Why a Stolen Dependent SSN Can Freeze Your Entire Tax Return and How to Fix It Fast
Child identity theft is one of the fastest-growing problems in the tax system. Most parents don’t find out their child’s Social Security Number has been compromised until they try to file a tax return—and it rejects instantly. When a fraudulent return is filed using your child’s SSN, both your refund and your child’s identity record enter an immediate IRS security review.
For parents expecting a refund, this is one of the most stressful delays you can face. A stolen dependent SSN can trigger transcript freezes, error codes, and months-long processing holds.
This guide explains exactly what happens when your child’s SSN is used fraudulently, why your return gets frozen, and the steps you must take to restore your child’s identity and release your refund.
Why Child Identity Theft Is So Dangerous During Tax Season
A child’s SSN is highly valuable to criminals because:
- Children rarely have credit histories
- Fraud often goes undetected for years
- Parents use their SSNs every tax season
- Refundable credits tied to dependents are lucrative
Criminals use a stolen SSN to file fake returns claiming:
- The Child Tax Credit
- The Earned Income Tax Credit
- Head of Household status
- Dependent-related deductions
When the IRS receives two returns with the same dependent SSN, the second one (usually the real parent) is automatically flagged.
The Immediate Refund Impact: A Full Processing Freeze
When your child’s SSN has already been used on a fraudulent return, your return will be placed into the IRS identity protection system.
Common outcomes include:
1. Return Rejects During Filing
If filed electronically, your return may reject with a dependent-related error.
2. Return Accepts but Goes Into a Security Review
If it passes e-file filters, internal systems will catch the conflict later.
3. Transcript Shows Freeze Codes
You may see:
- TC 570 – Refund Hold
- TC 971 – Notice Issued
- TC 810 – Refund Freeze (severe cases)
Until the identity issue is resolved, no TC 846 refund release code will appear.
What Happens Behind the Scenes at the IRS
When two taxpayers claim the same child:
- The IRS locks the dependent record
- Both returns are flagged for manual review
- Refunds associated with the dependent are frozen
- A notice is generated to the legitimate filer
- Identity verification steps begin
This is not a quick review. Processing may take:
- 8–12 weeks for standard cases
- 4–6 months for severe identity theft cases
- Longer if documents are missing
The Letter You Will Receive: Notice CP87A or an Identity Verification Letter
Parents typically receive:
- CP87A – A notice that another return used your dependent
- 5071C or 5747C – Identity verification letters
- CP01A – Identity protection pin notice (future years)
The notice will instruct you on what the IRS needs to validate your dependent.
What You Must Do: File Form 14039 (Identity Theft Affidavit)
If your child’s SSN was used fraudulently, complete:
Form 14039 — Identity Theft Affidavit
You will indicate:
- The affected dependent
- That the dependent is a minor
- That the return was filed fraudulently
- Your correct tax year
- Any supporting documentation
This form places your child into the IRS Identity Protection system to prevent future abuse.
Documents You Should Submit (Do Not Skip These)
To avoid additional delays, prepare:
- Child’s Social Security card
- Birth certificate
- School or medical records showing residency
- Your own ID
- Copy of your tax return
- The IRS notice you received
- Any documents proving custody or dependency
The stronger your documentation, the faster the freeze can be lifted.
How Long Does It Take the IRS to Fix This?
Identity theft cases involving dependent SSNs are labor-intensive.
Estimated timeframes:
- Basic identity match: 8–12 weeks
- Full identity theft case: 16–24 weeks
- Cases requiring additional verification: Up to 6 months or more
Your refund will not be released until:
- The child’s SSN is validated
- The fraudulent return is removed
- The dependent is assigned back to your return
- The freeze code is lifted and TC 571 or TC 846 is posted
What Happens on Your Transcript
Your Account Transcript may show:
- TC 570 – Refund Hold
- TC 810 – Refund Freeze
- TC 971 – Notice Sent
- TC 572 or 571 – Hold Released
- TC 846 – Refund Issued (only after full resolution)
Transcript updates tell you far more than Where’s My Refund.
How to Protect Your Child’s SSN Going Forward
After the IRS confirms you are the rightful filer:
1. Your child will be issued an Identity Protection PIN (IP PIN)
This prevents future fraudulent filings.
2. Freeze your child’s credit
Contact all three bureaus.
3. Store the child’s SSN securely
Do not carry SSN cards in wallets.
4. Monitor IRS notices each year
Identity theft cases can recur if not monitored.
Warning: Do Not Try to Refile or Override the Error
When a dependent SSN has already been used:
- Do not refile electronically
- Do not override the dependent field
- Do not switch to Single or another status improperly
Let the IRS identity theft process run. Refiling causes additional freezes.
When a child’s SSN is used fraudulently, the parent’s tax return is immediately thrown into the IRS identity theft pipeline. Refunds freeze, transcript codes appear, and the IRS will not release any money until identity and custody are fully verified.
To resolve it:
- File Form 14039
- Respond to IRS notices quickly
- Provide documentation proving the dependent lives with you
- Monitor your transcript for TC 571 or TC 846
Although the process can take months, completing the steps correctly ensures your refund is eventually released and your child’s identity remains protected in future years.
