Now, if you want to skip the beautifully written personal account of how and where I got this information, you can download the basic steps I followed here.
Now for the story.
As I'm going to be published by an American publisher, and I'm Canadian, I need to apply for an International Tax Identification Number, or an ITIN. To apply for an ITIN, I need to fill out a fairly straight forward one-page form and provide original proof of my citizenship and identity. My passport conveniently meets both of these requirements. I have four options for submitting my passport as proof.
- Send it in the mail to Texas. (Not happening)
- Apply in person at an IRS Tax Payer Assistance Center and have them verify my documents. (Sounds good)
- Go to an "Acceptance Agent" in Canada and have them verify my documents.
- Get a certified copy from the issuing authority (i.e. Passport Canada, i.e. lines)
I didn't want to stand in line at Passport Canada, whose hours meant I'd have to take a day off, and while I was willing to do that for a day trip to the states, the lure of Surrey or Downtown Vancouver didn't hold the same retail excitement for me. So I logically turned to option three - Acceptance Agent. With my expert Google skills, I found three Acceptance Agents in the Lower Mainland of BC and asked them for quotes. I was willing to pay $50-100 for the convenience of a one-stop-shop, ease of mind and sheer laziness. Then I got the quotes back...
- $400 - plus I'd have to go to Passport Canada and get the certified copy myself
FOR A ONE PAGE FORM!!!!
I think any other writer can back me up one this--I don't write for the money. A good thing, too, because I'm probably not going to make much. Certainly, not enough to justify forking out $500 for a one-page tax form. I'd rather spend some of that money on promotion.
So I stretched my fingers and went back to my internet searching skills and resigned myself to the DIY option.
THESE ARE THE STEPS I TOOK TO GET MY ITIN FOR MY AMERICAN ROYALTIES AS A CANADIAN AUTHOR.
Step 1) Hauled my ass to the nearest Passport Canada office. I needed my passport and Form PPTC 516. Certified copies of any passport are free until March 31, 2014, after which, they will cost $45. (If you have a passport that doesn't expire any time soon, I recommend getting lots of free copies while you can. They're good for the life of the passport.)
The Form PPTC 516 is a scanned copy, because for some reason, Passport Canada doesn't feel it's necessary to provide it online (wtf Canada?!?). You can pick one up in person as well. Time to process: 1 week if you pick-up, 2 weeks if you have it mailed back. They take your passport, so don't do this if you're expecting to cross any borders any time soon.
Step 2) I requested a letter from my American publisher stating that I needed an ITIN to collect royalties.
Step 3) Filled out the W-7 Form. The official form instructions are here. These are available off the the IRS website (www.irs.gov)
- Under reason, I selected option a) Non resident alien required to get ITIN to claim tax treaty benefit. (explained on page 3-4 of the Instructions)
- Under reason, I also selected h) Other. Beside "(see instructions)." Beside this, I wrote "exception 1d) Royalties Income." For Treaty Country, I wrote "Canada" and for treaty article number, I wrote "VII"
"Other" is explained on page 4 of the W-7 Instructions.
The exception is listed on page 7 of the W-7 Instructions.
The Article number and Exemption information is explained on page 4 in Publication 901: U.S. Tax Treaties)
- I Filled out the rest of the form with my personal information and left the signing and dating blank
Internal Revenue ServiceStep 5) Waited
P.O. Box 149342
Austin, TX 78714-9342
Step 6) Waited some more
Step 7) While I waited, I filled out the W-8BEN for my publisher. Official form instructions are here.
- Under part I, number 6, I left blank. (I recorded my ITIN here when I received it). I checked the ITIN box.
- Under part II, number 9, selected a and b. Under a, wrote "Canada" on the line.
- Under part II, number 10, it's article "VII", claimed a "0%" rate of withholding on: "Royalties Income." For the explanation, I wrote: "Business profits of self-employed individuals, such as royalties, are exempt from U.S. income tax"
This information is explained on page 4 in Publication 901: U.S. Tax Treaties)
- Left the signing and dating blank
Step 9) Finished my bottle of wine.
For a simplified version of my steps, you can download the ITIN Recipe here. I call it the "ITIN Recipe." Enjoy.
I accept unopened boxes of chocolate and virtual hugs as a form of thanks :-)