What does ITIN stand for?

The correct answer is Individual Taxpayer Identification Number (ITIN). This identification number is issued by the Internal Revenue Service (IRS) for tax purposes. It is primarily designed for individuals who are not eligible to obtain a Social Security Number (SSN) but need to fulfill their tax obligations in the United States. ITINs allow these individuals, often foreign nationals or non-resident aliens, to report their income and pay taxes, thereby ensuring compliance with U.S. tax laws.

Having an ITIN helps facilitate the filing of taxes for individuals who do not have a SSN, allowing them to access certain benefits and services, such as federal tax benefits and claiming dependents. Understanding the purpose and function of the ITIN is crucial for anyone involved in payroll and tax preparation, particularly when dealing with clients from diverse backgrounds.