2012 Tax Returns Claiming Education Credits Delayed

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.

Posted By Mark Smith

Mark Smith, RTRP is a Registered Tax Return Preparer and accountant with over 30 years tax and accounting experience. He is the owner of Cranmere Accounting and Tax Services LLC. He can be contacted on (480) 363-4808 or by email at info@cranmereaccountingandtax.com if you need assistance with any of the above.

33 Responses to 2012 Tax Returns Claiming Education Credits Delayed

  1. What address do I send my 8863 form to?

    • The Form 8863 is mailed to the same address as you file your tax return. In fact it is filed with the return, not on its own. You can find the address in the 1040 instructions.

  2. i filed my income tax on february 1st with education credits. it was not ofcourse accepted until feb 14, and now i am going to get some kinda letter further delaying my refund. can you explain to me why i might be getting a letter

    • There can be many reasons why a tax refund is delayed. If you owe back taxes, child support or other Federal or State debts they can be taken out of the refund. In this situation you will receive a letter showing what debt and how much was taken from your refund.

      As far as the education credits on Form 8863 are concerned, the IRS has found a lot of forms with boxes 25 and 26 not completed. Without those boxes completed they will not process the refund and the letter will ask for the boxes to be completed. The same applies to boxes 23 and 24.

  3. I JUST SPOKE TO THE IRS AND MINE WAS ACCEPTED FEB 15TH AND THE FORM 8863 IS NOW HOLDING MINE UP GREATLY TOLD ME NOT TO EXPECT A REFUND UNTIL MAY !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    • We were told the same thing. Last week they said we should have a date by May 1st. When there was no date my husband called the IRS..AGAIN. This time they say another two weeks or so. I am getting the feeling in two weeks we will be told yet another story. In the mean time, our son has not been able to register for his classes for next year because we were waiting for that money so he could.

  4. Elizabeth Erickson

    What do you know about the issues with Boxes 23-26 on Form 8863 causing delays? Is there any resolution pending? Various statements are being thrown around…one says you will get a letter explaining a delay, another states that you will get a letter and you have to follow the directions on the letter, another says you will get a letter, but just disregard the letter, and the last statement says that no further letters are being sent out and returns with edcuation credits will begin processing on a first in/first out basis.

    Can you gain any insight to this crazy mess?

    Liz

  5. I received a letter from the IRS stating that i needed to submit questions 23-26 from form 8863, the confusing part is that when I checked my copies for my return I saw that those boxes had been checked already (correctly), so there is obviously a glitch in the IRS system.

    • H&R Block has now admitted that there were problems with the transmission of some of the 8863s they prepared. This may also have applied to some other software providers. The software companies are trying to sort out a resolution of the problem. So, check with your tax preparer or software provider to see how they suggest you proceed.

  6. I keep getting told different things as well. I was told that I would receive a letter explaining the delay, then told I would receive one requesting more information, then told I wasn’t due to receive a letter at all. I’m very confused….

    • It is a mess, but at least H&R Block has admitted there was a problem with some of the 8863s they filed. The IRS has also indicated that it won’t take 6 to 8 weeks to sort out those returns affected by the issue, so hopefully the refunds will arrive sooner than expected. My advice would be to check with your tax preparer or software provider on how to proceed.

      • I had my taxes done today by H and R block and he said it is IRSs fault. I can’t wait till May to get my refund! What should we so I’d we can’t wait.e

        • The IRS has indicated that it shouldn’t take that long to get the refund. Also, the issue seemed to be with earlier filed 8863s so yours may well be OK if it was filed today.

  7. Seleatha Fain

    I just got off the phone with the IRS and last week they said I will receive a form requesting more information and then today they said I will not that it’s just on hold. I don’t know what to do. It sucks are there any solutions or updates?

  8. We filed our taxes Feb 12th. The IRS accepted it Feb. 15th. It has been over the 21 days. There’s nothing wrong with it besides we had education credits. We have not received any news about the delay. Why is it taking to so long.? H & R Block won’t tell us anything besides to just wait for it. Its so frustrating!!

  9. Michael Wilken

    I filed our return on February 2nd. It was accepted by the IRS on February 14th. March 12th, I received an email from H&R Block indicating there was an issue with the education credit i applied for. No further details were provided. I double checked my return and everything on form 8863 was filled our correctly. It has to be some kind of glitch with either H&R Block or the IRS or both. I just want to receive my refund and go on with my business.

  10. I received a letter stating that mine needed more information as well. It states boxes 25 and 26 weren’t completed, however I looked on my 8863 that was filed and they were. I also checked Where’s My Refund and it told me that my refund was being sent to the bank on March 20th and if I haven’t received it before March 25th to contact my bank. Also on Where’s My Refund it said something about if I don’t receive the amount I expected it was probably due to an offset charge or something like that, any idea what I should expect and or do. I have no clue what’s going on. The letter from the IRS is dated March 15th, 2013 however I received it March 16th, 2013 so I think that’s a lie for sure and the Where’s My Refund was updated sometime between March 13th, 2013 and March 15th, 2013 because I checked it those two days and it had changed since.

    • If Where’s My Refund shows they are issuing the refund, there is a good chance they will be doing so. If there is any offset, you will receive a letter explaining what has been offset against the refund.

  11. So if the IRS told us to diregard the message with missing info, we are ok right?

    • See if you get the refund by mid April. If you don’t, you will need top contact the IRS.

  12. Just was on IRS web site new posting today here it is hope it heUpdate March 26, 2013

    Over the last two weeks the IRS has worked diligently to process tax returns affected by a problem with a limited number of software company products involving some taxpayers filing Form 8863, Education Credits. The IRS previously estimated that it could take 4-6 weeks from March 12 to issue refunds to the impacted taxpayers. Due to the special steps the IRS took to help these taxpayers, the work is being completed more quickly than anticipated — in two to four weeks. Many affected taxpayers have already received their refunds and more are on their way. The IRS expects to issue nearly all of these refunds in early to mid-April .

    Taxpayers affected by this issue can check “Where’s My Refund?” on IRS.gov to determine the status of their refund. The IRS reminds taxpayers that “Where’s My Refund?” is usually updated overnight, so taxpayers only need to check the tool once a day.

  13. I also filed 8863 form. I have used TutboTax to prepare my documents. My return was accepted on 2/26 and I had a date for direct deposit on 3/6. I didn’t get my refund so I checked again “where is my refund” and there was this message:
    Take action
    There is a delay in processing your tax return and your expected refund date may have changed.
    If you have questions or need additional information, please have the following on hand when you call:…….. Please mention reference number 1121 to the IRS Customer Service Representative.

    I didn’t received any letters from IRS. I am actually out of USA. Is it necessary to call IRS ? And will they process my refund If I don’t call or get any letter ?

    • You should get the refund by early to mid April according to the latest IRS statement.

  14. i spoke to the irs mid march and bc of the error my tax return wasnt accepted until march 9 even though i filed since jan 30. he said wait the 21 days and then i should updates under the wheres my refund option. i looked online today and no information can be provided still and now theres an error on the irs website prompting you to call. i called and its the same thing. what should i do if i have emails and papers saying everything was accepted but i can not get any information. nor have i received any letter about my returns.

    • You will need to wait until the end of April or beginning of May and then follow up with the IRS.

  15. I had recently spoke with a customer service rep and she had told me 4-6 weeks from April 12 and we may receive a letter saying they need further processing