This guide provides step-by-step instructions for a nonresident alien to complete Form W-7 to obtain an Individual Taxpayer Identification Number (ITIN) for the purpose of reporting distributions from an inherited IRA.
If you are a nonresident alien inheriting a U.S.-based IRA, the distributions (payments) you receive are considered U.S.-source income. To report this income to the IRS and meet your tax obligations, you must file a U.S. tax return (typically Form 1040-NR), which requires an ITIN if you do not have a Social Security Number (SSN).
Get the form W7 https://www.irs.gov/pub/irs-pdf/fw7.pdf. If you need more guidance, read https://www.irs.gov/pub/irs-pdf/iw7.pdf
Other documents you will need :
- A valid identification document: Your passport is the most common and preferred document. It must be an original or a certified copy from the issuing agency.
- Letter from the Financial Institution: A statement or letter from the IRA custodian (e.g., brokerage firm, bank) that confirms your status as a beneficiary of the inherited IRA and outlines the need for an ITIN to complete a tax-related transaction. This document is crucial to support your application.
- Step-by-Step Instructions for Form W-7
Follow the instructions below to fill out the form. Use a black or blue pen and write clearly, or type your answers.
Select Application Type ‘apply for a new ITIN’.
Part I – Reason You’re Submitting Form W-7
Check the box that applies to your situation. For an inherited IRA, you will almost always check:
- Box a. Nonresident alien required to file a U.S. tax return.
This is the correct box because you need the ITIN specifically to file the Form 1040-NR that reports your IRA distribution.
In ‘Box h’ enter “Exception 1. Passive income income you receive as the beneficiary of a pension”.
In the additional information box under ‘Box h’ complete as follows. “Additional information for a and f: Enter treaty country United Kingdom and treaty article number Article 17“
Part II – Applicant Information
This section is for your personal details. Fill in the information as it appears on your passport.
- Line 1a: Enter your full name as it appears on your official identification document.
- Line 1b: Only fill this out if your name has changed since birth (e.g., due to marriage).
- Line 2: Your mailing address. This can be your foreign address or a U.S. address (if you have one). This is where the IRS will send your ITIN assignment letter.
- Line 3: Your foreign address. You must fill this out if your mailing address on Line 2 is in the U.S.
- Line 4: Enter your date of birth in the mm/dd/yyyy format. Enter the city, state/province, and country where you were born.
- Line 5: Select Male or Female.
- Line 6a: Your country of citizenship.
- Line 6b: Your UK National insurance number. Or if non-UK your local tax number.
- Line 6c: ignore this box.
- Line 6d: Check the box for “Passport” and write the country that issued it, document number and expiry date.
- Line 6e: enter Yes or No to whether an ITIN has been issued before.
- Lines 6f, 6g, and 6h: You can leave these blank unless they apply to your specific situation (e.g., you are a student or a dependent).
Part III – Signature
- Signature of applicant: Sign and date the form. Your signature must match the name on Line 1a.
- Print Name: Print your full name below your signature.
- Daytime phone number & Email address: Fill in your contact information so the IRS can reach you if they have questions about your application.
Options for Certification of Passport in the UK for W7 Form
- Use a Certified Acceptance Agent (CAA): This is the recommended method. CAAs are individuals or firms (including some solicitors’ firms and accountancy firms) in the UK who are authorised by the IRS to verify an applicant’s identity and foreign status. The CAA reviews the original documents, issues a “Certificate of Accuracy” (Form W-7COA), and submits the application package directly to the IRS, which means you do not have to send your valuable original documents (like your passport) to the United States.
- Mail Original Documents to the IRS: You can complete the Form W-7 yourself and mail it along with your original identification documents (e.g., passport) to the IRS address listed in the form instructions. The documents will be returned after processing, but this method carries the risk of documents being lost in transit and can lead to longer processing times.
- Visit a US Embassy or Consulate: You may be able to submit your application in person at a US embassy or consulate, where they can review and certify your documents.
Putting It All Together: The Mailing Checklist
Once you have completed the Form W-7, gather all your documents and prepare them for mailing.
- Completed and signed Form W-7.
- Your unfiled U.S. tax return (Form 1040-NR).
- Your original or certified copy of your passport.
- The letter/statement from the IRA custodian confirming your beneficiary status.
Mail your complete package via a traceable method (e.g., certified mail) to the following IRS address:
Internal Revenue Service
ITIN Operation
Austin, TX 73301-0010