Do you have an Individual Taxpayer Identification Number (ITIN)? It may be time to renew. Many ITINs expired on December 31, and if you’re planning to file a tax return for 2020 income, you need to act fast to get that number renewed and avoid delays in processing.
The Internal Revenue Service (IRS) should send a notice when your ITIN is going to expire. That will happen on the last day of the calendar year if the ITIN hasn’t been used on a tax return for three years, which could happen if you didn’t file a tax return or weren’t included as a dependent by another taxpayer over that time. Here is what you need to know about ITINs and how to keep them current.
What Is an ITIN?
Every taxpayer has an ID number of some kind. American citizens and others have Social Security Numbers. Businesses, even those without employees, may have an Employer Identification Number (EIN). The IRS uses the ITIN as an ID for some nonresident and resident aliens, their spouses, and dependents who need to file tax returns but are not eligible for a Social Security Number (SSN). The ITIN is nine digits long, begins with the number “9,” and it’s formatted like an SSN (i.e., 9876-54-321). An ITIN does not:
- give a person permission to work in the United States
- qualify their dependents for Earned Income Tax Credits
- provide access to Social Security benefits
Immigration status does not affect someone’s ability to get an ITIN because both resident and nonresident aliens, including international students, may need to file taxes. If you’re not sure if you or your family need an ITIN, the IRS has an interactive questionnaire that can help determine your status and what you need to do next. To complete it, you’ll need to know the type of visa you have and the reason you think you or your dependent needs an ITIN. If in doubt, it’s always best to speak to a qualified tax professional before proceeding.
How Can You Renew Your ITIN?
Renewing your ITIN is a three-step process. It’s like any application for federal documents: Gather your proof documents, fill the form out, and submit it to the IRS. Here is what that should look like.
Step 1: Gather the Required Documentation
The IRS requires that you fill out Form W-7 to request an ITIN. You will need documentation that establishes your identity and foreign status. There are several documents that take care of both elements, including your passport, U.S. Department of State-issued visa, and the U.S. Citizenship and Immigration Services photo ID.
Combinations of other documents can establish both identity and foreign status as well, including driver’s licenses, military IDs, national ID cards, birth certificates, school records, and more. At least one item must contain a photo for adults.
All documents must be originals or certified copies from the originating office. You probably don’t want to be separated from your passport or driver’s license for long, so it’s best to plan ahead and get copies of these documents ahead of time for this purpose.
Step 2: Complete Form W-7
IRS Form W-7 is required to apply for a new ITIN or renew one. The IRS website provides detailed instructions for completing it, including the list of required documents to establish identity and status.
Include your full name, mailing address, foreign address, information about where and when you were born, your citizenship, U.S. visa, and a few other basic items. You will be asked if you’ve ever had an ITIN before and, for a renewal, to enter your current or recently expired ITIN on the form. Students, professors, and researchers must also include information about the college or university they’re affiliated with.
Step 3: Submit the Form
The ITIN requires Form W-7, so it cannot be submitted online. The forms are available as PDFs that can be filled out electronically, but you will have to print and sign them to be submitted.
Once you’ve completed the form and have your documentation, you can mail it to the dedicated IRS ITIN address in Texas. You can also apply in person at an IRS-authorized certifying acceptance agent or a designated IRS Taxpayer Assistance Center. Both of those options mean you won’t have to mail your documentation and wait 60 days for it to be returned to you.
Regardless of how you submit your renewal form, the IRS will mail your number info and status to you.
Common Pitfalls When Renewing Your ITIN
Tax matters are complicated. It’s easy to make mistakes when during the process, especially when it comes to making sure you file correctly and with all the right information. What are some of the most common mistakes people make when it comes to their ITIN renewal?
1. Letting It Expire
The good news is that you CAN file your taxes with an expired ITIN. The IRS will not consider your return late, even if you file with an expired number. The downside is that you will not get any tax refund you may be entitled to.
2. Filling Out Form W-7 Incorrectly
It is critical that every piece requested is complete and accurate on the application form. That includes the reason for applying, the number being renewed, the complete foreign address (if you’re a non-resident), and all the supporting documentation. Remember that all documentation must be originals or certified copies. A tax professional can help you ensure everything is in order before mailing the W-7.
3. Failing to Attach a Tax Return to the Application
Not everyone needs to file a tax return with their ITIN renewal application, but if you’re renewing the ITIN for your spouse or dependents, that can only be done when you file the return claiming them as dependents. You don’t need to attach a tax return if you’re just applying for your own ITIN.
Getting the Help You Need With ITIN Renewal
If this sounds overwhelming, help is available! You shouldn’t wait to take action on your ITIN renewal. The process takes time, and it’s better to get professional assistance than to risk making potentially costly mistakes.
Trust the professionals at Silver Tax Group to answer your questions about this important tax document. Contact us with your ITIN renewal questions today.
