They're homonyms, but they mean different things.

How do you know when it's needs an apostrophe?

It's with an apostrophe is a contraction.

It means it is or it has.

It's been a long time since I visited my uncle Owen.

If I expand that contraction, you'll see that here it's with an apostrophe means it has.

It has been a long time since I visited my uncle Owen.

It's sunny today.

Here you see that it's with an apostrophe.

Could be short for it is it is sunny today It's without an apostrophe.

On the other hand is a possessive like the words his and her.

We use it when there isn't a gender.

The butterfly spread its wings.

You're talking about the wings that belong to the butterfly.

So you want the possessive form?

I t s no apostrophe.

Still not sure.

Try substituting and it is or it has in the sentence and you'll see it doesn't make sense.

The butterfly spread It is wings.

No, the butterfly spread.

It has wings.

That's how you know for sure you do not want the apostrophe?

Try this one.

The town holds its annual pancake breakfast in March, which were Do we use?

Let's check if we use It's with an apostrophe.

That means a sentence is either the town holds It is annual pancake breakfast in March or the town holds it has annual pancake breakfast and march.

Those sound all wrong, don't they?

That's because we need the possessive I t s without an apostrophe.

Give this one a shot.

It's my dream to dance with Ringo Starr.

Okay, This one is tricky because we're talking about my dream.

So you might think we should use I t s.

It's the possessive.

Don't fall for that trap user trick.

Try substituting in It is or it has.

Because if that works, you know we need the apostrophe.

It is my dream to dance with Ringo Starr.

Why, yes it is.

What do you say, Ringo?