IRS Delays Processing of Returns with Educational Credits

Paying for College
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<p>I just received the following from the AICPA and the Journal of Accountancy.</p>

<p>On Monday, two days before the delayed Jan. 30 start of the 2013 filing season, the IRS announced a further delay in processing returns that contain Form 8863, Education Credits, which must be filed by people claiming the American opportunity and the lifetime learning tax credits (IR-2013-10). During testing, the IRS discovered that programming modifications must be made before the form can be processed correctly so returns that include the form cannot be filed until mid-February. </p>

<p>The IRS emphasized that returns claiming other education-related items, such as the student loan interest deduction and the deduction for higher education tuition or fees, can be filed beginning Wednesday, Jan. 30.</p>

<p>The IRS also noted that its website contains a list of 30 other forms that cannot be filed yet because the forms must be updated and systems for processing them tested. A date will be announced when returns containing these forms will be accepted, but that date will probably be late February or sometime in March.</p>

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<p>Thanks for the news.</p>

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<p>Will this delay schools’ processing of financial aid packages?</p>

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<p>Good grief, how annoying. We’re getting a refund for a change this year, because our self-employment income was lower than expected. Sigh.</p>

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<p>Funny how the IRS puts a different spin on it in the title (‘accept’ rather than ‘delay’ than the above-referenced Journal of Accountancy article:</p>

<p>[IRS</a> To Accept Returns Claiming Education Credits by Mid-February](<a href=“http://www.irs.gov/uac/Newsroom/IRS-To-Accept-Returns-Claiming-Education-Credits-by-Mid-February]IRS”>Made historical as part of translation project | Internal Revenue Service)</p>

<p>IRS To Accept Returns Claiming Education Credits by Mid-February
IR-2013-10, Jan. 28, 2013</p>

<p>WASHINGTON — As preparations continue for the Jan. 30 opening of the 2013 filing season for most taxpayers, the Internal Revenue Service announced today that processing of tax returns claiming education credits will begin by the middle of February.
Taxpayers using Form 8863, Education Credits, can begin filing their tax returns after the IRS updates its processing systems. Form 8863 is used to claim two higher education credits – the American Opportunity Tax Credit and the Lifetime Learning Credit.
The IRS emphasized that the delayed start will have no impact on taxpayers claiming other education-related tax benefits, such as the tuition and fees deduction and the student loan interest deduction. People otherwise able to file and claiming these benefits can start filing Jan. 30.
As it does every year, the IRS reviews and tests its systems in advance of the opening of the tax season to protect taxpayers from processing errors and refund delays. The IRS discovered during testing that programming modifications are needed to accurately process Forms 8863. Filers who are otherwise able to file but use the Form 8863 will be able to file by mid-February. No action needs to be taken by the taxpayer or their tax professional. Typically through the mid-February period, about 3 million tax returns include Form 8863, less than a quarter of those filed during the year.
The IRS remains on track to open the tax season on Jan. 30 for most taxpayers. The Jan. 30 opening includes people claiming the student loan interest deduction on the Form 1040 series or the higher education tuition or fees on Form 8917, Tuition and Fees Deduction. Forms that will be able to be filed later are listed on IRS.gov.</p>