You can invest with an ITIN by opening a taxable brokerage account at a U.S. firm that accepts foreign taxpayer identification numbers, submitting either Form W-9 or Form W-8BEN depending on your residency status, and buying stocks, bonds, ETFs, and mutual funds the same way any other investor would. The tax treatment, however, splits sharply based on whether the IRS classifies you as a resident alien or a nonresident alien, and that classification decides almost everything else. The IRS issues an ITIN as a nine-digit tax processing number for people who need to file federal taxes but are not eligible for a Social Security Number.1Internal Revenue Service. Individual Taxpayer Identification Number (ITIN) One boundary worth naming up front: the IRS does not issue ITINs solely so you can open an investment account. You need a federal tax filing purpose first, and the ITIN itself says nothing about your immigration status or work authorization.2Internal Revenue Service. Topic No. 857, Individual Taxpayer Identification Number (ITIN)
Resident Alien or Nonresident Alien
Sort this out before you touch a brokerage application. Resident aliens follow essentially the same tax rules as U.S. citizens, reporting worldwide income on Form 1040. Nonresident aliens generally owe U.S. tax only on U.S.-source income and file Form 1040-NR.3Internal Revenue Service. 2025 Instructions for Form 1040-NR
For an investor the gap between the two tracks is wide. A nonresident alien who spends fewer than 183 days in the U.S. during the tax year generally owes no U.S. tax on capital gains from selling stocks or funds.4Office of the Law Revision Counsel. 26 USC 871 – Tax on Nonresident Alien Individuals A resident alien pays capital gains tax on those same sales just like any American investor, and may also owe the 3.8% Net Investment Income Tax once income clears certain thresholds.5Internal Revenue Service. Questions and Answers on the Net Investment Income Tax
What You Can Actually Invest In
A taxable brokerage account is the simplest entry point. Both resident and nonresident aliens can hold equity in publicly traded U.S. companies, collect dividends, and sell shares on the open market. Through the same account you can buy individual stocks, government and corporate bonds, exchange-traded funds, and mutual funds. Trading mechanics are identical to any other brokerage account; only the tax layer differs.
Retirement accounts are narrower. Resident aliens with earned income reported under their ITIN can contribute to Traditional and Roth IRAs under the same rules that apply to U.S. citizens. Nonresident aliens face a tighter path: IRS Publication 519 allows a Traditional IRA deduction only if you have taxable compensation effectively connected with a U.S. trade or business.6Internal Revenue Service. Publication 519 (2025), U.S. Tax Guide for Aliens Without U.S.-connected earned income, retirement accounts are generally off the table.
Real estate is available directly or through Real Estate Investment Trusts. Rental income from U.S. real property owned by a nonresident alien is taxed at a flat 30% (or lower treaty rate), though you can elect to treat that income as effectively connected with a U.S. business, deduct expenses, and pay at graduated rates instead.7Internal Revenue Service. Nonresident Aliens – Real Property Located in the U.S.
Which Brokerages Accept an ITIN
Not every platform does, and the ones that do often route ITIN applicants through a different onboarding path than the standard online sign-up. Charles Schwab’s international account requires a “Tax ID Number or Social Security Number,” which accommodates ITIN holders, though you may need to work with their international services division rather than the consumer website.8Charles Schwab. Open an Account Intro Fidelity processes ITIN applications through its non-resident or international account channels. Among robo-advisors, Betterment states that you may open an account with an ITIN if you do not have a Social Security Number.9Betterment. Why Does Betterment Require My Social Security Number (SSN)?
Some popular apps do not accept ITINs. Stash requires a Social Security Number and will not process an ITIN application.10Stash. What Do I Need to Start Using Stash? Confirm a platform’s current policy before spending time on paperwork; a firm that accepted ITINs last year may have tightened requirements. Some institutions also restrict margin or options access for ITIN accounts, so ask about feature limitations if those strategies matter to you.
Documents and Forms to Gather
Brokerages must comply with federal customer identification rules, so expect a heavier document load than a citizen signing up with an SSN. Have these ready before you start:
- Your CP565 notice, the IRS letter confirming your assigned ITIN and its primary proof of legitimacy.11Internal Revenue Service. Understanding Your CP565 Notice
- A current government-issued photo ID. A foreign passport is the strongest option; some brokerages accept a national ID card.
- Proof of address, such as a recent utility bill, lease, or bank statement showing a U.S. physical address. Some firms accept a foreign address for an international account.
- Details for a linked U.S. bank account you will use to fund the brokerage and receive withdrawals.
The tax certification form depends on your status. Resident aliens complete IRS Form W-9, which certifies your taxpayer identification number and helps the brokerage avoid backup withholding.12Internal Revenue Service. Instructions for the Requester of Form W-9 Nonresident aliens submit Form W-8BEN, which establishes foreign status and lets you claim reduced withholding under any tax treaty between the U.S. and your home country.13Internal Revenue Service. Instructions for Form W-8BEN Getting this form wrong means the brokerage either withholds too much or opens a compliance problem that delays your account.
Opening and Funding the Account
Expect a slower process than the five-minute online sign-up a citizen enjoys. Most brokerages route ITIN applications through a paper-based or special-account workflow. You will typically assemble a packet containing the completed brokerage application, your W-9 or W-8BEN, and copies of your identification documents. Some firms accept these through a secure upload portal; others want them mailed or expect an in-person branch visit to inspect originals.
