Can an ITIN Be Used on a W-2 Form?

The Form W-2, Wage and Tax Statement, details an individual’s annual earnings and the taxes withheld from their pay. An Individual Taxpayer Identification Number (ITIN) is issued by the Internal Revenue Service (IRS) to individuals who require a U.S. taxpayer identification number but are not eligible for a Social Security number (SSN). This article clarifies the interaction between these two identification methods, specifically addressing their proper use on the W-2 form.

Understanding the W-2 Identification Requirement

The W-2 form is a federal tax document used to report an employee’s annual wages and the amounts of federal, state, and local taxes withheld. This statement is provided by employers to employees and is also submitted to the Social Security Administration (SSA) and the IRS. The purpose is to ensure accurate reporting of income and tax liability for each employee.

Box a on the W-2 form is designated for the “Employee’s social security number.” This nine-digit number identifies the employee for tax purposes, including the accurate reporting of Social Security and Medicare taxes. An SSN is a requirement for employment in the United States, as it links an individual’s earnings to their Social Security earnings record.

The Role of an ITIN

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the IRS to individuals who need a U.S. taxpayer identification number but are not eligible for a Social Security number (SSN). This nine-digit number always begins with the number nine. Individuals who might need an ITIN include nonresident aliens, resident aliens, and dependents of U.S. citizens or residents who must file tax returns but lack an SSN.

An ITIN is for federal tax reporting purposes, allowing individuals to comply with U.S. tax laws by filing federal tax returns and paying taxes. However, an ITIN does not authorize work in the United States, nor does it provide eligibility for Social Security benefits, such as retirement or disability payments. It also does not serve as a form of identification outside of federal tax administration.

Addressing Identification on a W-2

An Individual Taxpayer Identification Number (ITIN) cannot be entered in Box a, “Employee’s social security number,” of Form W-2. IRS instructions explicitly state that this field is reserved for a valid Social Security number only.

If an employee has an ITIN but no SSN, the employer must advise them to apply for a Social Security number if they are eligible. If the employee has applied for an SSN but has not yet received it by the time the W-2 must be issued, the employer should enter “Applied For” in Box a. Once the employee receives their SSN, the employer is required to issue a corrected W-2, known as Form W-2c, with the valid Social Security number.

Employer Responsibilities Regarding Identification

Employers must obtain a valid Social Security number (SSN) from each employee for accurate wage reporting on Form W-2. Failure to include a correct SSN on a W-2 can lead to penalties from the IRS. If an employee does not provide a valid SSN or provides an ITIN instead, the employer must still prepare the W-2. In such cases, entering “Applied For” in Box a is appropriate if the employee is awaiting their SSN. Employers should request the SSN from the employee to ensure compliance.

Penalties for incorrect or missing SSNs on W-2 forms can range from $60 to $310 per form, depending on the timeliness of correction. These penalties escalate for intentional disregard of filing requirements, potentially reaching $630 per form with no maximum limit.

Employers must continue to withhold federal income tax, Social Security, and Medicare taxes from an employee’s wages, even if an SSN is not yet available. These withholdings are reported on the W-2, regardless of whether Box a contains a valid SSN or “Applied For.” The Social Security Administration (SSA) may notify employers of name and SSN mismatches, necessitating corrections through Form W-2c.

Employee Actions for Proper Reporting

Individuals who possess an ITIN but are engaged in employment should acquire a Social Security number (SSN) if they are eligible. An SSN is required for employment and accurate wage reporting to the Social Security Administration. Applying for an SSN, if eligible, helps ensure proper crediting of earnings for future Social Security benefits.

If an employee receives a W-2 form with “Applied For” or a blank space in Box a, they should still use this document to file their personal income tax return (Form 1040). On their Form 1040, they will enter their ITIN in the designated space for taxpayer identification. Obtaining an SSN and ensuring it is correctly reported by employers helps prevent potential issues with wage records and future eligibility for Social Security benefits.