Have an Individual Taxpayer ID Number? There Are Some Changes You Need to Know About

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Photo: 401kcalculator.org

At the end of last year, Congress passed a $680 billion tax package that made a number of tax credits permanent, including 2009 improvements to the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), and extended others for varying periods of time.

The legislation also created new requirements for immigrants who file their taxes in April 2017 with an Individual Taxpayer Identification Number (ITIN) for income earned in 2016 and beyond.

As explained in a recent webinar (slide deck below), ITINs issued after December 31, 2012 will remain in effect unless a taxpayer does not file taxes for three consecutive years. In this case, the taxpayer will need to revalidate their number. Taxpayers with older ITINs will also need to revalidate based on a schedule specified in the law.

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Now, more than ever, it is critical that immigrants understand these requirements and their obligations. The extent to which the Internal Revenue Service plans to notify taxpayers of the revalidation process and schedule is not known. ITINs not only allow immigrants to pay taxes but are needed in many instances to open bank accounts, obtain driver’s licenses, and tax documents can be used to establish proof of residency. For these reasons and many more, NCLR asks its Affiliate Network and partners beyond to let friends, family, and clients know about the new revalidation timeline and process.

ITINs issued before January 1, 2013 will remain in effect until whichever comes first:

  • A taxpayer does not file for three consecutive years
  • ITINs issued before January 1, 2008 must revalidate by January 1, 2017
  • ITINs issued in 2008 must revalidate by January 1, 2018
  • ITINs issued in 2009 or 2010 must revalidate by January 1, 2019
  • ITINs issued in 2011 or 2012 must revalidate by January 1, 2020

To summarize: if any ITIN filer does not pay their taxes for three consecutive years, the taxpayer must revalidate their number. If taxpayers with older ITINs file each year, then they must revalidate by the date specified in the law.

The law specifies that taxpayers can apply for an ITIN in person, by mail, or at a Certified Acceptance Agent by providing original documents. The law does not specify what the process for revalidation will require. For example, it is not known if taxpayers will need to reapply for an ITIN by resubmitting all original documentation, if they will receive a new number or simply continue using their existing number, and more.

What is clear is that if a taxpayer does not understand these requirements, they could risk losing all of their CTC.

If someone with an ITIN issued before 2008 files their taxes in April 2017 without revalidating, those tax filings will be rejected. The taxpayer will need to revalidate their ITIN and refile their taxes. At this point, the individual will no longer be eligible for the CTC.

Decoding the Tax Deal: What It Means for Latinos and What Lies Ahead

Photo: http://401kcalculator.org, Creative Commons

Photo: http://401kcalculator.org, Creative Commons

With the New Year just around the corner, many of us are working to finish projects and tie up loose ends before heading off on vacation. Congress just did the same. Before leaving for the year, Congress passed a $680 billion tax deal making a number of credits permanent, including improvements to the refundable Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) that were set to expire in 2017.

The CTC and EITC help keep low-income working Latino families out of poverty. Because of this legislation, about four million Latino working families, including nine million children, will not lose any of their tax credits. The EITC amounts to as much as $6,143 per family, while the CTC can add up to $1,000 per child. These credits are especially valuable to the Latino community because more than 40 percent of Latino workers earn poverty-level wages.

Even as we celebrate this victory, we are concerned by a number of restrictions targeting hardworking immigrant taxpayers. Some of these changes in the law will keep some from receiving credits and make it harder for other immigrants to access credits for which they are eligible. For example, anyone who receives a new Social Security number (SSN), regardless of immigration status, cannot claim the EITC retroactively (a process called “look-back”) after April 15, 2016. Most other filers remain eligible to claim their EITC for up to three previous years. The previous law allowed people with new SSNs to claim the EITC retroactively as well. Another change targeting immigrants is the fact that anyone who receives a new Individual Taxpayer Identification Number (ITIN) cannot claim the CTC or AOTC retroactively after April 15, 2016.

