Washington (Feb. 18, 2002) -- Errors related to a new line on the basic income tax forms may delay refunds by a week or more for taxpayers filing incorrect returns, the Internal Revenue Service said.
The IRS has already found more than 1 million returns with Rate Reduction Credit errors. This credit--for taxpayers who didn't get the maximum benefit through last summer's Advance Payments, and whose 2001 income or tax amounts qualify them for an additional amount--is on line 47 of Form 1040, line 30 of Form 1040A, and line 7 of Form 1040EZ.
The main errors taxpayers make on the Rate Reduction Credit line are:
- entering the Advance Payment amount, when the line should be blank because the taxpayer has already received the maximum benefit;
- entering a credit amount, when the line should be blank because the taxpayer is a dependent;
- leaving the line blank, when the taxpayer actually qualifies for the credit; or
- figuring the credit amount incorrectly.
Taxpayers who made an error related to this credit shouldn't file an amended return until after the IRS processes their original return.--Electronic Accountant Newswire staff
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