In the previous posts of this series we discussed what an Individual Taxpayer Identification Number (ITIN) is and how to obtain one. Today we will discuss the new ITIN expiration rules and how to renew your ITIN if it expires.
ITINs that have not been included on a U.S. federal tax return at least once in the past three tax years are no longer valid as of January 1, 2017. Additionally, ITINs that have certain middle digits will expire. Middle digits are the fourth and fifth digits of the number, for example: xxx-78-xxxx. ITINs with the middle digits of “78” and “79” have expired as of January 1, 2017.
If you have a filing obligation for tax year 2016 and your ITIN has expired, you need to take action to renew it. If you use an expired ITIN on a U.S. tax return, the return will be processed and treated as timely filed, but it will be processed without any exemptions and/or credits claimed and no refund will be paid at that time. The IRS will issue a notice explaining the delay in any refund and to inform you that the ITIN has expired.
The process of renewing an ITIN is similar to the process of applying for one. You must submit a completed Form W-7, Application for IRS Individual Taxpayer Identification Number, and all required identification documents to the IRS. See our previous post for qualifying supporting documentation and how to obtain certified copies. However, unlike the application process for a new ITIN, if you do not have a filing requirement you do not need to submit the W-7 with a tax return. If you do have a filing requirement, it is recommended you file the tax return with a completed W-7 to prevent a delay in processing your refund, if applicable.
As with the original application process, you can mail your W-7 to the IRS or renew your ITIN in person at a designated IRS Taxpayer Assistance Center. When completing Form W-7 it is crucial to check the box at the top of the form that says “Renew an existing ITIN”.
Determining if you need an ITIN, applying for a new ITIN, and renewing an existing ITIN can be a complicated process. More information can be found on the IRS website and it is recommended you enlist a tax professional to assist you along the way.