Other changes may result in challenges for immigrants that depend on an Individual Taxpayer Identification Number (ITIN) to pay taxes and receive credits available to workers. Some of these changes are based on guidance on the ITIN application process issued by the Internal Revenue Service in 2012. Since then, there has been a drop in ITIN applications, leaving some to wonder whether the guidance is making it too hard to get an ITIN. One of these changes includes the requirement for new ITIN recipients to reapply on a recurring basis to keep their ITIN. There are processing delays for ITIN applications under the current system; adding ITIN revalidation could worsen those delays and keep hardworking Latino immigrants from credits available to them.

The dedication and work of NCLR Affiliates and partners helped to successfully push for Congressional action to make tax credits for working families permanent. More work lies ahead to make sure the Latino community can maximize credits under the new law. The lead up to tax season offers the opportunity to make sure Latinos know their eligibility and how to claim credits successfully. There will also be a need to help ensure the new ITIN requirements are implemented fairly and effectively. To that end, the Latino community should be prepared to work with the Treasury Department on implementation. These and other efforts will help make sure now-permanent tax credits continue to make a difference in the lives of millions who are working but still struggling to get by.

For more information about the new tax package and its impact on Latinos read our new fact sheet—The Congressional Tax Package and Latinos: What You Need to Know.

Weekly Washington Outlook — December 14, 2015

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What to Watch This Week:

Congress:

House:

On Monday, no votes are expected.

On Tuesday, the House will consider the following under suspension of the rules: 

  • R. 3654– Combat Terrorist Use of Social Media Act of 2015, as amended (Sponsored by Rep. Ted Poe / Foreign Affairs Committee)
  • Res. 536– Supporting freedom of the press in Latin America and the Caribbean and condemning violations of press freedom and violence against journalists, bloggers, and individuals exercising their right to freedom of speech (Sponsored by Rep. Albio Sires / Foreign Affairs Committee)

On Wednesday and the balance of the week, the House will consider:

  • R. 3750– First Responders Passport Act of 2015, as amended(Sponsored by Rep. Darrell Issa / Foreign Affairs Committee)
  • R. 2241– Global Health Innovation Act of 2015, as amended (Sponsored by Rep. Albio Sires / Foreign Affairs Committee)
  • Concur in the Senate Amendment to R. 2297– Hizballah International Financing Prevention Act of 2015 (Sponsored by Rep. Ed Royce / Foreign Affairs Committee)
  • R. 3878– Strengthening Cybersecurity Information Sharing and Coordination in Our Ports Act of 2015, as amended(Sponsored by Rep. Norma Torres / Homeland Security Committee)
  • Concur in the Senate Amendment to R. 2820– Stem Cell Therapeutic and Research Authorization Act of 2015 (Sponsored by Rep. Chris Smith / Energy and Commerce Committee)
  • 1347– Electronic Health Fairness Act of 2015, as amended(Sponsored by Sen. Johnny Isakson / Energy and Commerce Committee / Ways and Means Committee)

The House will also be continuing negotiations on a tax extender package and omnibus spending bill.

Senate:

On Monday, confirmation votes are expected on the nominations of Alissa Starzak to be the Army’s general counsel, John Conger to be principal deputy under secretary of defense, Stephen P. Welby to be an assistant defense secretary, and Franklin R. Parker to be an assistant Navy secretary. A roll-call vote is expected only on Starzak’s nomination.

On Tuesday and the rest of the week, the Senate expects to also vote on a tax extender package and omnibus spending bill. The Senate also expects to debate and vote on a conference report for H.R. 644, which would revise customs procedures and duty laws.

White House:

On Monday, the president will travel to the Pentagon to chair a National Security Council Meeting on the counter-ISIL campaign and receive an update from President Obama’s national security team. After the meeting, the president will make a statement from the Pentagon Briefing Room.

On Tuesday, President Obama will deliver remarks at a Naturalization Ceremony at the National Archives.

On Wednesday, the president will attend meetings at the White House.

On Thursday, in advance of the holidays, President Obama will travel to the National Counterterrorism Center for a threat briefing. The president and his national security team will review efforts—across our entire government—to prevent attacks.

