I had the same issue as Santoz recently for a client for 2023. I had applied W7s for a spouse and 3 children. IRS approved ITIN for the spouse and processed the return but rejected ITIN for the children. One of the reasons they gave on the rejection notice was that they were listed on the tax return but were not claimed for any allowable tax benefit. My client's income was low that they had no tax liability. I prepared the tax return on Proseries and without an ITIN no or social security no. it will not mark the box for 'credit for other dependents'. For my client, even if I marked it manually, I am not sure that they would have approved since there was no tax liability. But for the state, kids would have exemptions for qualified dependents. Without them qualified on the federal return, I decided to file the state without the children and in 2024 I will apply for ITIN for the kids on new W7 and going to manually mark the other dependents credit box and file in 2024 tax return. When they hopefully get the ITIN next year, I plan to amend the 2023 state return in 2025.
I am curious what happened with Santoz's 2020 amended return in 2021. Did they approve the ITIN numbers then?
