Federal Tax Amendment - when to file?

[marcuscato]

• I have filed my Federal Tax Return for 2020.
• IRS has accepted it and I am expecting a refund.
• However, IRS has not yet issued me a refund.

I need to file an amendment for a W2C. Should I be filing an amendment as soon as I get W2C or wait until IRS issues me refund from original filing?

I am told that even if TurboTax lets me amend the return, I still have to mail in the forms - is that true? Why won't IRS accept amendments electronically?

[xmasbaby0 · Accepted solution]

WAIT.   You do not want two tax returns in the system at the same time.  Wait until your first return has been fully processed before you send in an amended return.  An amended 2020 return can be e-filed or mailed.   However you send it, you can expect it to take about six months for the IRS to process it.

[marcuscato]

Thanks @xmasbaby0 How much time do I have to file an amendment? IRS is severely backlogged looks like and I might be waiting for months on the refund and I want to make sure there is no expiry date for amendment filing. Can I assume I have at least whole of 2021 to file amendment?

Also, is there a chance that IRS will see the W2C from the employer and automatically make the corrections for me (I don't mind that at all and probably is preferable)? Or is amendment the only way?

[xmasbaby0]

You have three years from the filing deadline for your tax year to send an amended return.    You have not said what the employer changed on your W-2 so no predictions as to whether the IRS will catch it or not-----yet another reason to wait for them to process the first return.  

[marcuscato]

@xmasbaby0 Thanks. Answering your question about W2C contents: The W2C is still in approval stage of payroll and will be mailed to be in 4-6 weeks. I am not 100% what it will look like but it was because of a sign-on bonus repayment (net) this year for the bonus received in 2020. Verbally the payroll manager said that all boxes would be updated in the W2 (both Wages and Withholdings would drop). She alluded that by filing the amendment I will probably get a slightly bigger refund (Federal, State, City), or there will be no change. I am not very clear what ends up happening to Social Security and Medicare. I can only be 100% sure when I see the W2C (payroll of my company tends to be unreliable).

If IRS self-corrects the return, would they "penalize" me (especially if the refund is reduced because of W2C amendment) for not having the W2C in there - it is being issued to me after I filed the tax and I had no idea it was coming. I assume not?

[xmasbaby0]

No you should not be penalized because your employer issues a corrected W2 to you.   You have two reasons to sit tight for now.    You do not even have the corrected W-2 yet, and you need to wait for the IRS to process your original return.   If the employer has not yet sent the W-2C to the IRS then the IRS does not know about it yet.

[marcuscato]

Thanks @xmasbaby0  so much for the detailed answers. I had a question about state refund. Even though I am waiting on my Federal Return, I got my NY state refund few weeks ago. When I was staring at my NY state returns today, I discovered a potential mistake. Long story short, I left New York City and moved up to north NY in 2020 and was supposed to pay ~9 months of NYC taxes but when I looked at the numbers Turbo Tax has filled in the IT Form 360.1 Part 1 Line 1 Column A and Column B, they seemed off. Column B is lower than I expected. As a result, perhaps, I should have gotten a lower NY state refund (by approximately $1600), an honest arithmetic/TT mistake that NY State Revenue Service could have only detected if they had access to my individual paystubs rather than just the W2. (See https://ttlc.intuit.com/community/taxes/discussion/new-york-[product key removed]-for-part-year-resi...)

Given the pending W2C, should I wait for the Federal Refund to come to file an amendment with NY State as well or do a separate process for NY state first? The W2C may change the state numbers too, so I am thinking I should wait for the Federal Refund. Does an amendment let me alter both Federal and State Taxes in one go. Also, in addition to the W2C changes, am I allowed to change the NY State IT 360.1 form manually?

[marcuscato]

@xmasbaby0 If the W2C results in reduction of my claimed refund (or worse, it has me paying IRS instead of getting refund), if I wait to file the amendment would IRS be charging me interest?

[Critter-3]

NO ... if you have a balance due on the amended return you will simply pay it with the filing of the 1040X ... penalties/interest is only charged if you fail to send in the payment when you file the 1040X ... stop worrying.