On Friday, President Obama will attend meetings at the White House. In the evening, the First Family will depart the White House en route Honolulu, Hawaii.

Also this Week:

Tax – It has been reported that a deal to make permanent the 2009 improvements to EITC and CTC, along with other provisions, is close and could be voted on this week.  Some House Democrats have been vocal in their opposition to the deal as described because it will not index CTC and has a hefty price tag.  It is thought some of these objections may be related to the status of negotiations with the omnibus spending bill.  However, news reports have also indicated that the package could include a delay of the Cadillac tax, a priority for labor unions and others. If a tax extender deal is not reached, Congress will likely vote on a two-year extension of a number of expired tax provisions; this option would not make any permanent tax policy changes.

Omnibus – Last week, Congress bought more time by passing a several-day continuing resolution set to expire Wednesday.  To meet this new deadline, legislation must be filed Monday in order to be voted on in the House on time.  It has been reported that riders remain problematic, some of which include tightening measures for the U.S. visa waiver program, lifting the crude oil export ban, blocking Syrian refugee resettlement in this country, striking down the Department of Labor’s fiduciary rule, and repealing the Environmental Protection Agency’s Waters of the U.S. rule.

Financial Services – There have been reports that legislation referred to as the “Jumpstart GSE Reform Act” could be included in the omnibus.  This legislation would prevent mortgage guarantee fees from being used to pay for other government spending and also prevent the Treasury Department from selling any of its preferred equity in Fannie Mae or Freddie Mac without Congressional approval for two years. Proponents say the bill would encourage Congress to take up housing finance reform, while opponents contest that the bill only serves to prolong the government’s conservatorship of Fannie and Freddie.

Child Nutrition – Last week, it was thought that a child nutrition reauthorization could be included in an omnibus.  This week, however, Hill staff have said that a number of issues remain in bipartisan negotiations between staff for Sen. Stabenow (D-MI) and Sen. Roberts (R-KS) making this outcome less likely. One of the issues still being discussed involves increased verification requirements for students participating in school meal programs.

Puerto Rico – Last week, Sens. Hatch (R-UT), Grassley (R-IA), and Murkowski (R-AK) introduced legislation to address Puerto Rico’s financial crisis.  At its core, this legislation would create a financial oversight authority and provide $300 billion in direct assistance.  It would also reduce the payroll tax for residents and pay for the proposal through an ACA fund for innovation and preventive care.  While some believe it is a positive sign that the GOP introduced a bill at all and view this as a starting point for further negotiation, many Democrats have heavily criticized the bill for its lack of a Chapter 9 provision allowing the island to restructure its debt.  While there was optimism this fall that a legislative fix for Puerto Rico could be included in an omnibus, Hill staff have reported this is increasingly unlikely.

This Week in Immigration Reform — Week Ending December 4

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Week Ending December 4

This week in immigration reform: NCLR joins Congressional leader to talk tax extenders; Coalition urges Supreme Court to hear administrative relief case; and USCIS unveils tool for navigating its website.

NCLR kept the community informed with staff quotes in the Las Vegas Sun, Latin Post, and Diario Las Americas.

NCLR calls on Congress to consider immigrant families in tax extender negotiations: As Congress looks to renew tax credits for businesses and working families in year-end negotiations, NCLR reminded lawmakers to include immigrant families in extensions of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Senator Robert Menendez (D-N.J.) joined NCLR and the National Immigration Law Center (NILC) on Tuesday to urge Congress to keep immigrant families eligible for credits which are proven to fight poverty, promote employment, and bolster the overall economy. “I have seen and I have fought against these attacks for several years, both in public and in private, and now I’m doing everything possible to ensure that immigrants and all working families have access to the CTC and EITC. A vote against these important family credits is a vote to increase the taxes on millions of working immigrant families,” said Senator Menendez, senior member of the Senate Finance Committee. Clarissa Martínez-De-Castro, Deputy Vice President of the Office of Research, Advocacy and Legislation at NCLR, added, “The EITC and CTC, first and foremost, reward hard work. Millions of American families deserve this hard-earned income boost, which many rely on to pay for basic expenses such as school supplies and child care. Renewing the improvements that were made to these programs is sensible policy that strengthens our workforce.”

