Foreign Entrepreneurs and Wage Reporting
Question: I am a foreign national and own a C- Corporation. I work for the corporation and have wages. Can I use my ITIN to report wages?
Answer: U.S. law does not place restrictions on an individual from another country to own a company of any kind (i.e. corporation, limited liability company or partnership entity) in the United States or its territories. You need not hold a green card or even be located within the boundaries of the United States in order to form such a company.
As a Foreign national, you may also serve as a director or officer of a corporation, or a manager of a limited liability company formed in the U.S., but may not receive compensation for services provided to the company within the United States, unless you have been issued a work permit issued by the U.S. government, such as a “green card,” or other special visa authorizing such status.
Receiving wages without work authorization is illegal, however, you’re entitled to receive dividends in the company as an investor.
While the IRS does not specifically prohibit you from submitting a W-2 with an ITIN, it’s important to know that your W-2 will be placed in the Social Security Administration’s (SSA) Earnings Suspense File and the you will not get credit for Social Security benefits. Also, the SSA will issue a no-match letter to the employer. Lastly, the SSA eventually provides some of the no-match information to immigration enforcement agencies, which could eventually lead to an audit.
***Disclaimer: I am a tax accountant and a CPA licensed in Massachusetts , but I am not your accountant or advocate (Unless you have signed up to my services). This communication is not intended as tax advice, and no tax accountant -client relationship results**