The Internal Revenue Service announced on May 28 that American taxpayers would be able to amend their 2019 federal income tax filing by submitting a Form 1040-X electronically. The option is not available yet, and when it does become available, it will only be for the 2019 tax year. The IRS has already processed a majority of the economic impact payment stimulus checks from the CARES Act, though.
Before the IRS' announcement, the only way to submit a 1040-X form was by filling out a physical form and mailing it to the IRS. Now, the agency is looking to launch the electronic filing option "later this summer." You can use available tax software products to put in the filing. IRS Commissioner Chuck Retting called it a "major milestone" for the IRS. Taxpayers will be able to use the "Where's My Amended Return?" tool to track their forms.
"E-filing has been one of the great success stories of the IRS, and more than 90 percent of taxpayers use it routinely," Retting said. "But the big hurdle that's been remaining for years is to convert amended returns into this electronic process. Our teams have worked diligently to overcome the unique challenges related to the 1040-X, and we look forward to offering this new service this summer."
Again, the option will only be available for the tax year 2019 Forms 1040 and 1040-SR. Taxpayers can still submit the 1040-X forms by mail if they wish to do so. More "enhancements" are planned for the future. "Adding amended returns to the electronic family also complements our partnership with the tax software industry, which continues to work with us to provide better ways to help taxpayers," Ken Corbin, Commissioner of the IRS Wage and Investment division, said.
The IRS receives about 3 million Force 1040-X submissions every year. You can use them to amend returns for tax credits you missed or to add income that was not properly reported before, notes CNBC. If you want to change returns from 2018 or 2017, those will still have to be submitted on paper. The 2019 income tax filings are now due on July 15, since the IRS postponed tax day due to the coronavirus pandemic.
The CARES Act included a one-time stimulus check for Americans who filed their 2018 or 2019 income taxes already. Individuals with an income of $75,000 or less were eligible for $1,200, and joint-filers were eligible for double that. Dependents under 17 also qualified for $500, added to the head-of-household's stimulus payment. On June 3, the IRS said 159 million payments have already been processed.
After the qualifications for the payment were revealed, some Americans who filed their 2019 tax returns early realized they may have qualified for a more significant amount if the IRS had based their payment on the 2018 return or if they made changes to the 2019 tax return. Experts told MarketWatch in April it was not a good idea to file another 1040, since that would only "confuse" the IRS. Instead, they suggested filing a 1040-X form, even if the IRS could not process the form in time before processing the payment. "If it turns out you actually qualify for a larger stimulus check then you received, you will get a credit on your 2020 tax return," Larry Pon, a certified public accountant, told MarketWatch.