This article is helpful to Non-US Citizens with ITIN numbers issued, Its time to check if you need to renew your ITIN.
More than 1 million Individual Taxpayer Identification Numbers (ITINs) are set to expire at the end of 2020 as the Internal Revenue Service continues to urge affected taxpayers to submit their renewal applications early to avoid refund delays next year. ITINs are used by people who have income tax filing or payment obligations under U.S. law but who are not eligible for a Social Security number (For example, Foreign partners, LLC business, spouse dependents of US Citizens).
ITINs not used in the last three consecutive tax years
Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal tax return at least once in the last three consecutive years and those ITIN issued before 2013 and this year ITIN with middle digits 88 will expire by Dec. 31, 2020. In addition, ITINs with middle digits 90, 91, 92, 94, 95, 96, 97, 98 or 99 that have not already been renewed will also expire at the end of the year. These affected taxpayers who expect to file a tax return in 2021 must submit a renewal
application as soon as possible.
Expiration and renewal of ITINs Particularly ITINs with the middle digits “88, 90 to 99.”
Taxpayers whose ITIN is expiring and who expect to have a filing requirement in 2021 must submit a renewal application. Others do not need to take any action. ITINs with the middle digits 88, 90, 91, 92, 94, 95, 96, 97, 98, or 99 (For example 9NN-88-NNNN) need to be renewed even if the taxpayer used it in the last 3 years.
Family options – Taxpayers with an ITIN that has middle digits (as listed above) as well as all previously expired ITINs, have the option to renew ITINs for their entire family at the same time. Those who have received a renewal letter from the IRS can choose to renew the family’s ITINs together, even if family members have an ITIN with middle digits that have not been identified for expiration. Family members include the tax filer, spouse and any dependents claimed on the tax return.
Why Renewal of ITIN number is important for U.S Tax Filers
The simple answer would be to avoid tax return and if you are expecting a refund from IRS expired ITIN will cause processing delays of 1040NR and 1040 tax returns. As a result of the Tax Cuts and Jobs Act of 2017, the deduction for personal exemptions was suspended for tax years 2018 through 2025. Therefore, spouses and dependents who could’ve been claimed in previous years for the personal exemption and no other benefit shouldn’t apply for or renew their ITINs, unless they qualify for an allowable tax benefit, such as dependent parents who qualify the primary taxpayer to claim Head of Household (HOH) filing status, or if they file their own tax return. The individual must be listed on an attached U.S. federal tax return with the schedule or form that applies to the allowable tax benefit.
How to renew an ITIN
- To renew an ITIN, a taxpayer must complete a Form W-7 and submit all required documentation.
- Taxpayers submitting a Form W-7 to renew their ITIN are not required to attach a federal tax return.
- Spouses and dependents residing outside of the U.S. only need to renew their ITIN if filing an individual tax return, or if they qualify for an allowable tax benefit (e.g., a dependent parent who qualifies the primary taxpayer to claim head of household filing status.) In these instances, a federal return must be attached to the Form W-7 renewal application.
Avoid errors and prevent refund delays
If ITIN renewal is not done in time or ITIN renewal application not competed in time, Federal tax returns that are submitted in 2021 with an expired ITIN will still be processed. However, certain tax credits and any exemptions will be disallowed. Once the ITIN is renewed, applicable credits and exemptions will be restored, and any refunds will be issued.
Certified Acceptance Agents (CAA) role in ITIN renewal process
Working IRS approved certified acceptance agents (CAA) authorized by the IRS to help taxpayers apply for an ITIN. CAAs can authenticate all identification documents for primary and secondary taxpayers, verify that an ITIN application is correct before submitting it to the IRS for processing and authenticate the passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.
If you need assistance with IRS approved certified acceptance agent(CAA) service for ITIN Renewal/ITIN application process
with passport certification, US 1040 filing for refund claim/Streamlined US tax filing, ITIN/ Form W7 Application/US 1040NR US tax filing for refund claim of excess 1042S / 8288A/8805/ W2/ 1099 withholding.
For overseas clients. We can arrange for a skype interview if the documents are sent to one of our representative teams.
Our Skype ID is: TAH2108