What is the process for obtaining an Individual Taxpayer Identification Number (ITIN) in California to comply with state tax laws?

To comply with California tax laws, you must obtain an Individual Taxpayer Identification Number (ITIN) from the federal Internal Revenue Service (IRS), as the state does not issue its own. You use this federal ITIN to meet your state tax filing obligations. Here is the process for obtaining an ITIN for tax filing purposes: Step 1: Complete the Application Form Fill out IRS Form W-7, Application for IRS Individual Taxpayer Identification Number. You must state the reason you need the ITIN; for most, this is to file a U.S. federal tax return, which is a prerequisite for filing your California return. Step 2: Prepare Your Federal Tax Return Attach a valid, completed federal income tax return to your Form W-7. You generally cannot apply for an ITIN without also filing a federal tax return at the same time. Step 3: Gather Proof of Identity Documents You must provide original documents or certified copies from the issuing agency that prove your foreign status and identity. A valid foreign passport is the most common document used, as it proves both. Other documents, like a national identity card or foreign driver's license, may be combined. Step 4: Submit Your Application Package You have three options for submission: - Mail the Form W-7, tax return, and original documents to the IRS address in the W-7 instructions. - Use an IRS-authorized Certifying Acceptance Agent (CAA). A CAA can verify your original documents and return them to you immediately, preventing you from having to mail them. - Make an appointment at a designated IRS Taxpayer Assistance Center (TAC) that provides ITIN services. Step 5: File Your California Tax Return While your ITIN application is pending, you can file your California tax return (Form 540). Write "ITIN Applied For" or "Applied For" in the space for the identification number. Attach a copy of your federal tax return and the Form W-7 to your state filing. Important Details and Nuances: The IRS typically processes ITIN applications within 7 to 11 weeks. An ITIN is for tax purposes only; it does not authorize you to work in the U.S. or provide eligibility for Social Security benefits. ITINs expire if not used on a federal tax return for three consecutive years. Warnings and Limitations: Mailing original identity documents like a passport carries a risk of loss. Using a Certifying Acceptance Agent is strongly recommended to avoid this. Under California Revenue and Taxation Code Section 19183, failure to provide an identifying number on your state tax return when required may result in penalties. This is general information and does not constitute legal advice. For complex situations, consult with a qualified California attorney.