The TIN Requirement
Every employee must provide a valid US taxpayer identification number for payroll purposes. For US citizens and resident aliens, that's a Social Security Number. For nonresident aliens who are not SSN-eligible, that's an Individual Taxpayer Identification Number (ITIN). Without one or the other, you have a compliance problem on two fronts: you can't properly complete the W-2, and you can't accept treaty claim forms like Form 8233 (which requires a US TIN).
What to Do While Waiting for an SSN
New foreign employees who are authorized to work in the US (F-1 OPT, H-1B, green card) can apply for an SSN at a Social Security Administration office. The process takes several weeks. During that time, they can still be employed and paid — you just withhold at the standard NRA rate without any treaty reduction.
The IRS allows you to delay filing the W-2 until you have the SSN, but you cannot simply leave the TIN field blank on a final W-2. Keep the employee's pay records and complete the W-2 once the SSN is received.
ITIN — When SSN Isn't Available
Some NRA employees are not authorized to work for wages but receive other types of US-source income (fellowships, royalties, certain honoraria). These individuals are not SSN-eligible. They need an ITIN. The ITIN application (Form W-7) must be filed with the IRS along with supporting documentation proving foreign status and identity.
ITIN applications take 7–11 weeks in normal processing times. Until the ITIN arrives, withhold at 30% on US-source income (or the applicable treaty rate if you have documentation supporting the claim — though technically treaty claims via Form 8233 require a TIN).
Backup Withholding Is Not the Answer
Some payroll departments mistakenly apply backup withholding (24%) to NRA employees without TINs. Backup withholding applies to payments to US persons who fail to provide a valid TIN — not to NRA wages. NRA wages without a TIN should be withheld at the standard NRA graduated rate, not at the backup withholding rate.
Treaty Claims Must Wait
If an employee is eligible for a treaty exemption but hasn't yet obtained a US TIN, the treaty exemption cannot be applied. You must withhold at the standard rate. Once they have an SSN or ITIN, they can file Form 8233 and you apply the treaty going forward. The employee can claim a refund for any overpaid taxes when they file their annual return.
Documentation to Collect in the Meantime
Even before the TIN arrives, collect and retain: the employee's passport information, visa type and dates, country of tax residence, and a statement of the treaty claim they intend to make once they have a TIN. This protects you if there are later questions about the appropriate withholding rate during the waiting period.