NCLR joins over 200 organizations urging Supreme Court to hear president’s immigration executive action case: NCLR joined a coalition of 223 immigration, civil rights, labor, and social service groups filing an amicus brief urging the Supreme Court to hear Texas v. U.S., involving President Obama’s executive action on immigration. The brief shares personal stories from potential recipients of administrative relief, explaining how the two deferred action initiatives (DAPA and expanded DACA) would positively impact millions of community members currently residing in the United States. “The individuals profiled in the brief illustrate the havoc this case has wreaked on the lives of millions of immigrants who remain in legal limbo,” remarked Benjamin Johnson, executive director of the American Immigration Council, one of the organizations included in the brief. “We urge the U.S. Supreme Court to take up this case and give hardworking immigrant families the chance to live and work without fear of deportation.” An additional brief calling for similar Supreme Court action was filed by 216 Congressional Democrats this week, including Senate Minority Leader Harry Reid and House Minority Leader Nancy Pelosi.

DCist features work of NCLR Affiliate Carlos Rosario at International Public Charter School: In a profile of Chef Benjamin Velasquez, DCist shares the story of the Director of Food Services at Carlos Rosario and his work training aspiring culinary workers.  Chef Velasquez has worked at Carlos Rosario for 29 years and oversees two training kitchens that teach immigrant students about working in professional kitchens while working to earn a GED.  The students who hail from all over the world also increase their English skills and computer literacy skills. As the story notes, “Today, the school runs three teaching shifts—morning, afternoon, and evening for its 2,500-strong student body. Many of the students enrolled in Carlos Rosario also have full-time jobs. In addition to ESL training, students can pick from three career paths: culinary arts, health care, and technology. The program has graduated more than 50,000 immigrants from all over the globe, and continues to provide services after graduation.”

USCIS unveils “Emma” personal assistant: U.S. Citizenship and Immigration Services (USCIS) rolled out a new tool to make navigating its website easier this week. “Emma,” named after Emma Lazarus, who wrote the poem at the Statue of Liberty about helping immigrants, is a new computer-generated assistant designed to answer questions and provide assistance finding the right areas on the USCIS website. Currently available in English only, USCIS expects to add the feature to its Spanish website within the next few months.

Weekly Washington Outlook — November 30, 2015

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What to Watch This Week:

Congress:

House:

On Monday, the House will vote on legislation under suspension of the rules:

  • 611– Grassroots Rural and Small Community Water Systems Assistance Act (Sponsored by Sen. Roger Wicker / Energy and Commerce Committee)
  • R. 3490– Strengthening State and Local Cyber Crime Fighting Act (Sponsored by Rep. John Ratcliffe / Judiciary Committee)
  • R. 3279– Open Book on Equal Access to Justice Act, as amended (Sponsored by Rep. Doug Collins / Judiciary Committee)
  • R. 1755– To amend title 36, United States Code, to make certain improvements in the congressional charter of the Disabled American Veterans, as amended (Sponsored by Rep. Jeff Miller / Judiciary Committee)
  • R. 2288– To remove the use restrictions on certain land transferred to Rockingham County, Virginia, and for other purposes (Sponsored by Rep. Bob Goodlatte / Natural Resources Committee)
  • R. 1541– PRISM Act (Sponsored by Rep. Raul Grijalva / Natural Resources Committee)
  • R. 2212– To take certain Federal lands located in Lassen County, California, into trust for the benefit of the Susanville Indian Rancheria, and for other purposes (Sponsored by Rep. Doug LaMalfa / Natural Resources Committee)
  • R. 2270– Billy Frank Jr. Tell Your Story Act (Sponsored by Rep. Denny Heck / Natural Resources Committee)
  • 1170– Breast Cancer Research Stamp Reauthorization Act of 2015 (Sponsored by Rep. Dianne Feinstein / Oversight and Government Reform Committee)

The balance of the week, the House will consider the following:

