The IRS is in the third year of its Individual taxpayer identification number (ITIN) renewal. In 2016, IRS announced renewals of ITINS with middle digits of 78 and 79, i.e. ITIN 9NN-78-NNNN, or ITIN 9NN-79-NNNN. While, in 2017 along with these renewals, ITINs with middle digits 70, 71, 72 or 80 were also called out for renewal. This year (2018), more than 2 million ITINs are set to expire.
U.S. taxpayers ITIN’s with the middle digits of 73, 74, 75, 76, 77, 81 or 82 (For example: 9NN-73-NNNN) need to renew their ITIN in 2018, as these ITINs are about to expire. This renewal is required even if the ITIN has been used to file a U.S. income tax return in the last three years.
Having said that, if a taxpayer has NOT used their ITIN within the last three years but will be filing a U.S. income tax return in 2018, they should also consider applying for the renewal of their ITIN, regardless of the middle digits. ITINs not used in the last three years are automatically considered expired by the IRS.
U.S. Individual Tax Identification Number (ITIN)
U.S. Individual Tax Identification Number (ITIN) are issued to non-resident U.S. taxpayers, who need to comply with U.S. taxes but do not have nor qualify for a Social Security Number (SSN).
ITIN Expiration and Renewal Process 2018
In earlier years, ITINs came with no expiration date. Starting in 2016, 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, or with specific middle digits will be expiring on a yearly basis.
ITINs with middle digits 73, 74, 75, 76, 77, 81 or 82 will be expiring by the end of this year, i.e. December 2018. Therefore, taxpayers with these ITINs expecting to file a U.S. income tax return in 2019 should consider renewing their ITIN at their earliest to avoid any issues while filing their tax return or prevent delays in obtaining their tax refund. In addition, ITINs that have not been used in any of the last 3 years, i.e. in 2017, 2016, and 2015 will also expire in 2018.
Individuals with the above-mentioned ITIN numbers will be sent a CP-48 Notice informing them about the expiring ITIN and renewal process.
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, however, they are still required to note a valid reason for needing an ITIN on the Form W-7.
The completed Form W-7 can be submitted to the IRS using any of the following options:
- Mail it to the IRS, along with original identification documents or copies certified by the agency that issued them, to the IRS address listed on the Form W-7 instructions. Once, the IRS reviews the identification documents, they will return the documents by mail. This, generally, takes 60 days.
- If you feel that you may need some help filing the Form W-7, you could consider using the services of a Certified Acceptance Agent (CAA), who is authorized by the IRS to help taxpayers apply for an ITIN. A certified agent can verify all the documents for all the ITIN applicants before submitting them to the IRS.
- Lastly, the individual could call a designated IRS Taxpayer Assistance Center to have the ITIN application submitted and be identified in person instead of mailing original identification documents to the IRS. However, do not forget to schedule a meeting in advance.
Note that, a foreign passport with no date of entry into the U.S. no longer qualifies as an acceptable identification document for dependents from nations other than Mexico and Canada, or dependents of U.S. military personnel overseas. Every dependent’s passport must have a date of entry stamp, or U.S. medical records for children under age 6, school records or children above 6. Children above age 18 can use U.S. bank statements, utility bills, or any other document that has their name and a U.S. address.
ITIN Renewal of Family Members & Dependents
Family members, such as spouses or other qualifying dependents may also apply for ITIN renewal with the individual who has received the CP-48 Notice.
Spouses and dependents residing outside the United States do not need to renew their ITINs unless they anticipate claiming a tax benefit or if they file their own tax return. This is because the Tax Cuts and Jobs Act suspended the deduction for personal exemptions for tax years 2018 through 2025.
In conclusion, consider applying for your U.S. ITIN renewal at your earliest to avoid any last-minute panic and errors, such as missing information or documents, incomplete Form W-7, which could further delay the ITIN renewal. It is highly recommended that the individual consults an IRS ITIN certified agent to ensure smooth processing of the Form W-7.
After two years of carrying out ITIN renewals, in the third year, the IRS has increased the number of staff to handle the anticipated influx of W-7 applications for renewal. Furthermore, the 2018 ITIN renewal process for 2019 Tax Season will be beginning earlier than last year (2017 ITIN renewal).
Last but not the least, if in doubt contact your tax practitioner for assistance and clarification.
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.