Imagine the stress of filing your federal tax return, only to find out that your Individual Taxpayer Identification Number (ITIN) has expired. What does this mean for you?
This unexpected obstacle can lead to delays, missed tax credits, and other complications with the IRS. You would need an ITIN only if you are a non-U.S. resident, a foreign national with U.S. income, or a dependent or spouse of a U.S. citizen without a Social Security Number (SSN).
But why is it necessary? It helps you stay compliant with tax obligations, ensures smooth filing of taxes, and safeguards you against potential penalties.
Now, if your next question is, ‘’Do ITIN numbers expire?’’ the answer is yes, they do. An ITIN can expire if you haven’t used it on a U.S. tax return for three consecutive years, if there are new IRS rules, or if it’s an older ITIN with a specific expiration date.
Timely renewal of your ITIN is what you have to do to avoid such a situation. It ensures you’re always prepared, compliant, and managing your finances well. Wondering how to renew your ITIN number? Read along to learn more about the ITIN renewal process so you don’t experience any difficulty in the next tax season.
Also Read: Foreign Tax Credits: Strategies & Limits (SWAT Advisors)
What is an ITIN Number?
An ITIN is a tax processing number issued by the Internal Revenue Service (IRS) in the United States. It is a nine-digit number, formatted similarly to a Social Security Number, but it is specifically designed for individuals who need to file taxes or fulfill tax reporting obligations but are not eligible to obtain an SSN.
Who is Eligible for ITIN and Why is it Used?
ITINs are primarily used by non-resident aliens, their spouses, and dependents who do not qualify for a Social Security Number but need to report their income for U.S. tax purposes. The ITIN is exclusively used for federal tax reporting purposes and does not grant individuals the right to work in the U.S. or make them eligible for Social Security benefits or Earned Income Tax Credits.
When an IRS ITIN expires, it means:
- You can’t use it to file your tax return, which can cause delays and issues with processing returns.
- You might miss out on valuable tax credits and tax deductions you’re eligible for.
- You’re not meeting IRS regulations, which can lead to further complications with the IRS.
Keep track of your ITIN status, get a heads-up when it’s time to renew, and ensure the process stays simple and hassle-free.
A tax planning advisor helps make sure your tax strategy is solid, and a vital part of that plan is keeping your ITIN up-to-date. By renewing your ITIN on time, you can avoid potential delays and complications in your tax filings. Plus, it helps you to fully maximize all the tax deductions and credits you’re entitled to. This is more than just a recommended practice—it’s a key element in comprehensive tax planning solutions.
Why do you Need an ITIN number?
You need an ITIN for the following reasons:
- Filing U.S. Taxes: If you are required to file a U.S. tax return but do not have a Social Security Number (SSN), an ITIN allows you to comply with U.S. tax laws.
- Claiming Tax Benefits: An ITIN is necessary to claim certain tax treaty benefits or credits, such as the Child Tax Credit or the Earned Income Tax Credit, if you do not qualify for an SSN.
- Opening a Bank Account: Some financial institutions require an ITIN to open a bank account or apply for a mortgage.
- Fulfilling Reporting Requirements: It is used to report income, file tax returns, and handle other financial matters with the IRS.
- Dependents and Spouses: If you are a dependent or spouse of a U.S. citizen or resident alien, you may need an ITIN to be included on their tax return.
How to Tell if Your ITIN Number Has Expired or is About to Expire?
Sometimes, the IRS sends out renewal notices for expiring ITINs. If these notices are missed or not received, you might not be aware of their expiration. For instance, if your ITIN wasn’t included on a U.S. federal tax return at least once for tax years 2018, 2019, and 2020, your ITIN will expire on December 31, 2021. To avoid missing the expiration, it’s a good practice to periodically check ITIN status. Here are some methods to check if your ITIN number has expired or is close to expiring:
Checking Recent Usage
If you haven’t used your ITIN on a U.S. tax return in the past three years, it might have expired. The IRS generally requires an ITIN to be used at least once every three years to remain valid.
