Can You Open a Roth IRA With an ITIN Number?

A Roth Individual Retirement Arrangement (IRA) is a retirement savings vehicle allowing after-tax contributions to grow tax-free, with qualified withdrawals also being tax-free in retirement. An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who need a U.S. taxpayer identification number but are not eligible for a Social Security Number (SSN). Many individuals who are not U.S. citizens or permanent residents may possess an ITIN for tax filing purposes. This article clarifies whether a Roth IRA can be opened with an ITIN and outlines the necessary steps and considerations.

Eligibility for a Roth IRA with an ITIN

It is possible to open and contribute to a Roth IRA using an ITIN. The requirements for contributing to a Roth IRA apply uniformly to all individuals, whether they use an SSN or an ITIN. These include having earned income and meeting specific Modified Adjusted Gross Income (MAGI) limits.

Earned income refers to taxable wages, salaries, tips, professional fees, bonuses, and net earnings from self-employment. This is income received for personal services, distinguishing it from passive income sources like rental income, interest, or dividends, which do not qualify for Roth IRA contributions. For 2024 and 2025, the maximum amount that can be contributed to a Roth IRA is $7,000 for individuals under age 50, and $8,000 for those age 50 and older.

Eligibility to contribute the full amount is subject to MAGI phase-out ranges, which vary by filing status. For single filers, the ability to make a full contribution phases out with a MAGI between $146,000 and $161,000 in 2024, and $150,000 and $165,000 in 2025. For married couples filing jointly, this range is between $230,000 and $240,000 in 2024, and $236,000 and $246,000 in 2025. If your MAGI falls within these ranges, your contribution limit is reduced; if it exceeds the upper threshold, you cannot contribute for that tax year.

Information and Documentation Required

Before initiating the Roth IRA application process, individuals with an ITIN should gather specific information and documentation. A valid government-issued identification, such as a foreign passport or a national identity card, is typically required to confirm identity.

The official ITIN assignment letter, known as a CP565 notice, is necessary to verify your Individual Taxpayer Identification Number. Proof of earned income is also essential, which can include recent pay stubs, W-2 forms from employers, or 1099 forms for self-employment income. Financial institutions will also request proof of your residential address, which can be satisfied with utility bills, a lease agreement, or other official mail displaying your current address.

You will also need your banking information, including the account number and routing number, for funding your Roth IRA. Be prepared to provide personal details such as your full legal name, date of birth, current address, contact information, ITIN, and employment details.

Finding an Institution and Opening Your Account

After assembling all the necessary documentation, identify a financial institution that accommodates Roth IRA accounts for individuals with ITINs. Not all banks or brokerage firms have established procedures for ITIN holders, so research their policies. Check their websites, contact customer service, or visit local branches to determine if they accept ITINs for investment accounts.

Once a suitable institution is identified, you can proceed with the application. Many financial institutions offer various methods, including online, in-person at a branch, or by mail. Online applications involve completing digital forms and uploading scanned documents. For in-person applications, bring your prepared documents to a branch representative, and for mail applications, ensure all required forms are accurately completed, signed, and packaged with supporting documents. After submitting your application, you may receive a confirmation, and processing times can vary.

Maintaining Your Roth IRA

Once your Roth IRA is established, understanding its ongoing rules and tax implications is important. The annual contribution limits and income phase-outs discussed earlier apply consistently each year you contribute to your Roth IRA. For 2025, the maximum contribution remains $7,000 for individuals under age 50, and $8,000 for those age 50 and older. It is crucial to monitor your Modified Adjusted Gross Income (MAGI) annually to ensure you remain eligible to contribute and do not exceed the income thresholds.

Withdrawals from a Roth IRA are categorized as either qualified or non-qualified, which determines their tax treatment. Qualified distributions, which are tax-free and penalty-free, generally require the account to have been open for at least five years and the owner to be age 59½ or older, disabled, or using the funds for a first-time home purchase. Non-qualified distributions may be subject to income tax on the earnings portion and a potential 10% early withdrawal penalty.

For tax reporting purposes, your financial institution will issue Form 5498, “IRA Contribution Information,” by May 31 each year, detailing your contributions. If you take a distribution, you will receive Form 1099-R, “Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.” It is important to use your ITIN accurately on all tax forms and to keep your personal and contact information updated with your financial institution.