ITIN Updates and Changes: What's New in the Online Application Process?

November 21, 2023
2 min read
New ITIN Changes 2024

Obtaining an Individual Taxpayer Identification Number (ITIN) is a crucial step for non-U.S. residents and citizens seeking to comply with U.S. tax laws. However, the process of applying for an ITIN has undergone some significant updates and changes in recent times. Keeping up with these changes is essential for a smooth and successful application experience.

1. Moratorium on the Acceptance Agent Program

The Internal Revenue Service (IRS) imposed a moratorium on the Acceptance Agent Program beginning August 15, 2022, which is expected to last until the end of 2023. This temporary pause is part of the IRS's efforts to modernize the program, aiming to make the application process more efficient and reduce processing times from months to weeks.

During this period, the IRS will not accept Form 13551, the Application to Participate in the IRS Acceptance Agent Program. This change affects both new applicants and those seeking to renew their agreements.

2. Changes for Acceptance Agents and Certifying Acceptance Agents

If you're an existing Acceptance Agent (AA) or Certifying Acceptance Agent (CAA) with an agreement valid beyond December 31, 2022, you need not take any immediate action. However, those needing to renew their agreements had to submit their applications before the moratorium started on August 15, 2022. The IRS is currently returning any new applications for AA or CAA received after this date.

3. ITIN Holders and Online Account Access

In a bid to enhance accessibility and convenience, ITIN holders now have the ability to access their IRS online account. This new feature allows you to manage your tax-related matters more efficiently. However, it's important to note that the registration process requires identity verification through video chat, a valid email address, proof of your ITIN, and the submission of primary and secondary documents for identity confirmation.

4. Form W-7 Applications and U.S. Federal Tax Return

One of the most significant changes introduced by the IRS is the requirement that all Form W-7 applications, including renewals, must be accompanied by a U.S. federal tax return unless an exception applies. This emphasizes the importance of attaching the relevant tax return with your ITIN application, as it serves as proof of your tax filing obligation.

5. Expanded Discussion of Allowable Tax Benefits

To provide greater clarity to applicants, the IRS has expanded its discussion on allowable tax benefits in the Instructions for Form W-7. This section offers valuable guidance on the tax benefits you may be eligible for when applying for an ITIN.

6. Child and Dependent Care Credit

The IRS has introduced a new provision that allows an ITIN to be assigned to an alien dependent from Canada or Mexico if they qualify a taxpayer for a child or dependent care credit. To take advantage of this provision, you must attach Form 2441 to Form W-7 along with your U.S. federal tax return.

7. Expiry of ITINs

ITINs that weren't used on a U.S. federal tax return at least once for tax years 2020, 2021, and 2022 will expire on December 31, 2023. This includes ITINs with certain middle digits. If you only use your ITIN for information returns and do not require it for a future U.S. federal tax return, renewal is not necessary.

8. Updating Mailing Address

Ensuring that the IRS has your current mailing address is crucial, as it's used for mailing ITIN notices and returning original supporting documentation. If you move before receiving your ITIN, updating your address with the IRS is essential to avoid any delays or complications.

9. Reopening of the CAA Program

The IRS plans to reopen the Certifying Acceptance Agent (CAA) program in late 2023. This program helps organizations assist taxpayers in obtaining ITINs by certifying their identity and documentation. While the reopening date hasn't been announced yet, the IRS will provide advance notice to the public, allowing interested parties to prepare for the program's relaunch.

These changes and updates are part of the IRS's continuous efforts to improve the ITIN application process and make it more efficient for applicants. By staying informed about these developments, you can navigate the application process with confidence and increase your chances of a successful outcome.

Remember, obtaining an ITIN is not just a formality; it's a crucial step towards tax compliance and ensuring that you fulfill your legal obligations as a non-U.S. resident or citizen. If you're unsure about any aspect of the process, don't hesitate to seek guidance from experienced professionals or consult the comprehensive ITIN guide available on our website.

Stay vigilant, stay informed, and embrace the changes that the IRS has introduced to streamline the ITIN application process. With the right knowledge and preparation, you can navigate this journey seamlessly and enjoy the peace of mind that comes with being a responsible taxpayer.