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Ask the taxgirl: I forgot to file Schedule M!

February 18, 2010 · 37 comments

Taxpayer asks:

I was not aware of the above credit. I am single, and just yesterday filed form 1040 EZ my self. I did not file schedule M to claim that credit. Can I file an amended return to claim this credit.

Taxgirl says:

This is a great question. I actually called up the IRS on this one because I have received quite a number of calls and emails about the same thing.

Here’s the scoop: normally, if you file a form 1040 or 1040A, you need to file a Schedule M in order to claim the Making Work Pay Credit (more on Schedule M here). If you file a form 1040-EZ, you will just complete the worksheet on the back of the form (downloads as a pdf).

But what if you forget? If you e-file, the return tends to “kick out” if you don’t claim the credit; in that case, you can just fix your error and resubmit the return. But if you file by paper – or if the e-file doesn’t catch it for some wacky reason – there’s no immediate flag. There’s also no need to panic: the IRS does not expect you to complete an amended return. The rumor is that the IRS may fix it for you… But if they don’t, the official word is that they’re expecting a workaround in the form of a notice. Most likely, you’ll receive a notice about the error and be allowed to correct it at that time. But I have been advised that you should not immediately file an amended return – if yours is pulled for processing and you submit an amended return, you’ll just confuse matters.

Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.

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{ 32 comments… read them below or add one }

1 Jim February 21, 2010 at 12:00 pm

I used Free File Fillable Forms, completely neglected the credit, and it didn’t kick out on submission (this was the full 1040). Fortunately 1040X is really short if you’re only adding the credit. I’ll wait until my refund arrives to see if they did it for me before filing ,though.

This was the first item under “What’s New” in the instructions and I completely skimmed over it because it sounded like a low-income thing. Then a couple of weeks later I read about it online, did the math, and wow, $800 in free money!

2 Kelly February 21, 2010 at 12:30 pm

Jim – Just curious as to how you figured the credit on the 1040-X since there’s no line item for it. Did you just add it as a generic credit? Hope it works out for you!

3 Jim February 21, 2010 at 11:11 pm

Kelly – On 1040X line 14 (refundable credits) there is a check-box for Schedule M. You also need to attach Schedule M, but at least you only need to fill out lines 10-22 to add a credit.

4 Frank Woodman Jr February 24, 2010 at 10:28 pm

Just remember that if someone else claims you as a dependent you don’t qualify for the making work pay credit. Often when filing a 1040ez it’s because you’ve shown that someone else claimed you. So if your parents or someone claimed you as a dependent there is no credit available for your return. You also want to watch out if you receive Social Security and received a credit last year you need to enter that amount and reduce any credit you are due this year.

5 Jodie R. February 28, 2010 at 10:28 am

The IRS did fix it for me, so the rumor is correct! They just sent me a letter that says we’ll be getting back $800 more than I thought! Woohoo!

6 Jim March 3, 2010 at 11:17 am

The IRS fixed it for me too. There is an extra $800 in our refund but I haven’t gotten a letter yet.

7 Elizabeth March 12, 2010 at 4:50 pm

My husband and I had this same issue. I hadn’t even heard of the Schedule M, we had our refund automatically deposited and it was $800 higher than we were expecting. No notice from the IRS yet, but we figured it must be from Schedule M. A pleasant surprise, I must say!

8 Lynnea March 12, 2010 at 5:50 pm

This morning I was at the gym watching a morning news show when a little blurb came up about commonly missed credits this year. I filed like Jim did and it didn’t kick it out of the system. Glad I saw this post….I’ll wait to see if they catch it….hope they do!! Hey…$800 is $800…..I’ll take it!!!

9 j March 15, 2010 at 10:05 pm

Hi,

To those who forgot about the tax credit, but got them anyway… did you received the refund on time?

Historically, I get the refund 3-5 days after I e-file (knowing that the govt issues refunds only every Friday). It’s been more than 2 weeks now and have not received my refund. In the electronic confirmation after I e-filed, it says – I should get my refund by March 16, unless there were errors or i owe them something. I know I missed this $400 tax credit as well and that’s what’s delaying it… I am anxious, coz I do not want to file an ammendment and wait another 8-12 weeks if thats the recourse. However, based on the comments here, it looks like most people got it automatically and that IRS adjusted them for you. Do you recall, if you got it longer than the estimated refund date? I am just trying to figure out what to do if I don’t receive anything by tomorrow, March 16 (the date that was in the email confirmation for the refund to be received by me)

Thanks!

10 Kelly March 15, 2010 at 10:13 pm

J – don’t file the amended return, it will just delay the processing of your return even more. It appears that the IRS is catching those returns without the Schedule M and fixing it on their end. I’ve seen a number of reports from taxpayers saying that the refunds were delayed by as much as 2 weeks in that event.

11 j March 15, 2010 at 10:17 pm

Kelly,

thanks so much for the quick response. Do you know if the refund status in the IRS site will be updated when i check it tomorrow (which is when i should originally receive my refund had i done it correctly). Or would I need to call them to get an estimated time? or should I just play the waiting game? Just anxious to get this thing out of the way. =) TY!

12 Kelly March 15, 2010 at 10:30 pm

J – Refunds are generally issued at the end of the week. So I’d say check if you want on tomorrow but I’d suggest waiting until at least the end of the week.

13 Inka April 13, 2010 at 6:54 pm

I just realized about the make work pay credit while doing my state return. I already filed the federal return and have received our credit. I was crazy figuring out if we qualified and filling in Sched. M. Then, after reading the above information about the IRS fixing it, I looked at my bank acct. and realized the refund is $800 more than I expected. How nice. Thanks for the help.

