With stimulus check and other tax credits like the advance CTC payments now only being paid via tax return filings, based on past year tax returns and adjusted gross income levels, many eligible recipients have scrambled to amend tax returns to get these payments as a refund payment.
The good news is you can modify or amend your tax return relatively easily now via paper (1040X form), online for recent tax years via your preferred tax filing software or for free via the IRS website for lower income filers.
This also includes correcting information from missing or incorrect W2s or 1099 that may impact your income and qualification for tax credits or past stimulus checks.
However as many folks have found, after submitting a regular or amended tax return they find themselves stuck facing long delays in getting their refund payment. For those with paper based amended returns, processing times are being measured in months, and not weeks.
This is due to IRS staffing shortages, the sheer volume of returns and issues with the amount being claimed or just simple errors in reconciling what was paid in advance versus the balance left to be paid via refund.
Why Should I Amend My Tax Return?
Tax filers generally should not file an amended return for minor mistakes or prior to IRS processing of their initial submission. In fact as discussed in the sections below, you need to know the right situations in which an amended return makes sense, because it is taking the IRS up to 20 weeks to process amended returns.
Tax payers are sometimes instructed by the IRS to file amended returns if after initial processing and reviews, they have identified mistakes. For example if the WMR messages that your return processing has been delayed or code 570/971 on your tax transcript, tax filers often instructed by the IRS to file an amended return to fix filing errors.
Another reason you may want to amend your tax return is that down the road, after your initial return was processed, you notice that you forgot to claim one of the many stimulus credits or qualified deductions.
You may think that this money is gone now that your return has been submitted but you would be wrong; since you can actually send an amended tax return and claim this extra cash.
The IRS will process – free of charge – your amended return and then pay you back what you are due. On the flip side if you owe more than you paid with your original filing, then you should still file an amended return with the extra tax payments.
Most likely you will also have to pay a fine or penalty as well – which will be lower the sooner you pay the extra taxes. Also it is better to fess up an pay early rather than face an IRS audit which will pick up these overdue tax payments
Amended Tax Return Refund Schedule Cycle
While the IRS promises to have regular return refunds processed within 21 days for nine out of ten tax payers, it does take quite a bit longer to receive a refund if you amended your tax return.
Generally you will have to wait up to 20 weeks for the IRS to process amended returns since they prioritize regular returns.
Also note that the standard”Where’s my refund” service from the IRS does not track amended tax return status’.
You need to use the IRS tool, “Where’s My Amended Return” instead. Only call the IRS to follow up on delayed amended return refunds after 12 weeks. The number to call is 1-800-829-1040
Here are other key factors to keep in mind with amended federal tax return filings:
- What you can and cannot file an amended return for You should file an amended return if you discover any of the following items were reported incorrectly: filing status, dependents, total income, deductions or credits. You usually do not need to file an amended return because you forgot to include tax forms such as W-2s or schedules. The IRS normally will send a separate request asking for those documents.
- Once you have submitted your federal income tax return, you can no longer change that return. (One exception: If your e-filed tax return is rejected, you can make changes before sending it in again) If you want to make changes after the original tax return has been filed, you must file an amended tax return using a special form called the 1040X – Amended U.S. Individual Income Tax Return, entering the changes and explaining why you need to amend your original tax return. You don’t have to redo your entire return, either. Just show the necessary changes and adjust your tax liability accordingly
Deadlines to File the Amended return. You generally must file an amended return within three years of the date you filed the original return or within two years after the date you paid the tax, whichever is later. Be sure to enter the year of the return you are amending at the top of Form 1040X
You can use e-file preparation software to amend your return. In fact, TurboTax walks you step-by-step through amending your federal income tax return.
If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the IRS office for the area in which you live. The 1040X instructions list the addresses for the campuses. If the changes involve another schedule or form, you must attach it to the 1040X
- If you owe additional taxes for a past tax year, you should still file. Form 1040X and pay the tax as soon as possible to limit interest and penalty charges. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.
Amending your state tax return
First, fill out an amended federal income tax return, Form 1040X. Then, get the proper amended tax return from your state tax or revenue agency and fill it out.
Like the IRS, your state uses a special form and process for an amended return.
Many states also use the “X” suffix for the form number. For example, California uses Form 540X and Hawaii uses Form N-188X. Don’t forget to attach a copy of your amended federal return (Form 1040X) to your amended state return.