The IRS has announced procedures to renew Individual Tax Identification Numbers (ITINs) to reflect the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). The IRS also updated its online frequently asked questions (FAQs) about ITINs.
Take away. Only ITINs scheduled to expire at the end of the year and that need to be included on a U.S. tax return in 2017 should be renewed now, the IRS instructed. To assist taxpayers, the IRS has developed a rolling renewal schedule.
Background
Individuals filing a U.S. tax return are required to provide their taxpayer identification numbers on the return. Generally, a taxpayer identification number is the individual’s Social Security number (SSN). In the case of individuals who are not eligible to be issued an SSN, but who still have a tax filing obligation, the IRS issues ITINs.
Under the PATH Act, any ITIN not used on a federal tax return for three consecutive tax years, either as the ITIN of an individual who files the return or as the ITIN of a dependent included on a return, will expire on December 31 of the third consecutive tax year of nonuse. This rule applies to all ITINs regardless of when the ITIN was issued. For ITINs issued before 2013, the PATH Act provides that ITINs will no longer be in effect according to a certain schedule, unless the ITIN has already expired due to nonuse for three consecutive years.
Unused ITINs
ITINs not used on a federal income tax return in the last three years (covering 2013, 2014, or 2015) will no longer be valid to use on a tax return as of January 1, 2017. ITIN holders in this group who need to file a tax return next year will need to renew their ITINs. The renewal period begins October 1, 2016.
Expiring ITINs
The first ITINs that will expire under the schedule are those with middle digits of 78 and 79. The renewal period for these ITINs begins October 1, 2016.