The U.S. Internal Revenue Service (IRS) has started accepting ‘ITIN Renewal Applications’ for Individual Taxpayer Identification Numbers (ITIN) set to expire in December 2017.  These include ITIN’s that have not been used to file a tax return for the last 3 years as well as ITINs with middle digits 70, 71, 72 or 80.

Non-U.S. Taxpayers, who have an ITIN about to expire and expect to file a tax return in 2018, should immediately submit their ITIN renewal application.

Many non-U.S. resident taxpayers use an ITIN to comply with U.S. taxes, when needed. It is important for qualifying taxpayers to renew their ITIN as non-compliance could delay expected tax refunds, and in some cases may disqualify taxpayers from certain tax credits, such as the Child Tax Credit or the American Opportunity Tax Credit, until the ITIN is renewed.

The following is a brief overview of IRS’ ITIN Renewal Process for 2017.

 

U.S. Individual Taxpayer Identification Numbers (ITIN) Renewal

 

The ITIN Renewal process officially started from October 2016, even though the policy to renew ITINs was passed in 2013. In 2016, the only ITIN’s accepted for renewal were:

  • Those issued before 2013, or
  • Those with middle digits of 78 and 79

In August, 2016, the IRS began sending out mails regarding the ITIN renewal requirement and explanation of the renewal process to the taxpayers with expiring ITINs.

The renewal process faced some challenges, therefore, the IRS has decided to make some changes to make the ITIN renewal process smoother for taxpayers. One of these changes is the renewal process for ITINs expiring in December 2017, will be beginning the renewal process three months in advance.

In addition, the IRS has started a wider education program and will be addressing more categories than those addressed in 2016.

 

U.S. ITIN Renewal 2017

As mentioned earlier in the article, the IRS is accepting ITIN renewal application forms from taxpayers with the following ITIN’s:

  • Those that have not used their ITIN in the last three U.S. tax filing seasons (2017, 2016, and 2015), and expect to file a U.S. tax return in 2018 (2017 tax filing), or
  • Those with middle digits 70, 71, 72 or 80, e. ITIN 9XX-70-XXXX, ITIN 9XX-71-XXXX, ITIN 9XX-72-XXXX, ITIN 9XX-80-XXXX

Taxpayers can also renew their ITINs with middle digits 78 and 79 that have already expired.

 

ITIN Renewal Application Form

In order to renew the ITIN, taxpayers will need to file the most recent version of Form W-7, Application for IRS Individual Taxpayer Identification Number, and provide documents in support of their foreign status. The taxpayer may either mail the completed Form W-7 along with supporting documents to the IRS, or visit their nearest IRS office or an authorized Certified Acceptance Agent in one’s own country.

Taxpayers submitting a Form W-7 to renew their ITIN are not required to attach a federal tax return. However, taxpayers must still note a reason for needing an ITIN on the Form W-7.

 

ITIN Renewal For Dependents & Previously Expired ITINs

Non-U.S. person taxpayers renewing their ITIN can also apply for renewal of their dependents’ ITIN at the same time even if  family members have an ITIN with middle digits other than 70, 71, 72 or 80. Family members include the tax filer, spouse and any dependents claimed on the tax return.

 

Avoid Errors When Renewing ITIN

When applying for an ITIN, do not forget to include a certified copy of a passport (or other document as required by the IRS) along with the ITIN Renewal Application Form, to substantiate non-U.S. residency.

Note that the passport should have a date of entry for individuals from countries other than Canada and Mexico.

The dependent’s passport must have a date of entry stamp, otherwise the additional documents to prove U.S. residency are required.  These include medical records for a dependent below 6 years of age, and school records for dependents between ages 6 and 18 along with the certified passport copy.   For dependents above age 18, bank statements, utility bills, rental receipts or any other document with their name and address should suffice.

Qualifying U.S. non-resident taxpayers, including Canadians with ITINs,  who regularly file U.S. tax returns to report rental or other U.S. income should consider visiting their tax return preparer to discuss the expiration of their existing ITIN and application for its renewal.

If a taxpayer files their 2017 tax return (2018 tax season) with an expired ITIN, their refunds and exemptions may be disallowed until they renew their ITIN, and update the IRS.

It is highly recommended that taxpayers who need to renew their ITIN  apply for renewal as soon as possible to avoid any last minute rush, and errors that could slow down the process, or put their ITIN renewal application on hold.  Common mistakes, generally, involve missed supporting documents, or typing errors.

 

 AG TAX LLP CAN HELP

If you have any tax-related queries, need assistance with tax planning or filing your tax returns please contact us. Our team comprises of highly experienced tax professionals with extensive knowledge of US and Canadian tax laws as well as cross-border compliance.

Furthermore, as a full service accounting firm, AG Tax assures complete assistance with even your most complex tax needs.

We can assist with:

  • Canadian Personal and corporate tax returns
  • Cross Border Taxation and Business Planning
  • US Personal and Corporate Taxation
  • Disclosure of Foreign Assets and other information filings
  • Retirement planning
  • Estate Planning, Inheritance tax advice

To obtain a quote or to arrange for a tax consultation to discuss your US Canada cross border tax  queries, please contact us at:

  • 604-538-8735 (Greater Vancouver Area, BC)
  • 780-702-2732 (Greater Edmonton Area, AB)

 

Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.