The Wolf Group encourages taxpayers who have ITINs to ensure they are not subject to renewing their ITINs. However, for those taxpayers whose ITINs are up for renewal this year, and who choose not to renew it, their ITINs will expire. A taxpayer that files a tax return with an expired ITIN will likely experience delays in the processing of their tax returns. The personal exemption and certain tax credits of such taxpayers will be disallowed. Any possible tax refund would be reduced or the taxpayer may end up owing additional tax. It is also possible that the tax authorities would assess the taxpayer interest and penalties.
Do I need to renew my Individual Taxpayer Identification Number?
Prior to the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), taxpayers who applied for and received an Individual Taxpayer Identification Number (ITIN) could use it on tax returns indefinitely. After the PATH Act, taxpayers may need to renew their ITINs to be able to claim exemptions and certain tax credits on their tax returns, and to receive refunds.
Is my ITIN about to expire?
Your ITIN will expire if you have not used it on a tax return at least once in the last three years. For example, your ITIN will expire on January 1, 2017 if you did not use it on a 2013, 2014, or 2015 tax return.
Additionally, your ITIN will expire on January 1, 2017 if the two middle digits are “78” or “79” (your ITIN is: 9XX-78-XXXX or 9XX-79-XXXX). If your ITIN was used on a tax return in the last three years, but its middle digits are “78” or “79”, your ITIN will expire. If your ITIN was not used in the last three years and its middle digits are not “78” or “79”, your ITIN will also expire.
How do I know if my ITIN is about to expire?
The IRS will send you a letter (Letter 5821) letting you know that your ITIN must be renewed. The letter is general in nature and it may be applicable not only to you, but also to anyone included on your tax return.
Do I have to renew?
In general, you do not need to renew the ITIN if you do not file a tax return or a claim for refund. You also do not have to renew if the only reason for the ITIN is to use it on informational returns, like Forms 1099.
You should renew your and your family members’ ITINs if you plan to use them on your tax return. The IRS allows for a group renewal of all ITINs used on the return, even if some of them may not have expired yet. Consult your tax advisor for details.
When can I renew?
Starting on October 1, 2016, you may apply for a renewal of your ITIN, before you file your 2016 tax return. If you choose to renew the ITIN now, your tax return will be processed more quickly, which is especially beneficial if you expect to receive a tax refund.
ITINs for dependents – Additional information required:
As of October 1, 2016, the IRS requires additional information from a dependent who is using the passport as a stand-alone document to verify his/her foreign status and identity. In addition to the passport and visa, the IRS requires substantiation of the date of entry to the U.S. This new rule is not applicable to all dependents. Please contact your tax advisor for details.
If you need assistance in renewing your ITIN or filing your U.S. tax returns, please contact our Client Lead for New Clients, Fan Chen, at 703-502-9500 x137 or email@example.com.