  • R. 8– North American Energy Security and Infrastructure Act of 2015, Rules Committee Print (Subject to a Rule) (Sponsored by Rep. Fred Upton / Energy and Commerce Committee)
  • J. Res. 23– Providing for congressional disapproval under chapter 8 of title 5, United States Code, of a rule submitted by the Environmental Protection Agency relating to “Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units” (Subject to a Rule) (Sponsored by Sen. Mitch McConnell / Energy and Commerce Committee)
  • J. Res 24– Providing for congressional disapproval under chapter 8 of title 5, United States Code, of a rule submitted by the Environmental Protection Agency relating to “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units” (Subject to a Rule) (Sponsored by Sen. Shelley Moore Capito / Energy and Commerce Committee)

In addition, the House is expected to vote on the conference report to reauthorize the Elementary and Secondary Education Act and another conference report to reauthorize surface transportation programs.

Senate:

The Senate will vote on Monday evening on an executive nomination. Later in the week, the Senate may debate a revised version of House-passed budget reconciliation legislation.

White House:

While the White House did not release an official schedule this week, the president will be in Paris attending a climate summit.

Also this Week:

Education – The House will vote on a bipartisan conference report to reauthorize the Elementary and Secondary Education Act (last rewritten as No Child Left Behind) this week. The Senate is expected to follow next week. While the language, released Monday, clearly reflects a compromise, the provisions for English Learners are substantial. For the first time, ELs will be included in a state’s accountability system. The report also establishes standard entry and exit procedures for ELs, includes strong parent notification language, and creates new reporting requirements on ELs with disabilities and long-term ELs. That said, the accountability language delegates much to states and districts to ensure groups of students are meeting challenging goals.

Tax – The House Ways and Means Committee and the Senate Finance Committee this week will continue their negotiations over making certain business tax credits and expansions to the Earned Income Tax Credit and Child Tax Credit permanent. These credits were enhanced in 2009 as part of the stimulus, but these enhancements expire in 2017. An agreement could be reached in the coming days. However, it has been reported that any possible deal would include a number of “program integrity” provisions targeted at immigrants. Of the options mentioned in news accounts, one would require those applying for an Individual Taxpayer Identification Number (ITIN) to appear in-person; another would prohibit future DAPA recipients from retroactively amending their tax returns for up to three years to claim the EITC.

Appropriations – There are just two weeks left to pass a spending bill to fund the government beyond December 11. This week, Appropriators are expected to receive their 302(b) allocations, the topline amount for each agency. While the Administration has remained firmly opposed to all controversial policy riders, some lawmakers may still seek language to undermine Dodd-Frank, curtail refugee resettlement, and others.

Puerto Rico – On Tuesday, the Senate Judiciary Committee will hold a hearing on Puerto Rico’s financial situation. Puerto Rico’s Governor and the Resident Commissioner are both scheduled to testify. While the Judiciary Committee has jurisdiction over bankruptcy reform, Chairman Grassley has been reluctant to move forward without other fiscal and regulatory reforms on the Commonwealth. Also this week, Puerto Rican members of Congress including Reps. Velazquez (D-N.Y.) and Serrano (D-N.Y.) are assisting in coordination of a Puerto Rico Day of Action on December 2. Members and advocates will ask Congress to act to help address Puerto Rico’s financial and humanitarian situation.

Health – The Senate may take-up a revised version of House-passed budget reconciliation legislation to repeal parts of the Affordable Care Act, originally including the employer and individual mandates. However, the Senate Parliamentarian ruled that these provisions could not be altered in the reconciliation process, as they do not relate to revenue or spending. Under budget reconciliation, the Senate only needs a majority rather than sixty votes to move forward. In addition to the ACA provisions, the legislation would also block Planned Parenthood from receiving federal funding.

Immigration – The Senate Judiciary Committee will hold a hearing on Wednesday, “Oversight of the Administration’s Criminal Alien Removal Policies.” Elsewhere, it is possible the Senate may move in the coming days to take up legislation related to refugees. Additional House hearings on this subject are also likely.