What is an Amended Tax Return?
When a taxpayer discovers they made a mistake on their tax return, or they are provided with or find additional tax related information after they have filed their return, they can file an amended tax return to correct the errors or add the additional information. The amended tax return can correct errors in income, filing status, credits, or deductions.
Why File an Amended Tax Return?
If a taxpayer discovers that they made a mistake (error) after they have filed their original tax return, they can file an amended individual tax return to correct their return.
An individual would complete Form 1040-X (Amended U.S. Individual Income Tax Return) to correct the originally filed Form 1040.
Made an Error
Examples of the top errors made on a return that would require an amended return are:
- Did not claim a deduction or credit that the taxpayer was entitled to
- Did not report all income
- Made an error when calculating an amount that was entered on the return
- Change filing status
Other reasons a taxpayer may need to file an amended return are:
- Change amounts previously adjusted by the IRS
- Make a claim for a carryback due to a loss or unused credit
- Claiming a casualty loss attributable to a federally declared disaster area where an election is available to deduct the loss in the tax year immediately before the tax year the loss was sustained
- Make certain elections after the prescribed deadline
See the Form 1040-X instructions for more details on when a federal amended tax return may need to be filed.
How to Amend a Tax Return
A taxpayer will complete Form 1040-X and file it either electronically or on paper to file a federal amended return.
On Form 1040-X, the taxpayer will do the following:
- Enter their income, deductions, and credits as they were reported on their originally filed return
- Enter the corrected amounts of income, deductions, and/or credits
- The Net Change is calculated as the difference between the corrected amounts and the original amounts
- Explain the changes and the reason they are being made
- Calculate the tax on the corrected taxable income
- The refund or amount due will be calculated as the corrected tax less credits and payments. If the original return resulted in an overpayment, the overpayment will reduce the payments made on the original return.
See the Form 1040-X instructions for more details on how to file a federal amended return.
A federal amended return may be filed electronically in the following circumstances:
- For tax years 2019, 2020 and 2021 – if the original return was filed electronically
- For tax year 2021 – if the original return was filed on paper
A federal amended return must be filed on paper in the following circumstances:
- The original 2019 or 2020 federal return was filed on paper
- The original tax return was filed for any other tax years before 2019
When to File a Tax Amendment
Generally, for a credit or refund, an amended return must be filed within 3 years after the date the original return was filed or within two years after the date the taxpayer paid the tax, whichever is later.
The time limit for filing a claim for a credit or refund on a Form 1040-X can be suspended for certain people who are physically or mentally unable to manage their financial affairs.
At the present time, a federal amended return (Form 1040-X) can take more than 20 weeks to process once the IRS receives it.
A taxpayer can check on the status of their amended return by using the Where’s My Amended Return? application on the IRS website.
A taxpayer will need their Social Security Number, Date of birth, and Zip Code to check on the status of their amended return.
The status of a taxpayer’s amended return may take up to 3 weeks to show up on the “Where’s My Amended Return?” tool.
State Amended Return
If a change is made to a federal individual tax return by filing a federal amended return, the state individual return may also need to be filed as a result of the federal change.
Here are some examples of changes made to the federal individual return that may require a state amended return to be filed as well:
- A modification that changes the federal adjusted gross income
- Filing Status change
- Change or addition of a federal credit that a state credit is based on
Is Direct Deposit Allowed on Federal Amended Returns?
At the present time, a taxpayer may not choose to have their refund direct deposited to their bank account. All refunds on federal amended returns are sent to the taxpayer via a check to the address on the Form 1040-X.