Certain individuals with a United States income tax return filing obligation are required to apply for an Individual Taxpayer Identification Number (ITIN). ITINs are obtained and used in circumstances where a person, or his or her dependent spouse or children, may not be eligible for a social security number, but are still required to file income tax returns.
The IRS has issued the latest in a series of reminders targeting the over two-million foreign taxpayers who have individual ITINs that will expire this year, to submit their renewal applications as soon as possible. Failing to renew them by December 31, can cause refund and processing delays for the millions affected.
Who Needs to Renew an ITIN?
The IRS has been sending out millions of letters informing those with expiring ITINs that they need to renew. However, if you did not receive a letter, or you are unsure if you need to renew or not, here is a list of those who need to renew as per the IRS:
- Taxpayers whose ITIN is expiring and who need to file a tax return in 2019 must submit a renewal application. ITINs with the middle digits 73, 74, 75, 76, 77, 81 or 82 (such as, 9NN-73-NNNN) need to be renewed even if the taxpayer has used it in the last three years. Taxpayers who receive the notice after taking action to renew their ITIN, do not need to take further action unless another family member is affected.
- ITINs with middle digits of 70, 71, 72, 78, 79 or 80 that have previously expired. Taxpayers with these ITINs can still renew at any time.
- Spouses or dependents residing inside the United States should renew their ITINs. However, spouses and dependents residing outside the United States do not need to renew their ITINs unless they anticipate being claimed for a tax benefit (for example, after they move to the United States) or if they file their own tax return. That’s because the deduction for personal exemptions is suspended for tax years 2018 through 2025 by the Tax Cuts and Jobs Act. Consequently, spouses or dependents outside the United States who would have been claimed for this personal exemption benefit and no other benefit do not need to renew their ITINs this year.
How to Renew an ITIN
To renew an ITIN, taxpayers must complete a current Form W-7 and submit all required documentation. Although a Form W-7 is usually attached to the tax return, a taxpayer is not required to attach a federal tax return to their ITIN renewal application.
If you file a 2019 federal tax return with an expired ITIN, your return will still be processed, however, certain exemptions and deductions may be disallowed, and your refund, if any, may be delayed. Taxpayers who need to renew their ITINs are urged to do so.
How MBAF Can Help
The ITIN renewal requirement is part of a series of provisions established by the Protecting Americans from Tax Hikes (PATH) Act enacted by Congress in December 2015. At MBAF we are very familiar with the ITIN provision and all of the other provisions of the PATH Act. Our experts can help you determine if indeed you need to file for an ITIN renewal, and if so, can make sure that all of your forms are filed and submitted correctly, and by the proper deadlines, so that you are well prepared to correctly file your tax returns in 2018.
Understanding the PATH Act and how it applies to ITIN renewal can be complex. If you would like to benefit from our expertise in these areas, or if you have further questions on this Advisory, do not hesitate to contact our International Tax specialists, or call us at 1-800-239-1474.