The Internal Revenue Service reminds taxpayers about the Individual Taxpayer Identification Number (ITIN) expiration. The ITIN renewals are required by the Protecting Americans from Tax Hikes (PATH) Act that was enacted by Congress in December 2015. Under new legislations, ITINs are set to expire starting October 1, 2016, and will have to be renewed periodically.
ITINs are issued by the IRS to individuals that are not eligible to obtain a Social Security Number, but need to satisfy U.S. tax obligations and file U.S. tax returns. This mostly includes foreign individuals who reside outside of the U.S. and have income effectively connected with a trade or business in the United States, investors in US Partnerships, spouses of Foreign Workers residing in the US, etc.
The renewal program affects two key groups of ITIN holders:
- Individuals who have not used their ITINS on a federal tax return at least once in the last three years, and
- Individual(s) whose ITINs were issued prior to 2013 and have been used to prepare tax returns.
For the first group taxpayers, the renewal period began October 1, 2016. ITINs that were not used in 2014, 2015 or 2016 will expire on December 31, 2017. For the second group, ITINs that expired in 2016 are those with middle digits of 78 and 79. ITINs that will expire at the end of 2017 are those with middle digits of 70, 71, 72 or 80.
The other main point to consider is that ITINs have to be renewed only if an individual will have filing requirements in 2018.
To renew an ITIN, the taxpayer(s) must complete Form W-7, Application for IRS Individual Taxpayer Identification Number (Form W-7SP for Spanish language version), which was updated in September 2016. To simplify the renewal process, under the updated version the IRS does not require individuals to attach a tax return to the form. Submission of the application can be done in one of three ways:
- Mailing to the IRS address listed on the form’s instructions,
- Submitting it through the IRS Authorized Acceptable Agents or
- Scheduling an appointment with an IRS Taxpayer Assistance Center.
In addition, the family option for ITIN renewals allows one family member to include other family members whose ITINs will expire at a later date and choose to renew the ITINs for an entire family (which includes spouse and dependents) at the same time.