Answer

Yes, you can put someone with an ITIN on the payroll. However, there are a few considerations to keep in mind concerning employee classification, compliance, payroll processing, and special cases. 

Let’s dive deeper into each of these points for a more detailed understanding:

Employee Classification

As a general rule, workers with ITINS should be treated as independent contractors rather than W-2 employees. Only workers who have proper authorization, such as an Employment Authorization Document (EAD) can be classified as W-2 workers. 

Compliance

ITINS does not provide work authorization so it’s crucial for employers to verify the employment eligibility of each worker using Form I-9 to make sure that your employees can legally work in the U.S. 

Payroll Processing 

Pay your employees with ITINs for proper documentation and taxation processing. Always adhere to U.S. tax laws to avoid penalties in the future. 

Special Cases

If an individual with an ITIN forms an LLC, you can pay them as a business entity, using 1099 payments for their work. This will help you stay compliant while benefiting from their services. However, ensure that the individual has the proper work authorization to perform services in the U.S.

Answered by a Boundless Immigration Expert

Unlock the potential of a diverse workforce: Request a demo

Learn about managing work visa compliance for foreign employees.