This, from IRS Instructions for Form W-7:
To receive an ITIN for the first time. If you’re applying for a
new ITIN, complete and attach Form W-7 to your tax return when
you file the tax return for which the ITIN is needed.
You can’t electronically file (e-file) a return using an ITIN
in the calendar year the ITIN is assigned.
So you'll have to mail the return for the first time when you claim your mother-in-law:
Internal Revenue Service
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342
Instructions for W-7,
Application for ITIN
Form W-7
Wait to file your amended 2016 until you receive her ITIN. I can't find anything on whether you can amend for a retroactive W-7. I'm thinking not, but you can try.
