IRS changes to Individual Taxpayer Identification Number or ITIN

Affordable Tax Prep is focused on keeping you up to date on tax laws and helping you have a smooth filing season. A new law that may affect your ITIN is now in place for 2017. If you have an ITIN that has not been used on a federal tax return at least once in the past three years, it will no longer be valid unless renewed. ITINs issued prior to the year 2013 that have been used on a return in the last three years will need to be renewed this fall. We will also see a rolling renewal schedule issued by the IRS that all ITIN numbers will be subjected to.

How can this affect you personally? If you as a taxpayer have an expired ITIN, and do not renew before filing a tax return next year, you could face a refund delay and may be ineligible for certain tax credits until the ITIN is renewed.

So, do you have to renew your ITIN? If you don’t need to file a tax return next year; there is no action needed. However, the two groups of ITIN taxpayers who may need to renew include those who have not filed in 2013, 2014 and 2015. If you fall into this group, and you will need to file a tax return next year you need to renew your ITIN. The time-period for renewal began October 1, 2016.

The other group is ITINs issued before 2013. They will begin expiring this year, taxpayers will need to renew on a rolling basis. The ITINs that will expire under this schedule are those with middle digits of 78 and 79. Check your number and if in example your number is 9_ _-78-_ _ _ _ then you are on the first list. The IRS should mail a letter to you starting in August to inform you of the need to renew.

Another, big change is that in years past, it was a common practice, that you can amend 3 years of tax returns in which you had ITINs to record that you now have a SSN, and qualify for those credits that you could not get due to having a ITIN.  Unfortunately, that is no longer the case; so don’t pay someone to amend your returns as you will not get a refund for those amended returns as they will be rejected.

Contact your tax preparer or feel free to call us at Affordable Tax Prep if you have questions or need help completing form W-7 or want to verify how these changes will affect you this upcoming tax year.

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