Compliance review of foreign documentation generally takes one to three weeks. That is separate from IRS processing time for an ITIN application itself, which runs about seven weeks and can stretch to 11 weeks during peak tax season or if you apply from outside the country.2Internal Revenue Service. Topic No. 857, Individual Taxpayer Identification Number (ITIN)
Once approved, you can fund the account by linking a U.S. bank account for electronic transfer, which generally clears within two to three business days. For larger sums or international transfers a wire works but costs more.
How Your Investment Income Gets Taxed
This is where getting the classification right matters most. The wrong assumption can mean overpaying tax you do not owe or failing to report income you do.
Resident Aliens
Investment income is taxed the same way it would be for a U.S. citizen. Short-term capital gains on assets held one year or less are taxed at your ordinary income rate. Long-term gains get the preferential 0%, 15%, or 20% rates depending on taxable income. Dividends and interest are reported as ordinary income unless they qualify for the lower qualified-dividend rate. All of it goes on Form 1040. Higher-income filers may also owe the 3.8% Net Investment Income Tax on investment earnings above certain thresholds.5Internal Revenue Service. Questions and Answers on the Net Investment Income Tax
Nonresident Aliens
The picture looks completely different, and in some ways more favorable. If you spend fewer than 183 days in the U.S. during the tax year, net capital gains from selling stocks, ETFs, and other securities are generally not subject to U.S. tax.4Office of the Law Revision Counsel. 26 USC 871 – Tax on Nonresident Alien Individuals If you are present for 183 days or more, a flat 30% tax applies to net capital gains from U.S. sources.
Dividends, interest, and other “fixed or determinable” income from U.S. sources are taxed at a flat 30%, withheld at the source by your brokerage before the money reaches you.14Office of the Law Revision Counsel. 26 USC 1441 – Withholding of Tax on Nonresident Aliens A tax treaty between the U.S. and your home country can reduce that 30% substantially. That is precisely what W-8BEN is for: you identify your country of residence and the treaty article that entitles you to a lower rate, and the brokerage adjusts withholding accordingly.15Internal Revenue Service. Form W-8BEN Nonresident aliens are not subject to the 3.8% Net Investment Income Tax.5Internal Revenue Service. Questions and Answers on the Net Investment Income Tax
Filing Requirements and Penalties
Resident aliens file Form 1040, reporting all investment income and reconciling what they owe against what was withheld. Nonresident aliens file Form 1040-NR. You must file it if you were engaged in a U.S. trade or business during the year, or if you received U.S.-source income reported on Schedule NEC and not all the tax owed was withheld.3Internal Revenue Service. 2025 Instructions for Form 1040-NR If your brokerage correctly withheld 30% (or the treaty rate) on dividends and you had no other U.S. income, filing may not be required. If withholding was too low or you had effectively connected income, filing is mandatory.
Missing a required filing is expensive. The failure-to-file penalty is 5% of the unpaid tax for each month a return is late, up to 25%. If a return is more than 60 days overdue, the minimum penalty is $525 (for returns due after December 31, 2025) or 100% of the tax owed, whichever is less.16Internal Revenue Service. Failure to File Penalty These sit on top of the tax already owed.
Keeping Your ITIN Active
An ITIN expires if you do not include it on at least one federal tax return in any three consecutive tax years, with the expiration date falling on December 31 after the third year of non-use.17Internal Revenue Service. How to Renew an ITIN Any ITIN assigned before 2013 that was never renewed has already expired.
An expired ITIN does not shut down your brokerage account, and brokerages can still issue 1099s to an expired ITIN. But you cannot file a federal return with one. To renew, submit Form W-7 with your return and provide original identification documents or certified copies. A passport is the only standalone document accepted; otherwise you need at least two forms of ID that together prove identity and foreign status.18Internal Revenue Service. Instructions for Form W-7 If you would rather not mail the passport, a Certifying Acceptance Agent can authenticate documents in person and return them to you immediately.19Internal Revenue Service. Acceptance Agent Application Frequently Asked Questions
Estate Tax Trap for Nonresident Investors
This catches many nonresident investors off guard. U.S. citizens and resident aliens get an estate tax exemption in the millions. Nonresident aliens get an exemption of just $60,000 on U.S.-situated assets. If the fair market value of your U.S. assets at death exceeds that threshold, your estate must file Form 706-NA.20Internal Revenue Service. Some Nonresidents With U.S. Assets Must File Estate Tax Returns
U.S.-situated assets include stocks of domestic corporations, U.S. real property, and tangible personal property located in the country. For an active investor holding a diversified U.S. stock portfolio, crossing $60,000 does not take long. Some estate tax treaties provide a higher exemption or prorated credit, so check whether your home country has one in force. The annual gift tax exclusion for 2026 is $19,000 per recipient, which applies to gifts made by anyone regardless of citizenship.21Internal Revenue Service. What’s New – Estate and Gift Tax
FIRPTA Withholding on Real Estate Sales
If you invest in U.S. real property directly and later sell it, the buyer is required to withhold 15% of the total sale price under the Foreign Investment in Real Property Tax Act.22Internal Revenue Service. FIRPTA Withholding The 15% is a prepayment, not a final tax bill. You file a return to calculate the actual gain or loss, and if the withholding exceeds what you owe, you claim a refund.
One narrow exemption: if the buyer plans to use the property as a personal residence and the sale price is $300,000 or less, FIRPTA withholding does not apply.22Internal Revenue Service. FIRPTA Withholding Above that amount the withholding is mandatory. Budget for the cash flow hit at closing and plan to file promptly to recover any excess.