ITIN holders must renew ITIN for the first time
- This continues the H&R Block newsroom’s series on the Protecting Americans from Tax Hikes (PATH) Act, which made dozens of changes to the tax code. The PATH Act series covers its permanent extensions of many tax benefits, the renewal requirements for Individual Taxpayer Identification Numbers (ITINs), eligibility changes for certain tax credits, its expansion of other tax benefits, its increasing cost of making mistakes, its impact on small business and its delay of millions of refunds until February 15.
- The PATH Act tax impact resource guide provides information to help media and consumers.
The 23.1 million Individual Taxpayer Identification Numbers (ITINs) the IRS has issued since 1996 enable individuals who aren’t eligible to obtain Social Security numbers (SSNs) to file a U.S. tax return, pay U.S. taxes or open a bank account, among other things. Until now, ITINs (like SSNs) had no expiration date. But due to the Protecting Americans from Tax Hikes (PATH) Act enacted in December 2015, ITINs now expire on a staggered basis. In fact, many ITIN holders could see their ITINs automatically expire. They will have to follow new ITIN renewal procedures, which this year will most impact two groups of taxpayers: those with a “78” or “79” in the middle of their ITIN and ITIN holders who haven’t been filing tax returns.
9XX-78-XXXX and 9XX-79-XXXX need to renew ITINs
ITINs with a middle number in the 78 to 79 range will expire this year. These ITIN holders will need to renew their ITINs once the renewal process opens on October 1, 2016.
ITIN holders will know their number has expired if it is in that range. They should also receive a letter from the IRS notifying them that they need to renew their ITIN.
ITINs also will expire if they aren’t being used
ITINs also will expire if they weren’t used on a tax return for three consecutive years. In 2014, the IRS indicated that three-fourths of ITINs are not being used on tax returns. These ITIN holders may not have a filing requirement but use their ITIN for non-tax reasons, such as for holding a banking account or having a mortgage.
Therefore, a majority of ITIN holders could see their ITINs automatically expire. However, ITIN holders who have not filed a tax return for the last three years only need to renew when they need to file a tax return.
Families with multiple ITINs can renew at the same time
If one person’s ITIN expires this year, everyone in the household can renew their ITIN at the same time, even if they have not all expired. This will consolidate the paperwork for the family so they do not have to repeat the process one by one.
Organize documents for a new ITIN application
Individuals whose ITINs will be expiring should ensure that they have current documents showing proof of identity and foreign status. The IRS accepts original and unexpired passports as stand-alone proof of identity and foreign status for primary taxpayers and spouses and for dependents in some cases. Other documents that prove either identity or foreign status include:
- U.S. Citizenship and Immigration Services (USCIS) photo identification,
- visa issued by the U.S. Department of State,
- U.S. driver’s license,
- U.S. military identification card,
- foreign driver’s license,
- foreign military identification card,
- national identification card,
- U.S. state identification card,
- foreign voter’s registration card and
- civil birth certificate.
Seek out a Certified Acceptance Agent (CAA) regarding future ITIN renewal procedures
A CAA undergoes specialized training and is approved by the IRS to assist with the ITIN process by preparing the ITIN application, verifying supporting documents and then submitting the ITIN application to the IRS. Because a CAA can verify the supporting documents, the applicant does not need to send their original identification documents to the IRS. CAAs can assist with ITIN applications for dependents. Under new IRS rules taking effect at the same time as ITIN renewals, CAAs can also verify passports and birth certificates for dependents.
Prepare for ITIN renewal by keeping good, updated records
All ITIN holders should file any outstanding required or beneficial tax returns as soon as possible. Even if they weren’t required to file, they may benefit by filing (for example, to obtain a refund of income tax withholding).
ITIN holders should also watch for notices from the IRS and stay up to date on future ITIN expiration dates. They can learn more from The Tax Institute’s ITIN renewals: When ITINs will expire and how taxpayers and their advisors can prepare or the IRS’ ITIN FAQs.
Learn whether tax reform will mean a larger or smaller tax refund this year with H&R Block’s tax refund and tax reform calculator.
Learn about the TCJA impact on taxpayers this year. H&R Block explains why some people had smaller refunds although their taxes went down and the importance of W-4 help.
Tax refunds for H&R Block clients were up 1.4% under the first year of tax reform and the new withholding tables, while overall tax liability was down 5.6%.
Were you surprised by a lower tax refund last year? Learn how to navigate the impact of tax reform with strategies from the experts at H&R Block.