Update March 17, 2013 – On March 12, 2013 the IRS released a statement about the problems with some Education credit claims. In the statement they say they are working hard on sorting out the problem, but it may take up to 4-6 weeks to complete. In the mean time there is not much that affected taxpayers can do, other than wait for their refund to be released once the IRS has completed sorting out the problem.
Update February 9, 2013 – Educations credits claimed on Form 8863 can be filed from February 14, 2013.
The IRS announced on January 28, 2013 that 2012 tax returns claiming education credits can not be filed until mid February. These are the American Opportunity Tax Credit and Lifetime Learning Credit claimed on Form 8863 Education Credits.
For taxpayers due a tax refund by filing Form 8863 this will mean a further delay in receiving the refund. If this will apply to you, budget for receiving the refund around about the end of February or early March if you e-file.
For taxpayers claiming other education tax benefits, such as the Tuition and Fess Deduction or student loan interest deduction, they can start filing on the official start of the tax season on January 30, 2013.
According to the IRS the filing delay for Form 8863 is due to them having to make modifications to their systems following testing of the processing of Form 8863. They also indicated that in a normal year about 3 million tax returns with Form 8863 are filed by mid February, representing about 25% of the total Forms 8863 filed each year. So, hopefully the impact will not be too great.
I am recommending that my clients with education tax benefits still make their tax preparation appointment when they have all their information ready. That will enable me to check which education tax benefit is best for them. If it is one of the benefits that can be claimed from January 30, 2013 there will be no delay in filing their tax return and getting any tax refund due to them. For those using Form 8863 the return will be all ready to e-file once the IRS gives the go ahead.
The 2013 tax filing season continues to be an interesting one with this new delay on top of the previously announced delays. Hopefully there won’t be too many more and tax payers and tax preparers can concentrate on getting tax returns filed.
Disclaimer – This article does not constitute personal tax advice to the reader and is only offering general information. You should seek professional advice for your own situation as the most appropriate tax planning depends on your personal and unique circumstances.