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CP321L notice: what it means and what to do
Got an IRS CP321L notice? Here is what it means, your deadline, what to check before you answer, and how to reply. Check your own letter free: it stays on your phone.
Check my CP321L notice freeWhat the IRS says this notice is about
This notice explains that taxpayers who previously claimed the American Opportunity Tax Credit (AOTC) or Lifetime Learning Credit (LLC) using an individual taxpayer identification number (ITIN) must now have a valid Social Security number (SSN) to qualify for these credits.
What you need to do
- Use the Tax Withholding Estimator to review your withholding if you do not meet the new SSN requirement.
- Update Form W-4, Employee’s Withholding Certificate , to adjust your withholding or make an estimated tax payment , if necessary.
Failure to review and address how this change affects your taxes could result in a balance due when you file your return.
Your deadline
Answer by the date printed on your notice. If there is no date, answer as soon as you can, and call the number on the notice if you need more time.
What to check before you answer
You may be able to remove the penalties
If you had no penalties in the 3 tax years before, filed all required returns, and paid or arranged to pay the tax, the IRS First-Time Abatement policy can remove failure-to-file and failure-to-pay penalties. You can ask in writing or by phone.
Cannot pay it all now? Ask for a payment plan
You can apply for a payment plan on irs.gov. Interest keeps running until the balance is paid, so pay what you can now.
Is this letter really from the IRS?
The IRS writes first by mail. A real letter shows a notice or letter number, your name and part of your tax ID number. The IRS does not ask for payment by gift card, crypto or wire transfer. If in doubt, sign in to your IRS online account, where many notices are listed.
Common questions
What is AOTC?
American Opportunity Tax Credit is a partially refundable credit available for the first four years of post-secondary education. The student must be pursuing a program leading to a degree or other recognized education credential.
What is LLC?
Lifetime Learning Credit is a non-refundable education credit available for students taking a course to acquire or improve job skills.
What is a “valid” SSN?
A valid SSN to claim AOTC or LLC must be valid for work and issued by the Social Security Administration before the due date of your 2026 return (including extensions).
Who must have a valid SSN?
Beginning with tax year 2026, you or your spouse (if married filing joint) and the student (if your dependent) must meet this requirement. If you are filing a joint return, only one spouse is required to have a valid SSN. The other spouse can have an ITIN.
What if I have multiple students?
Each student must have a valid SSN and other criteria to qualify for AOTC or LLC . You can claim only one of the education credits per qualifying student. However, you can claim both the AOTC and LLC on the same return only if they are not for the same student and the same expenses.
Will this affect my prior year returns?
No, the new SSN requirement only affects the current year and future year returns. These changes will not apply to your prior year returns.
Helpful information
- Pay as you go, so you won't owe: A guide to withholding, estimated taxes and ways to avoid the estimated tax penalty