As a payroll company that specializes in adding ITIN workers to payroll, we hear this question all the time: "How can we add people as W-2 employees if they're not allowed to work?"
The simple answer is, you can't.
The bottom line is...
It doesn't matter if someone has an SSN (Social Security Number) or an ITIN (Individual Taxpayer Identification Number); what really counts is if they can fill out the I-9 form.
The Must-Have I-9 Form
The I-9 form, or Employment Eligibility Verification, is extremely important for legal work in the US.
Here's what you need to know about the I-9 form:
- Everyone Needs to Fill It Out: Every worker has to complete the I-9 form.
- Checking Documents: The I-9 form requires workers to show documents that prove who they are and that they're allowed to work in the U.S. These documents are sorted into three groups: List A (proves identity and work permission), List B (just proves identity), and List C (just proves work permission).
- No Other Option: There's no replacement for the I-9 form. If someone can't fill this out with the right documents, they legally can't work.
What's the Deal with ITIN?
The ITIN is often talked about when it comes to hiring people without SSNs, but it's important to know what it really does:
- For Taxes, Not Work: The IRS gives out ITINs for tax reasons. It's for people who need a tax number in the U.S. but can't get an SSN.
- Payroll and ITIN: An ITIN lets people handle their taxes, but it doesn't mean they can be hired. Employers can only legally add people to their payroll if they're allowed to work in the U.S., which is shown by the I-9 form.
Clearing Up Confusion
This is the confusion:
A lot of people tell us: "I read on the IRS website that you can’t include ITIN workers on your payroll because it’s not enough.”
And they are right!
The IRS says clearly that an ITIN is for tax purposes not for giving someone the right to work. The main thing is being able to fill out the I-9 form with the right documents.
In the end, whether someone can work in the U.S. isn't about having an SSN or an ITIN. It's all about the I-9 form. This form is key in figuring out if someone can legally work in the U.S.
Need help with your payroll? Wondering how much our services cost? Use our instant pricing calculator to get your pricing estimate (ITIN workers included in regular payroll pricing).
If you found this article helpful, here are some others you might like:
- How Much Do Payroll Services Cost?
- 1099 vs W2 Employee - An Honest Cost Comparison for Business Owners
- Why are my W2 Wages Lower Than my Salary?
- How to Choose the Best Payroll Company for Your Small Business
- The Pros and Cons of Paying Employees with Payroll Paycards
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