Delaying Paperwork Could Mean Forfeiting or Postponing Important Tax Credits

September 21, 2016 : H&R Block


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. 

But this year, taxpayers could jeopardize important tax credits if they delay tax-related paperwork. Taxpayers need to have a tax identification number, like a Social Security number (SSN) or individual taxpayer identification number (ITIN) by the April filing deadline in order to claim certain tax credits. Previously, taxpayers could file late or amended returns to claim credits after getting a valid taxpayer identification number.

The Protecting Americans from Tax Hikes (PATH) Act implemented new rules about eligibility for the child tax credit (CTC), American opportunity credit (AOC) and the earned income tax credit (EITC). Taxpayers and qualifying children now must have a valid taxpayer identification number by the due date of the return in order to claim the CTC or AOC. And taxpayers must have an SSN eligible for work by the due date of the return in order to claim the EITC.

With some ITINs expiring for the first time this year, taxpayers and their dependents need to renew their ITINs in order to receive refunds. Because it can take up to 14 weeks to get an ITIN during the tax filing season, taxpayers who know they need to renew will benefit by starting the renewal process this fall to make sure they have it in time for tax season to receive the CTC or AOC.

Taxpayers should also keep in mind that their ITIN application could be delayed beyond the 14 week timeframe. In 2014 and 2015, the IRS rejected almost a third of ITIN applications, usually due to insufficient identification documents.

For more information, taxpayers can learn more from The Tax Institute’s Timing is everything: The date taxpayers get an SSN or ITIN now affects whether they’re eligible for refundable tax credits.

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