E-filing has become perhaps the most popular way to file tax returns due to the convenience and faster response times it provides taxpayers. Also, it can help reduce the number of errors in filing your taxes. Part of that is because online tax preparation software helps taxpayers through the process. The other side is that the IRS does a preliminary review of every e-filing before accepting it. This preliminary examination can detect common errors and give the individual a chance to correct them.
Although an e-file rejection message is stressful, the correction and return process is usually not that difficult. Depending on the type of error encountered and if it's a minor issue, you might want to submit it again in a few minutes.
Taxpayers have 10 days (non-business calendar) to correct rejected claims. If you're worried about a notification received since April 15, don't worry. The IRS allows until April 20 to correct an e-file rejection and resubmit it electronically.
Here is the procedure for correcting an e-file if it is rejected:
First, determine the error. There are several errors for which an electronic file can be returned, and the IRS will send a code to help determine what the error is.
Here is a list of expected error responses received on 1040 submissions:
Errors IND-032, IND-031, 0679 or 0680
If you encounter any of these errors, the system has difficulty identifying one or both of the taxpayers. All you need is an electronic PIN file or your adjusted gross income from the previous year to remedy this. Request an e-filing PIN from the IRS, enter that PIN into the e-filing software, and resubmit the return for a review.
Error 0504
This is a very common mistake when claiming a dependent. If the dependent's SSN and first name do not correspond to what is registered with Social Security, the return will be rejected. Check the spelling on the social security card and correct the error.
Errors 0502, FW2-502 or FW2G-502
One of these errors indicates a problem comparing the W-2 information with the information in the IRS file. If you make an error with the EIN or if there is a typing error with the EIN W-2, your electronic submission may be rejected. Check the spelling of the employer name, EIN, and abbreviations. You can correct the e-file rejection and resubmit the return by correcting the employer name and EIN.
Error 0522
This is due to a wrong date of birth. If your date of birth and social security number do not match, your return will be refused. Correct your date of birth, check the IRS file for an error and correct the error.
Errors 0507 or R0000-507-01
If you claim a dependent and receive one of these errors, the dependent's social security number has already been claimed. Make sure your SSN is correct, make sure you've entered the number twice, and contact the IRS to see who claimed your dependent. If the dependent has been claimed, delete the dependent from your electronic file and resubmit.
There are several rejection errors you may encounter. The electronic filing software you use will provide a rejection report and explain what needs to be corrected before resubmitting. Once you have corrected all errors, you can resubmit your return electronically. If the rejection is due to information in the IRS file, you may need to file a paper return until the errors causing a mismatch can be corrected.
Once you understand the types of error code, you can continue to move forward by fixing the problem and resubmitting. In most cases, these are administrative errors in critical credentials and, as such, are rejected. If a return cannot be organized and submitted electronically, you will need to print and mail it.
How long do you have to correct an electronic file rejection?
In most cases, if the IRS initially rejects your electronic tax return, you will be able to correct the tax return and resubmit it. If a refusal reoccurs after the April 15 deadline, you will have five days to correct your errors and resubmit your return.
If the IRS rejects a return, it will provide an error code to identify the information that needs to be corrected. It can often be as simple as entering the wrong adjusted gross income, wrong date of birth, or wrong social security number for yourself or a dependent.
Errors like this are usually easy to fix and can be corrected within minutes. If for some reason, the error is more complex or cannot be corrected by electronic filing, the return can be printed and sent to the IRS.
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