IRS rejected return IND-517-01

[DH007]

I know that this is referring to my first dependent in my list of dependents and I doubled checked my daughters SSN number on my return and her return (which I already submitted) and they are both correct. I also checked the box on her return claimed as a dependent by someone else.

1. Could this be because I filled out the Form 8615 on her tax return?

2. What else could be the issue?

3. If I mail in my return, do I have to remove her as a dependent?

[MonikaK1]

E-file reject IND-517-01 usually happens when you claim a dependent, but that person has filed a tax return and didn’t indicate that someone else can claim them as a dependent.

Less commonly, you can get reject code IND-517-01 if you entered your dependent's Social Security number incorrectly or if someone filed a return using your dependent's Social Security number. See this help article for more information. 

For 2023, Form 8615 needs to be filed if all of the following conditions apply:

• The child has more than $2,500 in unearned income
• The child is required to file a tax return
• The child does not file a joint tax return with a spouse
• At least one of the child's parents is alive
• The child is within certain age limits

For tax purposes, the child's "age" is the age on December 31. The child is required to file the form if any of these conditions apply:

• The child is under 18 at the end of the year
• The child is 18 years old and does not have earned income that is more than half of the child's support for the year, or
• The child is a full-time student aged 19-23 and does not have earned income that is more than half of the child's support

See this TurboTax tips article for more information. Filing Form 8615 doesn't disqualify someone as a dependent if they otherwise qualify.

It could be that someone else filed a return claiming her as a dependent.

If you need to mail in your return, but she qualifies as your dependent and you prepared her return correctly showing that she is a dependent, then you can still include her as a dependent on your return. The IRS will eventually send you and whoever else claimed her an audit notice and will determine who is entitled to claim the dependent.

See this tax tips article for the qualifications to claim a dependent.

[VolvoGirl]

Was your daughters return efiled and accepted?  I wonder if it could be for another dependent.  Did anyone else file their own return?

[DumbDadLTG]

Monica,

I have same error but know exactly why it happened. My son mistakenly did not check the box "someone else will claim you as dependent". He efiled 2 weeks ago. Through conversation with him early today I discovered his error. He amended and re-efiled about 1p today and amendment was accepted by IRS by 2p (but not state yet). I e-filed about 5p today. received subject rejection about 8p. I think it's just a timing thing, but would you have any input as to when his amended info would reflect in IRS system so that when I re-efile it's comparing his ss# on my return with his updated return info?

[DumbDadLTG]

@MonikaK1 

[PaulaM]

Amendments take a long time to process-around 16 weeks on average. You should have mailed your return in, as you won't be able to efile. File an extension, then either wait for your son's amendment to process during that time or print and mail your return. 

File federal extension online here. 

State extensions can be found here if needed

@DumbDadLTG 

[DumbDadLTG]

hello Paula,

Thanks for quick response. Just clarifying a couple things. I had no idea nmy return was getting rejected - until it did  late yesterday eve so to late to file return by mail......unfortunately all was good except for my son's misunderstanding, and thought we caught that in time.

Regardless, following with you as, at this point, just looking for your opinion of BEST suggested tactic - at this point.

My son's efile amendment was already "accepted" (whatever that means) by Fed (yesterday afternoon) and by state (this morning). I was thinking THAT "acceptance" could mean that the amended info was actually visible (vs what you note 16 weeks for "processing")...so I attempted efile again. got the rejection again within 1 hour.

So onto your suggestions. I think you are suggesting first choice would be to file the extension today (April 16, 1 day late....penalty?), pay today (fed only; i'm expecting refund on state), and then e-file again in 16 weeks (or thereabouts). I'm thinking in my case, that e-file is preferable as my return is a bit complicated (though TT says audit risk is very low), and I've had issues in past (when I had to mail) with IRS "misplacing" or taking months to find mailed in returns.  But would like your opinion on that. Will the e-file in several weeks still get likely quicker processing (and less scrutiny) that an "on-time" (relatively speaking) mailed in version? Is there anything I can do to avoid any "late" (1 day) extension filing penalty? Do I (or can I) add any "notes" explaining the late extension request.

Thank you in advance for your further review and comments

@PaulaM 

[VolvoGirl]

Sorry you won't be able to efile at all.  You have to mail your return so you don't have to wait for his amended return to finish processing.  Once a ssn has been efile and entered into the IRS you can't efile it again.