UH OH! Up to 600,000 tax returns filed by H&R Block could be delayed by up to six weeks, according to the Internal Revenue Service.
The problem: Form 8863, which you must fill out to get the student tax credit. The credit is equal to 100% of the first $2,000 of qualified expenses and 25% of expenses over $2,000. Maximum is $2,500.
In previous years, preparers could leave a field blank to indicate “no.” This year, they have to enter “n.” If they didn’t, the forms get delayed. H&R Block says those who filed between Feb. 14 and 22, 2013 were affected.
About 10% of the 6.6 million returns filed with form 8863 are affected, the IRS says. The government tax agency is helping to reduce wait time, according to Marketwatch.com.
“For those clients who received the IRS notice regarding form 8863 that said it would take 6-8 weeks to receive a refund after this issue was resolved, we are assured it will not take that long,” H&R Block said in a statement on its Facebook page. “We continue to work with the IRS and as we have more specifics on timing and any other updated information, we will share it with our clients.”
H&R Block clients have started a page of their own, called “Club 8863,” which has earned 2,950 “likes.” When asked if it was contemplating rebates to affected customers, an H&R Block spokesman said only, “Right now we are resolutely focused on ensuring the returns are processed on behalf of our clients.”
The American Opportunity Tax Credit, the official name for the student tax credit, is available to full-time undergraduate students. The full credit is available to families that earn up to $160,000 a year; it’s phased out for those that between $160,000 and $180,000. It’s not available to families that earn more than $180,000. (For single filers and heads of household, the credit starts disappearing at $80,000 and vanishes at $90,000.)
H&R Block notes that delaying return processing may cause additional headaches for those completing the Free Application for Federal Student Aid, or FAFSA.
If your return has not yet been processed by the IRS, you can manually enter the tax return data on the application. You can then return to the online FAFSA to update the information when your return has been processed.
Those who filed form 8863 have already had to wait to file, thanks to budget bickering in Congress. Resolution of the so-called fiscal cliff, a mix of tax hikes and budget cuts that could have sent the economy reeling, delayed the processing of tax returns. The IRS didn’t accept returns with form 8836 were not accepted Feb. 14.
via BlackMediaScoop
