New IRS Process for ITIN Renewal | H&R Block
September 1, 2017 : Mohit Sandhu – The Tax Institute
Editor’s Note: This post features tips from an expert at H&R Block on a tax change which applies to thousands of Americans – changes to Individual Taxpayer Identification Number (ITIN) renewals. (If you are overwhelmed after reading the new changes, help is here… Connect with a tax professional to ease your mind!) This article was originally published in September 2016 and has been updated to include 2017 changes.
As part of recent changes in tax laws, some individuals who have an Individual Taxpayer Identification Number, or ITIN, will be required to renew their ITIN for the first time.
Your ITIN is an identifying number issued by the IRS if you need to file your taxes but do not qualify for a Social Security Number. ITINs can also be issued for your dependents claimed as an exemption on a tax return but do not qualify for a Social Security number.
Do you Need to Renew Your ITIN?
If one of the following applies, you will need to renew your ITIN this year:
- If the middle digits of your ITIN are 70, 71, 72, 78, 79 or 80, they will expire at the end of this year: The IRS will send a CP48 Letter or Letter 5821 to you if you are affected by this change. The letter will explain how to renew the ITIN. In the coming years, the IRS is expected to announce other groups of taxpayers who will be affected.
- If your ITIN hasn’t been used at least once on a tax return in the last three years, it will expire on December 31, 2017. This means that if you did not use your ITIN on a return at least once for tax years 2014, 2015, or 2016, your ITIN will expire at the end of 2017.
New Identification Requirement for Some Dependents
New requirements will also affect dependents claimed on a return. Beginning October 1, 2016, the IRS will stop accepting passports without a date of entry for dependents as proof of identity and foreign status. However, dependents from Canada, Mexico, or overseas military members will not be affected.
In the past, passports were used as a standalone identification document for dependents. An ITIN application requires documents proving your identity and foreign status. You can still use passports with an entry stamp to continue proving these things.
However, since passports without an entry stamp are not accepted for dependents beginning on October 1, 2016, additional documents will be necessary to prove identity and foreign status. These additional documents include:
- U.S. medical records for dependents under age six,
- U.S. school records for dependents under age 18, and
- U.S. school records, rental statements, bank statements or utility bills listing the applicant’s name and U.S. address, if the applicant is over age 18.
For more information on proving identity and foreign status, see Page 22 of IRS Publication 1915.
What Should You Do Next?
You don’t have to file a tax return along with an ITIN renewal application. However, applications for new ITINs will still only be accepted when submitted with a return (with some exceptions).
If you plan on filing your tax return in 2018 and your ITIN expires at the end of 2017, then you can begin sending in your renewal paperwork on October 1, 2017
To renew an expiring ITIN, send a completed Form W-7, Application for IRS Individual Taxpayer Identification Number and required identification documents to the IRS. If you received a CP48 or Letter 5821, attach it to the renewal when you submit the renewal application.
There are three methods taxpayers can use to submit their W-7 application package:
- Mail your Form W-7 and original identification documents or certified copies of the documents to the IRS address on the Form W-7 Instructions. (Identification documents will be returned within 60 days).
- Use one of the many IRS authorized Acceptance Agents or Certified Acceptance Agents around the country.
- Call to make an appointment at an IRS Taxpayer Assistance Center.
To make this renewal process easier, the IRS is offering a family option for ITIN renewal. If your ITIN has the middle digits of 70, 71, 72, 78, 79 or 80 and you receive a renewal letter from the IRS, you can choose to renew your family at the same time. Family members include: the tax filer, spouse and dependents.
Affected taxpayers must use the most current version of the Form W-7 and check the box that says “Renewal”. Refer to the Form W-7 instructions for guidance.
Other Important Information
If you do not renew your ITINs and file a U.S. tax return using an expired ITIN, there may be a delay in processing your tax return. If not renewed by the return due date the child tax credit and the American Opportunity Credit may also be denied.
Taxpayers should take action to renew their ITINs in order to avoid delays or denials of items on tax returns.
Also, ITINs that are only used on information returns filed with the IRS by third parties do not need to be renewed.
While these changes won’t affect everyone with an ITIN, if you are affected, taking action to renew your ITIN will ensure you get your potential future refund without delay!
Keep in mind: if you are not required to file a return, then even though your ITIN is expiring, no current action is necessary. However, if you need to file a tax return in the future (or you would like to include a dependent on your tax return) and your ITIN is expired, your ITIN will need to be renewed when you file that future return.
H&R Block is Here to Help!
Applying for an ITIN for you, your spouse, and your dependents, can be completed when you prepare your tax return with H&R Block, so visit an H&R Block office today. With more than 9,000 bilingual tax professionals, we can offer a helping hand for your ITIN needs.
Additionally, H&R Block’s Certified Acceptance Agents (CAA), you can apply for an ITIN and keep your original documents, so you can apply for an ITIN and have a Certified Acceptance Agents verify your supporting documents at a participating H&R Block office. You can even keep the supporting documentation: your CAA will submit document copies along with your ITIN application to the IRS.
Connect with a tax professional at H&R Block today!