OnPay does not accept an ITIN for workers. When you hire workers in the United States, as the employer you are required to collect information such as the worker’s name, address, and tax ID number — usually a Social Security number (SSN). You are also obligated to verify their right to work in the US. An Individual Taxpayer Identification Number (ITIN) is insufficient for verifying an individual’s right to work.
This article will explain the difference between an SSN and an ITIN, and why OnPay does not support the ITIN as a tax ID for workers.
What we'll cover
- What’s the difference between an ITIN and an SSN?
- Why OnPay does not currently support ITIN workers
- What to do if you have a worker who has not provided an SSN
What’s the difference between an ITIN and an SSN?
A Social Security number is often used to identify an individual for things like obtaining credit or opening a bank account, but the SSN’s primary purpose is to authorize employment eligibility, authorize the government to collect taxes and provide government benefits and services.
Conversely, ITINs are strictly for tax purposes. The IRS issues ITINs to help those not eligible for Social Security Numbers comply with U.S. tax laws, and to provide a means to efficiently process and account for tax returns and payments.
Why OnPay does not allow ITINs for workers
When entering workers into OnPay, you will not be able to enter individuals using their ITIN. All employees and contractors must have a valid Social Security Number to be entered into OnPay.
This helps protect you as the employer, and your obligation to ensure workers have the right authorization to work. It also ensures that all wages reported and tax obligations are handled accurately.
- Does not authorize a person to work in the US
- Does not provide eligibility for Social Security Benefits or Earned Income Tax Credit
- Does not authorize taxes to be withheld
- Can not be used in filing a W2
- Can be used to file a 1099
What to do if you have a worker who has not provided an SSN
Encourage the worker to apply for a Social Security Number using Form SS-5. If they have questions about why this is important, you can direct them to the Social Security Administration website. There, they can learn what a Social Security account is, how it can help them plan for their retirement, and how to apply.
If you’ve hired employees or contractors who don’t have a Social Security Number, you can file them as a 1099 contractor using their Individual Taxpayer Identification Number (ITIN).
It is legal to hire someone who does not have a social security number, so it is possible that you could hire a 1099 contractor using an ITIN. However, the employer must have the employee complete an affidavit or IRS approved document for failure to obtain a valid tax identification number.
Learn more from the IRS guidance on ITINs.