Looking for IRS Notifications
The IRS may send you a renewal notice if your ITIN is about to expire. Make sure to keep an eye on your mail for any correspondence from the IRS regarding your ITIN number.
Reviewing ITIN Issuance Dates
If your ITIN was issued before 2013, it might need to be renewed from time to time. The IRS has special rules for these older ITINs, which often require you to renew them every few years. To avoid any issues keep an eye on updates from the IRS about ITIN renewals and follow any new guidelines they provide. This will help ensure your ITIN remains valid and updated.
Monitoring Changes in Tax Law
Tax laws and regulations change frequently. Keeping informed about current rules regarding ITIN validity and expiration can help you proactively manage your ITIN status. If you’re unsure about the status of your ITIN, consider consulting our tax planner in California (and beyond) for guidance.
Verify ITIN Status
The IRS provides resources and tools to check the status of your ITIN. Contact the IRS directly or use their online tools to verify if your ITIN is still active or if it requires renewal.
A Step-by-Step Guide: How to Renew Your ITIN Online?
You might by now know what an ITIN is, but may be wondering how to renew an ITIN number. Right? If you’ve received an IRS notice that your ITIN is about to expire, don’t put off the renewal process. Just like applying for a new ITIN, renewing it is straightforward if all the steps are followed accurately.
Step 1: Check If You Need to Renew
According to the TIGTA report, the IRS has issued 25.1 million ITINs since the program’s inception, 292,006 of which were issued during Calendar Year 2020. With a substantial number of ITINs issued each year, it is essential to renew yours on time to avoid disruptions. Don’t wait for the IRS to send you a notice. It’s a good idea to regularly check ITIN status to be on the safe side.
Step 2: Documents you Need
You need a government-issued photo ID to verify your identity. This could be a passport, driver’s license, or other acceptable forms of identification. A passport is often the preferred document as it serves both as proof of identity and foreign status.
If you are renewing your ITIN to file a tax return, include your completed tax return with the renewal application. This ensures that the IRS can process your renewal in conjunction with your tax filing. Here’s what documents you may need:
- Completed Federal Tax Return:
- Form 1040: U.S. Individual Income Tax Return
- Form 1040-SR: U.S. Tax Return for Seniors
- Form 1040-NR: U.S. Nonresident Alien Income Tax Return (if applicable)
Step 3: Complete Form W-7
- Get the Form: You are required to download Form W-7 from the IRS website.
- Fill it Out: Accurately complete the form with your personal information and reason for renewal. You need to select the reason for filing Form W-7 from the following options, choosing the one that applies to you:
- Nonresident alien required to get an ITIN to claim a tax treaty benefit
- Nonresident alien filing a U.S. tax return
- U.S. resident alien (based on days present in the United States) filing a U.S. tax return
- Dependent of a U.S. citizen or resident alien
- Spouse of a U.S. citizen or resident alien
- Nonresident alien student, professor, or researcher filing a U.S. tax return or claiming an exception
- Dependent or spouse of a nonresident alien holding a U.S. visa
- Other
- Use “N/A” Appropriately: If a particular field does not apply to your situation, write “N/A” in that space to indicate it is not relevant.
- Check for Validity: Double-check that all provided information is correct and valid. Errors or omissions could result in the suspension or rejection of your application. Additionally, you will also have to mention why do you need an ITIN number which will be discussed in later in this blog.
Do You Know?
If you’re renewing your ITIN and your legal name has changed, you’ll need to provide documentation to support the name change. This could include a marriage certificate, court order, or divorce decree. Be sure to attach the relevant documents to Form W-7 when submitting your renewal
Submit Your Application
Send Form W-7, your supporting documents, and any tax returns to the address provided in the form instructions. The IRS processes millions of ITIN applications each year, so timely submission is key.
Wait for Processing
The renewal process typically takes up to 11 weeks. With the IRS handling a vast number of applications, patience is essential. Keep a record of your submission and be alert for any IRS communication. After processing, you’ll get a confirmation of your renewed ITIN. Ensure this updated number is reflected in your tax records for future filings.
