How do I get "credit for other dependent" when ITIN is "applied for"?

[puravidapto]

When I apply ITIN, I put in "Applied for" under the tax ID and no credit for other dependent was generated by the Proconnect Tax Online. The ITIN application will be submitted and expect to be issued before the filing deadline. Thanks.

[itonewbie · Accepted solution]

I see where you're coming from but I think the reason PTO doesn't compute ODC is that the dependent is not eligible for ODC unless an ITIN is issued on or before the due date.

According to Pub 972, the IRS does recognize ITIN issued after the due date so long as the application is submitted on or before the due date and one is issued as a result of the application.  If the W-7 is only submitted with the tax return, the dependent is still not eligible for ODC at the time of submission - until and unless the IRS subsequently issues one.

AFAIK, the IRS has not provided any clear guidelines for how such cases would be handled (unlike IR-2017-109, which clarifies that CTC would be restored automatically once an ITIN is renewed).  Your best bet might be to apply for an ITIN now, extend the return, and have your client settle any expected balance due by April 15.

[puravidapto]

I am not into the theory, but in practice the ITIN application will be rejected if credit for other dependent box is not check, or the credit is not claimed. The IRS rejection notice says:

We rejected your return because:

- You weren't listed on an attached U.S. federal income tax return, or

- You were listed as a dependent n an attached U.S. federal income tax return but were not claimed for any allowable tax benefit.

The PTO software does not do either of the two.

I contacted PTO. Initially they said as they always say that software was written according to the IRS rules, then I point out that the IRS will not reject its own rules, then they say they will look into it. I found it is very hard to follow up with the issue since there is no case management system accessible to customers, I do not know what you have looked, and what they have decided to do. The lack of track-abilities of the issues we reported is a major problem, all the software companies I know of, and some non-software companies as well, can manage the life cycle of a case.

[puravidapto]

I am glad you like my post. I have brought the issue to ProConnect team via email, and the issue is now resolved: you need to mark this dependent is applying for ITIN and qualify for credit.

When I post ProConnect issues here, I got a lot of flame saying this is user forum and they cannot solve the problem, and Intuit does not listen to us. However, I do need to get a confirmation this is a valid software issue before I bring the issue to the ProConnect team, and it does take someone like me to take the time and effort to communicate with ProConnect to get an issue resolved. Please see signature and vote for the idea.