Ready to File 2021 but 2020 Amendment due to additional Self Employment Income and Form 7202 is Still Processing - What should I do?

[james1305]

I need an expert to weigh in on this one... Calling the IRS wasn't helpful. 

For 2020 taxes, does anyone remember the Form 7202 debacle where this form couldn't originally be e-filed? I had a large refund so I decided to file without the form 7202 Self-Employed Covid-19 Credit for sick leave and family leave and then do an amendment later. I also added about $400 in Self Employment income that I left off of the original 2020 1040 in the Amendment. The amended return is still in processing (as of 2/5/2022), since its acceptance on May 9th, 2021, with no ETA in sight. I am due apx. $800 from this amendment. (The amendment also stopped me from getting any advance child tax credit in 2021 and with 6 kids, (Including a new baby who was born in 2021) I am due a large refund for 2021!)

I am now ready to file for 2021... except this year the Form 7202 (updated for tax year 2021) is giving the option to use 2021 SE numbers (which are half of what I did the year before) or the availability of a 2020 lookback, which is what I would *like* to use for this credit. My question is, how should I answer the following 3 interview questions:

1. Did you file for Self Employed Sick Leave in 2020?   [I did not in the original accepted 1040, but I did in my 2020 Amendment which is still in Limbo.... what should I say here?]  *Note* I am only claiming 7202 parts 3 and 4 - for dates April 1st- Sept 30th so either way I answer, the new days won't impact or overlap from 2020 days claimed in the 2020 amendment w/ 7202.

2. Do you want to use your 2020 Net Income from Self-Employment for the sick leave credit? [Yes, I do...]

3. Enter Line 4a from Schedule SE Long Form..... ??????

[Should I use the original accepted 2020 Line 4a from Schedule SE, or the pending Amended amount that hasn't been processed yet?]

Will putting in either the original 1040 amount or the pending amended amount from the year 2020 form 7202 risk long delays or a rejection of my 2021 taxes and recovery rebate credit and full child tax credit?   

Looking for any guidance please...

[JillS56]

In answer to your question Will putting in either the original 1040 amount or the pending amended amount from the year 2020 form 7202 risk long delays or a rejection of my 2021 taxes and recovery rebate credit and full child tax credit?   

In my opinion using the amended 2020 numbers is correct.   If your 2020 amendment is not processed, could this risk long delays or rejection of your 2021 taxes, possibly.  Your return would not be rejected but you may receive correspondence for the IRS with questions.   If you received a letter you could simply respond by saying that you amended your 2020 that has not be processed yet.

Unless your return or the changes in the amended return would put you over the threshold for the recovery rebate credit.   I

The child tax credit should hold up your child tax credit.

 I cannot really give you advice on this matter.   You probably will not like my recommendation, but I would hold off filing for a little bit yet.   The more time you can give for your 2020 amendment to be processed the better off you would be.  

[james1305]

Thank you very much! At this point, I am going to take your advice and wait to file, however, I'm worried that my 2020 Amendment processing will be delayed for months ...(years??) it's already been 11 months. Thanks again for your help.

Do you think that filing a 2021 extension would in any way get someone to take a look at the 2020 Amendment faster, or have no effect, or possibly make things worse? 

[JillS56]

No.  Filing the extension will not get someone to look at the 2020 amendment.   The IRS would not make such a connection.  The filing of the extension would have no effect on the processing of your 2020 amended return.   Filing an extension will not make it worse.   

The IRS will not know why you are extending the filing of your 2021 return.   If your 2020 amendment has not been processed by April 18, 2022, filing an extension would be an option for more time to get your 2020 amendment processed.    I would think that the 2020 amendment would be processed by October 15, 2022.