14 a April 14, 2010 at 1:54 am

IRS letter says to do nothing this year, but to fill out the Schedule M for next year. I called the 800 number to call if you’diagree’ with the refund. It states you get the refund, do nothing more, and save that letter with your taxes.

15 allen April 14, 2010 at 2:58 pm

i just received my refund but did not get the additional $800..what should i do?

16 allen April 14, 2010 at 4:54 pm

actually i looked at my turbo tax document..looks like they automatically filled that out for me..thx

17 Harold April 21, 2010 at 7:44 pm

I have already filed my 2009 federal tax return ( 1040 ) and paid my tax bill ( sent 3/30 ). My check was cashed right away ! I completely missed the Making Work Pay credit ! Therefore, I overpaid my tax bill by $400 ! What can I do to get my $400 refund ? What is the IRS likely to do in my case ? How long should I wait before giving up and filing a 1040X ?
Thanks for any advice.

18 Kelly April 23, 2010 at 4:39 pm

Harold, The IRS should catch it – I’d hang tight.

19 Harold April 24, 2010 at 5:33 pm

Kelly, et.al. :
How long do you think I should wait for my $400 refund check before giving up and submitting a 1040X ( with Schedule M ) ? Also, I noticed that most postings re: this matter involved individuals already expecting a refund. The IRS just increased their original refund by the appropriate amount ( either $400 or $800 ). In my case, I had no refund pending. Would my situation ( no original refund ) be handled differently from those folks or would it not matter ? They would just generate a separate $400 check ?
Thanks so much for your feedback.

20 Daniel April 25, 2010 at 11:01 am

I didn’t know about Schedule M and did not file for it via e-file on 4/13. I just received my tax refund and did not get the extra $400. What should I do?

21 Kelly April 26, 2010 at 7:24 pm

Daniel, if you qualify and you didn’t receive the credit, then I’d call the IRS: 1.800.829.1040. It may be that you have to file an amended return, but I’d check first.

22 Kelly April 26, 2010 at 7:26 pm

Harold, I would give it a good 2-3 weeks. I’d contact the IRS (1.800.829.1040) before filing an amended return.

23 Harold April 27, 2010 at 4:06 pm

Kelly – thanks much for the reply. I’ll wait until the first week of May before phoning. If you come across any official update on this issue please post.

Daniel – If you phone the IRS please post their explanation about this issue. I’m puzzled as to why they aren’t catching ALL of the MWP errors.

24 Korey May 18, 2010 at 2:36 pm

I looked over all the Schedule M discussion comments trying to see if anyone had a similar issue, but I’m not surprised it hasn’t come up.

My problem is this: we had other corrections to make to the return (including mis-entering one SS# digit) so we’ve already gotten something in the mail about correcting our return. I called with the correct #, addressed the other issues, and was assured that all the fixes were in and the “additional” refund would be coming (“additional” since they had decreased our refund). But there was nothing either on the paper notice OR in the phone call about Schedule M. Should I wait until the rest of the refund arrives before sending a 1040X? Call again? And if I sent the original at the end of February (paper) and got the notice in mid April, how long should I be waiting to see if they catch the Schedule M slip?

25 Linda May 25, 2010 at 9:27 pm

We received a check for $800 yestereday. We were not expecting a refund as we owed $$. We filed our return mid-April. The check came with a letter stating that they deterimed we were eligible for the credit.

26 Dave July 1, 2010 at 3:13 pm

My son works almost full-time while he lives at home and attends college. I claim him as my dependent. The IRS just sent him a $900 refund believing he was not a dependent and also deserved Sch M money. Should I call them or take the money and run?

27 Kris February 2, 2011 at 3:34 pm

Hey my ex-husband has claimed my daughter on his taxes this year. Well he is not suppose to he hasn’t even gotten her for visitation in almost 2 years now. Anyway I have been told several different things. You can’t get your credit for that dependent, it will take a long time getting your refund, and finally when you file with paper the IRS will allow a duplicate of that dependent and you will receive your refund and later they will fix the duplicate. Can anyone tell me which is true? Has anyone went through to the end to find out the actual results? The IRS told me that I would receive it and then they would fix it later and they also told me that it would take some time????

28 O February 14, 2011 at 11:44 pm

I qualified and took the making work pay credit, but only mailed the first page of the 1040EZ not the worksheet. Will the IRS process the 1040EZ or should I contact them and mail the worksheet?

29 Susan March 5, 2011 at 9:21 pm

I didn’t know about this last year – so didn’t do it – should I amend my return?

Also I quess I do it this year.

Is this only for high income earners or those who actually pay taxes?

I also qualify for the EIC – so maybe I don’t qualify for the Schedule M?

Can you get both?

I even took tax classes in college and can’t quite figure this schedule M out.

Thank you.

30 Kelly March 6, 2011 at 8:52 pm

Susan, the EIC isn’t tied to Schedule M. However, you need a certain amount of income to qualify (it’s not meant for high income earners at all). Run the numbers to see if you qualify. If you’re having trouble, ask the IRS for help. There are a lot of VITA centers that focus on EIC and they can help. Call 1-800-906-9887 to find a center near you.

31 Kevin March 7, 2011 at 11:12 am

I just realized that my wife and I missed this as well. I got my refund today and the $800 was nowhere to be found. Has anyone else had the IRS fix this for them this year, or at least been notified of the error?

32 Marianne March 16, 2011 at 1:22 pm

I too would like to know how to amend my mailed 1040A. I misread Schedule M and put myself down as $0.

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