Deductions & credits

Hi Omartine,

In the article that you posted, there are some questions that apply to dependents who are qualifying children and some that apply to qualifying relatives. Generally, qualifying children will be eligible for a Child Tax Credit while qualifying relatives would only be eligible for a "Other Dependent Credit" which is up to $500 per dependent. Both of these credits - the Child Tax Credit and Other Dependent Credit - are limited by your modified adjusted gross income. If you filed a joint return with your wife and your MAGI was more than $400,000 then the credits are phased out - potentially to $0.

But, even if your daughters would otherwise be your qualifying children, they do not qualify for the higher Child Tax Credit because they did not have social security numbers assigned before the due date of your 2022 return.

Based on the information you provided in your follow-up post, your daughters could have qualified you to potentially receive the "Other Dependent Credit" for them.  In your case, with a maximum potential credit of $1,000, the credit would have been entirely phased out if your MAGI was $420,000 or higher.

Regarding the issuance of an ITIN: For tax years beginning after 2017, spouses or dependents aren’t eligible for an ITIN unless they qualify for an allowable tax benefit. Your wife qualified for an ITIN because filing a joint return doubles the standard deduction allowed on your return. This reduction in taxable income is a tax benefit.

Your daughters -- if they qualified for the Other Dependent Credit and that credit wasn't limited by your income -- should also be eligible for ITINs because the credit is a tax benefit. But, if your income was high enough or there was some other reason that your daughters didn't qualify as your dependents, then there is no tax benefit for simply listing them on your return. 

You can use the following interactive tax assistants from the IRS to go through the questions and answers to double-check your main points: 1) that your daughters qualify as your dependents, 2) that they qualify for the tax credit for "other" dependents, and 3) that they qualify for an ITIN.

IRS Interactive Tax Assistants

• Whom may I claim as a dependent? Note: answer these questions from your perspective.
• Does my child/dependent qualify for the child tax credit or the credit for other dependents? Note: answer these questions from your perspective. Remember that there is a phase out for this credit above certain income levels.
• Am I eligible to apply for an individual taxpayer identification number? Note: answer these questions from your daughters' perspectives. Remember that there is a requirement that there be a tax benefit for adding your daughters to your return.

I suggest that you use the interactive tax assistants above to check the most basic details about qualifications. Check the calculations on Schedule 8812 in your original return (before you removed your daughters) and see if it agrees with your expectations. (You can see a blank copy of that schedule for 2022 here: 2022 Schedule 8812.)

If you believe your daughters do qualify you for a tax benefit -- and they should, therefore, qualify for an ITIN -- then you could possibly amend your 2022 return to claim them again. But you would need to somehow resubmit your original W-7 applications for them in order to get any benefit on your 2022 return. ITINs can only be used for a tax benefit on a particular year's return if the application for the ITIN was submitted before the due date (including any extensions) for the tax return. Filing new W-7 applications for your daughters now would not have any impact on your 2022 return.

If you filed an extension for your 2023 return and file W-7 applications now, then getting an ITIN for your daughters would count for your 2023 return.

For W-7 applications, you can find a local acceptance agent by searching for your state here: Acceptance Agent Program. An Acceptance Agent will verify your daughters' identity documents, take certified copies of them, and send the copies with the W-7 applications to the IRS. This prevents you from having to mail original passports and other identification to the IRS. Call around to several, though. They make their own decisions on pricing and some will offer more in-depth services than others.

Finally -- if you filed your 2022 tax return with TurboTax and need additional assistance with the specific details of your case that shouldn't be shared here (such as your income or specific entries on your tax forms), please call us at 800-446-8848. We'd be happy to help.