If you have clients who do not have a Social Security Number, they can file Form W-7 to request an Individual Taxpayer Identification Number (ITIN). This nine-digit number is used for tax processing only. Your client must have a federal filing requirement and must not be eligible for a Social Security Number to receive a temporary ITIN.
The diversity of ITIN holders almost guarantees that a few are already in your client base. As a tax professional, you are offering a vital service to these taxpayers in your communities by assisting with the Form W-7 ITIN application and renewal process at tax time.
Which clients are eligible for an ITIN?
Residents and nonresidents of the United States can obtain an ITIN regardless of their immigration status. A few examples of taxpayers who might need an ITIN include:
- Dependents/spouse of a nonresident with a Visa
- Resident aliens who have a filing requirement because of the number of days they were residents in the U.S.
- Nonresidents who have a filing requirement
- Dependents/spouse of a U.S. citizen or resident alien
- Taxpayers who live abroad
How does a taxpayer apply for an ITIN?
Your clients can apply for an ITIN at the time of preparation, making your office an important stop for taxpayers seeking to improve their quality of life. The complete Form W-7 with proof of identity and foreign status documents must be submitted along with the tax return. Your clients will receive their ITINs in the mail after their applications are approved. The approval process usually takes about seven weeks.
To request this identification number, the taxpayer must submit Form W-7 Application for IRS Individual Taxpayer Identification Number. Then they must attach it to their Form 1040 and mail it to the IRS. Form W-7 can’t be e-filed. Each taxpayer included on a return that requires an ITIN must complete a separate W-7.
Taxpayers will need the following information to complete Form W-7 and apply for an ITIN:
- Name
- Birth name
- Date of birth
- Place of birth
- Passport, driver’s license, or other identification documents
- Original or certified copies of foreign status or immigration documents
This application must be mailed in or must be filed at an IRS tax assistance center or an authorized acceptance agent.
Note: The IRS does not charge a fee to file Form W-7 or apply for an ITIN. However, tax preparers may choose to charge a fee for assisting clients applying for ITIN, depending on your office policies and services provided. Clients may also elect to hire a Certifying Acceptance Agent (CAA), an IRS-approved agent who specializes in verifying documents the IRS needs to process the ITIN application. The fees associated with hiring a CAA will vary from agent to agent.
How to help your clients renew an ITIN
Missing information in the W-7 or insufficient supporting documents cause snags in the ITIN renewal process. Make sure that you and your clients review these common oversights that can delay applications:
- Complete a new Form W-7 and submit it with original supporting documents or certified copies. Include the ITIN already assigned to the client, the name under which it was issued, and official documents regarding name changes, if applicable.
- Select the reason for the client needing an ITIN when applying on Form W-7.
- Include a complete foreign address if the client is a non-resident alien.
- Always attach the Form W-7 application to the appropriate federal tax return.
What are the benefits of an ITIN?
While an ITIN does not provide legal immigration status or work authorization for the I-9 form, it does bring the taxpayer other benefits. For example, if the taxpayer becomes eligible for Social Security by becoming a lawful permanent resident, their ITIN earnings may be counted towards their total earnings for these benefits.
Also, some ITIN holders that meet income requirements are eligible to claim the Child Tax Credit. Your clients may see a tax refund from this refundable credit. They might also qualify for the Family Tax Credit, which is nonrefundable but can lower their tax liability. To claim these credits, each qualifying child must have a valid ITIN issued by the tax return due date.
Tax returns filed with an ITIN can also be used to prove residency in the U.S. For example, the ITIN is sufficient in some states to obtain a driver’s license, permit, or state ID card. Your clients may also use their ITINs to open bank accounts.
When is the ITIN application due?
Like a normal tax return, an ITIN application is due on April 15th on the normal filing day. If your client waits and submits their application late, they may incur interest or penalties.
How long will it take to process a tax return filing with Form W-7?
Once the taxpayer’s application has been received by the IRS, it usually takes about 7 weeks to process. Usually, taxpayers will be notified of their status within 10 weeks at most. Taxpayers can check their status by calling the IRS at 800-829-1040.
Does an ITIN expire?
Yes, ITIN numbers do expire. Over 2 million taxpaying households have an ITIN that will expire this tax season. Any ITIN that has not been used on a tax return in the past three years will need to be renewed.
Filing a return with an expired ITIN will significantly delay that return’s acceptance and any refunds due. The IRS is recommending that anyone who may be affected complete their renewal application as soon as possible to avoid processing delays.
Get answers from the IRS most frequently asked questions on expiring ITINs.
