If you've landed on this article, it's probably because you've asked the question, "Can I put someone on payroll with an ITIN number?"
As a payroll company that specializes in ITINs, we get this question all the time.
We know your time is valuable, so the short answer is... yes.
Baron Payroll isn't a law firm, so we can't offer legal advice, but this is what we've seen and what we know to be true. For over 20 years, Baron Payroll has successfully added ITIN (Individual Taxpayer Identification Number) workers to our clients' payrolls.
And while you can put someone on payroll with an ITIN number for tax reporting purposes, it is crucial to ensure they have proper work authorization in the United States (I-9 Form).
Wondering how much it costs to add your ITIN workers to your payroll? Use our instant pricing calculator to get your estimate without talking with a salesperson.
Still have questions? Read on to learn more about ITINs and payroll.
What is an ITIN?
An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who are required to have a U.S. taxpayer identification number but are not eligible to obtain an SSN. ITINs are primarily used for tax reporting purposes.
Key Differences Between ITIN and SSN
- Purpose: ITINs are solely for tax purposes, while SSNs are used for employment, social security benefits, and other government services.
- Eligibility: ITINs are issued to individuals who are not eligible for an SSN, such as certain nonresident aliens, undocumented immigrants, and others who have federal tax reporting requirements.
- Format: Both ITINs and SSNs are nine digits long, but ITINs always begin with the number 9.
Can You Hire Someone with an ITIN?
Yes, you can hire someone with an ITIN. However, it's important to understand that hiring an individual with an ITIN means you are employing someone who may not have legal authorization to work in the United States (if they haven't filled out the I-9 Form).
Legal Considerations
Baron Payroll isn't a law firm, so we can't offer legal advice, but this is what we've seen and what we know to be true.
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Verification Requirements: An ITIN does not satisfy the employment authorization requirements on Form I-9. Therefore, while an ITIN can be used for tax purposes, it cannot be used to verify work authorization.
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IRS Reporting: If you decide to hire an individual with an ITIN, you must still comply with all tax reporting requirements. This includes withholding federal income taxes, Social Security, and Medicare taxes, etc.
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State and Local Laws: Be aware of any state or local laws that may affect your ability to hire workers with ITINs. Some states have specific regulations regarding employment and tax withholding for individuals with ITINs.
Best Practices for Employers
- Conduct Proper Verification: Ensure you complete Form I-9 for every employee and verify their work authorization status. Do not rely on an ITIN as proof of eligibility to work. Read this article to learn how to fill out the I-9 Form.
- Stay Informed: Employment laws and regulations can change. Stay informed about any updates to immigration laws and employment verification requirements.
And that's it!
While you can put someone on payroll with an ITIN number for tax reporting purposes, it is crucial to ensure they have proper work authorization in the United States.
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