As we approach the end of the year, individuals with ITINs need to be aware that several are scheduled to expire by December 31, 2020. Renewing and obtaining an ITIN can be a very tedious and long process, so it is important to do so promptly. Get informed, and do not wait until the last minute to renew yours today. Here is some information to help you get started.
What is an ITIN and who needs one?
An ITIN is an “Individual Taxpayer Identification Number” issued by the IRS for individuals who cannot obtain a social security number and are required to report a Tax ID when filing tax returns or claiming treaty benefits. You may use the IRS Interactive tax assistance tool to check eligibility requirements if you are still not sure.
How to apply or renew an ITIN?
To remain in compliance with the U.S Tax laws, an individual will need to complete IRS Form W-7 to apply for a new ITIN or renew an existing one. Additionally, one must submit documentation of their legal status and identity to support the information provided on form W-7. Documents can be sent via mail, done in person, or an authorized “acceptance agent” may be able to assist you with this process. Since mailing documents and getting them back non only takes time but also applicants do not want to mail their originals, many ITIN applicants opt to do it with an authorized agent. Look online for the list of agents. The IRS has lots of ITIN resources for applicants on their website, including a just-released ITIN Expiration Frequently Asked Questions.
ITINs expiring December 31st, 2020:
- ITINs not used in the last three years
- ITINs issued prior to 2013 with middle digits of 88, 90,91,92,94,95,96,97,98 or 99 (Example: XX-88-XXX)
When is the right time to renew an ITIN?
If an ITIN is scheduled to expire, an individual may renew immediately. Again, this is highly encouraged for ITINs expiring December 31, 2020, and for individuals who plan to file a tax return in 2021. If an ITIN is not scheduled to expire, then no further action is needed until the scheduled date of expiration approaches.
What happens if an ITIN is not renewed on time?
An individual with an expired ITIN may still file their tax return. However, it will be “subject to interest and penalties for any tax owed” and will not be eligible to receive any refunds. Once renewed, the IRS will reassess any disallowed exemptions and credits and issue refunds owed to the taxpayer. It is essential to renew an ITIN on time to prevent such delays.
What next?
If your ITIN is expiring at the end of this year, wait no longer. Renew immediately. If you have any further questions or concerns, please reach out to your ATKG advisor at 210.733.6611 or email us today at info@atkgcpa.com. Our team of tax professionals is always here to help!
Andrea Rodriguez began her career with ATKG as an intern and currently works part-time as she finishes her studies at (TAMUSA) Texas A&M University – San Antonio. She received her accounting undergrad degree from TAMUSA in 2018. She is scheduled to receive her master’s in professional accounting from TAMUSA in December of 2020.