Common Mistakes to Avoid When Applying for or Renewing Your ITIN
To ensure a smooth application or renewal process for your ITIN, be mindful of these very common mistakes:
- Submitting Incomplete Forms: Double-check that every section of Form W-7 is filled out completely. Leaving fields blank or providing incomplete information can lead to delays or rejection of your application.
- Providing Invalid Identification Documents: Make sure all identification documents are current and valid. Using expired, incorrect, or unofficial documents can cause issues. For a passport, ensure it’s the original and meets the requirements. If not using a passport, provide a combination of documents that fulfill all the necessary criteria.
- Ignoring Submission Guidelines: Follow the IRS’s submission guidelines carefully. Ensure you mail your application to the correct address and include all required documents. Failure to adhere to these guidelines means that your application will be returned by the IRS.
Filing Taxes with an Expired ITIN: Is It Possible?
The IRS does not say that filing taxes with an expired ITIN is not possible. It says that a tax return filed with an expired ITIN will still be processed, but any tax credits or exemptions associated with the expired ITIN will be disallowed.
When a tax return is filed with an expired ITIN, the IRS typically sends Notice CP 567. This notice informs the taxpayer that:
- Certain tax credits or exemptions claimed on the return could not be processed due to the expired ITIN.
- The ITIN needs to be renewed for the taxpayer to claim these credits or exemptions in the future.
- The notice includes details on how to address the situation and provides instructions for renewing the ITIN.
Attempting to file with an expired ITIN can lead to delays in processing, rejection of your tax return, and missed tax credits or refunds. To ensure a smooth tax filing process, check ITIN status well before tax season and renew it if necessary.
A Quick Guide to Checking Your ITIN Status Online
If you are wondering how to check my ITIN status online, you will have to stick to the last. But why is checking ITIN status important? By regularly verifying your ITIN status, you can avoid these issues and make sure you’re eligible for all the tax benefits you’re entitled to, maintaining smooth and hassle-free tax management.
Visit the Official IRS Website
Start by visiting the official IRS website. This site is your go-to source for reliable and accurate information regarding your ITIN status. You can also take the help of a tax planning advisor to make it a breeze for you.
Locate the ‘Tools’ Section
On the IRS homepage, look for the ‘Tools’ section. This area provides access to the option to check ITIN status.
- Select ‘Verify ITIN Status: Within the ‘Tools’ section, find and select the link for verifying ITIN status. This action will direct you to a secure page where you can begin the verification process.
- Enter Required Information: You will be prompted to provide several pieces of personal information to proceed with the status check. Typically, you will need to enter:
- Your full name
- Your ITIN number
- Your date of birth
- Any relevant tax documents that may be required
Submit Your Request and Review the Status
After entering all necessary information, submit your request for ITIN status verification. The system will process your submission and display the current status of your ITIN, including whether it is active, expired, or pending renewal.
Save or Print the Confirmation Page
Once you receive the status update, it’s a good practice to save or print the confirmation page. This serves as official proof of your ITIN status and can be helpful for your records or if you need to reference it in the future.
Bottom Line
As we have come to an end, it’s clear that renewing your ITIN number is not just an option but a necessity. While renewing your ITIN cannot be done entirely online, the process is designed to protect your identity and ensure accuracy.
The IRS offers some digital tools to help, such as downloadable forms and online status checks, but the core renewal process still requires mailing or personally submitting physical documents.
If you qualify for an ITIN and submit a complete application, you should receive a letter from the IRS with your tax identification number within about seven weeks. This timeframe might extend up to 11 weeks if you applied during peak tax season (January 15 through April 30) or from abroad. If you haven’t received a response within this period, consider consulting a tax planning advisor with expertise in tax matters for assistance.
To stay ahead, start your ITIN renewal process early and follow IRS guidelines closely. This proactive approach ensures that you remain compliant without the hassle of last-minute stress or delays. By tackling ITIN renewal with patience and focus, a tax plaanner in California (and nationwide) can smoothly handle this important part of your financial responsibilities, keeping everything on track with ease.
