IRS Expands E-Filing Access for Foreign Dependents with IP PIN Requirement

The Internal Revenue Service (IRS) has implemented a notable update to its e-filing system for tax year 2025: taxpayers can now electronically file Form 1040 returns that include foreign dependents previously claimed, provided the taxpayer uses a valid Identity Protection Personal Identification Number (IP PIN). This change enhances convenience for international taxpayers and expatriate families while maintaining a high standard of security against identity theft and improper refund claims.

In this blog, we’ll explore what this policy change means, who it affects, how to obtain and use an IP PIN, and the broader implications for international filers and compliance.

Background: Claiming Foreign Dependents on Form 1040

U.S. taxpayers are allowed to claim dependents who reside outside the United States, provided they meet IRS definitions and tests such as:

• Relationship test (child, parent, sibling, etc.)
• Citizenship or residency test (U.S. citizen, U.S. resident alien, U.S. national, or resident of Canada or Mexico)
• Support and gross income tests
• Dependency not claimed by another taxpayer

Historically, returns involving foreign dependents required additional verification and were often rejected for e-filing, forcing taxpayers to mail paper returns. This created long delays in processing and added risk of errors or document loss.

What’s Changed in 2025?

Starting in the 2025 filing season, the IRS now accepts e-filed Form 1040 returns that include foreign dependents, as long as:

• The dependent was previously claimed on a prior-year return
• The taxpayer provides a valid Identity Protection PIN (IP PIN) for authentication

This change removes a major barrier for filers with international family members and helps ensure faster return processing and refund delivery.

What Is an IP PIN?

An Identity Protection PIN is a six-digit number assigned by the IRS to eligible taxpayers to prevent the misuse of their Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). It is required to verify identity when filing tax returns and prevents others from fraudulently using the taxpayer’s personal information.

With the latest updates, an IP PIN is now also a key to unlocking e-filing capabilities for those claiming foreign dependents.

Key facts about IP PINs:

• They are valid for one calendar year and must be renewed annually
• Once assigned, an IP PIN must be used on all returns (including electronic and paper)
• Taxpayers can obtain one through the IRS “Get an IP PIN” tool on IRS.gov
• Available to all taxpayers, even those not previously affected by identity theft

Benefits of the New Rule

This IRS e-filing update offers several benefits to taxpayers:

• Faster processing: E-filing results in faster return acceptance and refund disbursement
• Improved security: Requiring an IP PIN reduces fraud and identity theft related to dependent claims
• Global compliance support: Beneficial for expatriates, immigrants, and cross-border families with legitimate dependents abroad
• Convenience: Reduces the need for cumbersome paper filing and postal delivery

For example, an American citizen living in Canada who supports dependent children that meet IRS tests can now file online instead of mailing documents—a major improvement in tax experience.

Eligibility to Claim Foreign Dependents

Even though the e-filing barrier is lifted, taxpayers must still meet all IRS dependency rules. Some key eligibility considerations include:

• The dependent must not have filed a joint return (unless only to claim a refund)
• They must live in the U.S., Canada, or Mexico (exceptions apply to adopted children)
• The taxpayer must provide over 50% of the dependent’s support
• The dependent must have a valid TIN (usually an SSN or ITIN)

Dependents outside the U.S. may still need an ITIN if they don’t qualify for a Social Security Number. Taxpayers must apply for ITINs using Form W-7.

How to File with an IP PIN

To take advantage of the new e-filing capability with foreign dependents, follow these steps:

1. Apply for an IP PIN using the IRS online tool or via Form 15227 if eligible
2. Wait for confirmation of your assigned PIN (usually sent by mail or accessed online)
3. Prepare your tax return using tax software or a tax professional
4. Include the IP PIN during the e-filing process
5. Submit electronically and receive IRS acknowledgment of receipt

Always store your IP PIN securely. If lost, it can be recovered using IRS online tools after identity verification.

Exceptions and Limitations

There are still situations where electronic filing may be restricted or additional verification is required. These include:

• First-time dependent claims where the dependent was not on any previous year’s return
• Dependents with expired or invalid ITINs
• Returns flagged by the IRS for additional identity review

In such cases, paper filing with supporting documentation (such as birth certificates, residency documents, and ITIN renewal forms) may still be required.

Common Use Cases for the New Rule

• U.S. citizens with children living abroad (e.g., dual nationals in Canada or Mexico)
• Green card holders married to non-citizens and supporting dependents overseas
• Immigrant taxpayers claiming eligible relatives residing temporarily or permanently outside the U.S.
• U.S. military families stationed abroad with dependents accompanying them

This change represents a significant modernization of how international taxpayers interact with the IRS’s e-filing system.

Conclusion

The IRS’s 2025 update allowing e-filing of Form 1040 returns with foreign dependents—if a valid IP PIN is used—is a welcome and long-overdue enhancement for globally connected taxpayers. By expanding digital filing access and strengthening security protocols, the IRS is responding to modern taxpayer needs while maintaining its commitment to identity protection and fraud prevention.

Whether you’re a U.S. expat, an immigrant supporting family abroad, or a cross-border family unit, this update can save you time and reduce frustration at tax time. To ensure compliance and take advantage of this new rule, obtain your IP PIN in advance and confirm your dependents’ prior-year eligibility status with your tax advisor or preparer.