Booking Record; or a letter from the Office on Trafficking in Persons or Office of Refugee Resettlements.
Non-work authorized foreign nationals who are required to have a social security number to receive a benefit from a state or local government must also submit a letter from the applicable agency that:
- Identifies them as the applicant.
- Explains the “nonwork” reason the applicant needs an SSN.
- Identifies the specific state or local statute that requires the foreign national to have an SSN.
- Explains that the foreign national has met all other requirements to receive the benefit, other than having an SSN.
- Lists a contact name and number for an individual at the applicable state or local agency.
SAVE
SAVE is an online portal administered by United States Citizenship and Immigration Services (USCIS) which “allows federal, state, and local benefit-granting agencies to verify a benefit applicant’s immigration status or naturalized/derived citizenship.”
The SAVE portal only verifies the immigration or naturalization status of the applicant to the requesting agency. The agency can then use the information from SAVE to make an eligibility determination for the applicable benefit or license.
Agencies submit requests to SAVE after receiving an initial benefit application from a foreign national, green-card holder or naturalized citizen. The institution is required to send SAVE the applicant’s name, date of birth and numeric identifier, which could include:
- An A-Number
- The Form I-94, Arrival/Departure Record
- Student and Exchange Visitor Information System Number
- Foreign passport number
SAVE then informs the requesting agency of the immigration status of the applicant, prompts the agency to “retry initial verification process” or requests additional information.
Applicants have the opportunity to correct or update their immigration information with the Department of Homeland Security, as SAVE does not “correct, renew or replace” records.
There are more than 3,740 benefit-granting agencies that use SAVE, according to its website. Some examples of federal agencies that utilize SAVE include:
- U.S. Department of Health Human Services Centers for Medicare and Medicaid Services
- U.S. Dept. of Agriculture, Rural Development Housing and Community Facilities Program
- Federal Student Aid, U.S. Department of Education
- U.S. Patent and Trademark Office
- U.S. Social Security Administration
Some examples of state and local agencies in North Carolina that verify immigration status with SAVE are:
- North Carolina Department of Commerce, Division of Employment Security
- North Carolina Department of Health and Human Services
- Mecklenburg County Storm Water Services
- North Carolina State Education Assistance Authority
- North Carolina Division of Motor Vehicles
IRS
Many foreign nationals who live and/or work in the United States are subject to tax withholdings in their paychecks. Specifically, foreign nationals are subject to U.S. income tax if they meet either the green card or the substantial presence test designed by the IRS for the calendar year.
All foreign nationals who are lawful permanent residents at any point through the calendar year meet the criteria for the green card test. Generally, this means the individual holds a Form I-551, Permanent Resident Card.
Meanwhile, foreign nationals meet the substantial presence test if:
- They spent at least 31 days in the current calendar year inside the United States
AND
- They spent 183 days inside the United States in the most recent three-year period. Those three years count all of the days the foreign national was present in the current year, 1/3 of the days they were present in the year before the current year, and 1/6 of the days they were present two years before the current calendar year.
Almost all days foreign nationals are present in the United States count towards the substantial presence test requirement except:
- Days they commuted to the United States from Canada or Mexico (if applicable)
- Days they were inside the United States for less than 24 hours.
- Days they are unable to leave the United States “because of a medical condition that develops” while they are inside the country.
- Days they are considered an “exempt person,” which is defined as:
- Teachers or trainees in the United States under a J or Q visa
- Students in the U.S. with an F, J, M or Q visa
- Most individuals representing a foreign government (excluding those with A-3 or G-5 visas)
- Professional athletes inside the United States for a “charitable sports event”
Foreign nationals who meet either of the above criteria (that is the green card test or the physical presence test) are considered “resident aliens” for tax purposes and are generally taxed the same as U.S. citizens. Resident aliens “worldwide income is subject to U.S. tax and must be reported” on their U.S. tax returns, according to the IRS. This is generally true regardless of one’s immigration status in the United States.
Conclusion
Foreign nationals and green card holders living and working in the United States could encounter many tax and social security related issues, including obtaining a Social Security Number or Individual Taxpayer Identification Number (ITIN); encounters with the SAVE portal; and filing taxes with the IRS.
Foreign nationals should consult with experienced immigration counsel to discuss the best strategies for navigating any potential issues or problems. Experienced counsel can then partner or refer to tax attorneys and/or other professionals, as necessary.