Ask The Taxgirl: Should Those Affected By AMT Patch File Now Or Later?

Taxpayer asks:

Hi Taxgirl,

I’m helping a non-profit run its VITA program this year. I just found out today that due to late passage of the AMT patch, taxpayers trying to claim ed credits won’t be able to file until the Service fixes its computers. The target date for that is Feb. 11. Do you know of the Service’s history for keeping its target dates? Do you think they’ll have the computers fixed by Feb 11, or is it just wishful thinking?

Also, how do we explain this to taxpayers? Most don’t know what the AMT is; we need to keep it simple. Finally, do you think our sites should just file the 1040 without the ed credit and then do a 1040-x? Our clients aren’t going to owe taxes, we simply do the ed credit to maximize the EIC.

Thanks for any information!

Taxgirl says:

The Service has indicated that they’ll be ready before the 2/11 deadline. They knew the patch was coming, they just didn’t know the specifics, so some of the computer work was already done. Fingers crossed, but I don’t think it will be that bad.

As to the taxpayers, I used to manage one of the VITA sites. Whenever something didn’t work for a taxpayer, we asked them to reschedule at the site. I would recommend a similar course of action for affected taxpayers. I think a 1040-X is ambitious for two reasons: 1, the taxpayer may not come back to amend the return and 2, it could be confusing or intimidating to the taxpayer. Many taxpayers believe that an amended return increases their chance of audit. I would just recommend that affected taxpayers make arrangements to come back after 2/11 – especially if you’re using IRS software (which most VITA sites do).

I hope that helps, thanks for reading!

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Kelly Phillips Erb

Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.

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